BILL NUMBER: AB 2219 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Knight
(Coauthor: Assembly Member Jeffries)
FEBRUARY 24, 2012
An act to amend and repeal Section 7125 of the Business and
Professions Code, and to amend Section 11665 of the Insurance Code,
relating to contractors.
LEGISLATIVE COUNSEL'S DIGEST
AB 2219, as introduced, Knight. Contractors' workers' compensation
insurance coverage.
(1) Existing law, the Contractors' State License Law, provides for
the licensing and regulation of contractors by the Contractors'
State License Board within the Department of Consumer Affairs.
Existing law requires every licensed contractor to have on file at
all times with the board a current and valid Certificate of Workers'
Compensation Insurance or Certification of Self-Insurance, or a
statement certifying that he or she has no employees and is not
required to obtain or maintain workers' compensation insurance.
Existing law, until January 1, 2013, requires a contractor with a
C-39 roofing classification to obtain and maintain workers'
compensation insurance even if he or she has no employees.
This bill would extend the operation of these provisions
indefinitely.
Under existing law, for any license that, on January 1, 2011, is
active and includes a C-39 classification but for which a valid
Certificate of Workers' Compensation or Certification of
Self-Insurance has not been received by the registrar of contractors,
the registrar is required, in lieu of suspending the license, to
remove the C-39 classification from the license.
This bill would change this date to January 1, 2013, and would
extend the operation of these provisions indefinitely.
Existing law requires the suspension of any license that, after
January 1, 2011, is active and has had the C-39 classification
removed pursuant to the above-described provisions, if the licensee
is found by the registrar to have employees and to lack a valid
Certificate of Workers' Compensation or Certification of
Self-Insurance.
This bill would change this date to January 1, 2013, and would
extend the operation of these provisions indefinitely.
(2) Existing law requires an insurer who issues a workers'
compensation insurance policy to a roofing contractor holding a C-39
license from the Contractor's State License Board to perform an
annual payroll audit for the contractor. Existing law provides that
these provisions are inoperative and repealed on January 1, 2013.
This bill would extend the operation of these provisions
indefinitely. The bill would require that the audit conducted
pursuant to these provisions contain separate data based on the
classification of roofing contractors by the Workers' Compensation
Insurance Rating Bureau, broken down by reported annual payroll
ranges, and would require that the audit include an in-person visit
to the place of business of the roofing contractor to verify whether
the number of employees reported by the contractor is accurate.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7125 of the Business and Professions Code, as
amended by Section 1 of Chapter 686 of the Statutes of 2011, is
amended to read:
7125. (a) Except as provided in subdivision (b), the board shall
require as a condition precedent to the issuance, reinstatement,
reactivation, renewal, or continued maintenance of a license, that
the applicant or licensee have on file at all times a current and
valid Certificate of Workers' Compensation Insurance or Certification
of Self-Insurance. A Certificate of Workers' Compensation Insurance
shall be issued and filed, electronically or otherwise, by one or
more insurers duly licensed to write workers' compensation insurance
in this state. A Certification of Self-Insurance shall be issued and
filed by the Director of Industrial Relations. If reciprocity
conditions exist, as defined provided
in Section 3600.5 of the Labor Code, the registrar shall require the
information deemed necessary to ensure compliance with this section.
(b) This section does not apply to an applicant or licensee who
meets both of the following conditions:
(1) Has no employees provided that he or she files a statement
with the board on a form prescribed by the registrar prior to the
issuance, reinstatement, reactivation, or continued maintenance of a
license, certifying that he or she does not employ any person in any
manner so as to become subject to the workers' compensation laws of
California or is not otherwise required to provide for workers'
compensation insurance coverage under California law.
(2) Does not hold a C-39 license, as defined in Section 832.39 of
Title 16 of the California Code of Regulations.
(c) No Certificate of Workers' Compensation Insurance,
Certification of Self-Insurance, or exemption certificate is required
of a holder of a license that has been inactivated on the official
records of the board during the period the license is inactive.
(d) (1) The insurer, including the State Compensation Insurance
Fund, shall report to the registrar the following information for any
policy required under this section: name, license number, policy
number, dates that coverage is scheduled to commence and lapse, and
cancellation date if applicable.
(2) A workers' compensation insurer shall also report to the
registrar a licensee whose workers' compensation insurance policy is
canceled by the insurer if all of the following conditions are met:
(A) The insurer has completed a premium audit or investigation.
(B) A material misrepresentation has been made by the insured that
results in financial harm to the insurer.
(C) No reimbursement has been paid by the insured to the insurer.
(3) Willful or deliberate disregard and violation of workers'
compensation insurance laws constitutes a cause for disciplinary
action by the registrar against the licensee.
(e) (1) For any license that, on January 1, 2011
2013 , is active and includes a C-39
classification in addition to any other classification, the registrar
shall, in lieu of the automatic license suspension otherwise
required under this article, remove the C-39 classification from the
license unless a valid Certificate of Workers' Compensation Insurance
or Certification of Self-Insurance is received by the registrar.
(2) For any licensee whose license, after January 1, 2011
2013 , is active and has had the C-39
classification removed as provided in paragraph (1), and who is found
by the registrar to have employees and to lack a valid Certificate
of Workers' Compensation Insurance or Certification of
Self-Insurance, that license shall be automatically suspended as
required under this article.
(f) The information reported pursuant to paragraph (2) of
subdivision (d) shall be confidential, and shall be exempt from
disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
(g) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 2. Section 7125 of the Business and Professions Code, as
amended by Section 2 of Chapter 686 of the Statutes of 2011, is
repealed.
7125. (a) The board shall require as a condition precedent to the
issuance, reinstatement, reactivation, renewal, or continued
maintenance of a license, that the applicant or licensee have on file
at all times a current and valid Certificate of Workers'
Compensation Insurance or Certification of Self-Insurance. A
Certificate of Workers' Compensation Insurance shall be issued and
filed, electronically or otherwise, by one or more insurers duly
licensed to write workers' compensation insurance in this state. A
Certification of Self-Insurance shall be issued and filed by the
Director of Industrial Relations. If reciprocity conditions exist, as
defined in Section 3600.5 of the Labor Code, the registrar shall
require the information deemed necessary to ensure compliance with
this section.
(b) This section does not apply to an applicant or licensee who
has no employees provided that he or she files a statement with the
board on a form prescribed by the registrar prior to the issuance,
reinstatement, reactivation, or continued maintenance of a license,
certifying that he or she does not employ any person in any manner so
as to become subject to the workers' compensation laws of California
or is not otherwise required to provide for workers' compensation
insurance coverage under California law.
(c) No Certificate of Workers' Compensation Insurance,
Certification of Self-Insurance, or exemption certificate is required
of a holder of a license that has been inactivated on the official
records of the board during the period the license is inactive.
(d) (1) The insurer, including the State Compensation Insurance
Fund, shall report to the registrar the following information for any
policy required under this section: name, license number, policy
number, dates that coverage is scheduled to commence and lapse, and
cancellation date, if applicable.
(2) A workers' compensation insurer shall also report to the
registrar a licensee whose workers' compensation insurance policy is
canceled by the insurer if all of the following conditions are met:
(A) The insurer has completed a premium audit or investigation.
(B) A material misrepresentation has been made by the insured that
results in financial harm to the insurer.
(C) No reimbursement has been paid by the insured to the insurer.
(3) Willful or deliberate disregard and violation of workers'
compensation insurance laws constitutes a cause for disciplinary
action by the registrar against the licensee.
(e) The information reported pursuant to paragraph (2) of
subdivision (d) shall be confidential, and shall be exempt from
disclosure under the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
(f) This section shall become operative on January 1, 2013.
SEC. 3. Section 11665 of the Insurance Code is amended to read:
11665. (a) An insurer who issues a workers' compensation
insurance policy to a roofing contractor holding a C-39 license from
the Contractors State License Board shall perform an annual payroll
audit for the contractor. This audit shall include an in-person
visit to the place of business of the roofing contractor to verify
whether the number of employees reported by the contractor is
accurate. The insurer may impose a surcharge on each
policyholder audited under this subdivision in an amount necessary to
recoup the reasonable costs of conducting the annual payroll audits.
(b) The commissioner shall direct the rating organization
designated as his or her statistical agent to compile pertinent
statistical data on those holding C-39 licenses, as reported by the
appropriate state entity, on an annual basis and provide a report to
him or her each year. The data shall track the total annual payroll
and loss data reported on those holding C-39 licenses , with
separate data for roofing classes 5551 and 5552, in accordance
with the standard workers' compensation insurance
classifications applicable to roofing operations. The data for
each roofing class shall include premium and losses by the employers'
annual payroll intervals as follows:
1 to 4,999
5,000 to 9,999
10,000 to 14,999
15,000 to 19,999
20,000 to 24,999
25,000 to 29,999
30,000 to 39,999
40,000 to 49,999
50,000 to 74,999
75,000 to 99,999
100,000 to 199,999
200,000 to 299,999
300,000 to 399,999
400,000 to 499,999
500,000 to 599,999
600,000 to 699,999
700,000 to 799,999
800,000 to 899,999
900,000 to 999,999
1,000,000 to 1,099,999
1,100,000 to 1,199,999
1,200,000 to 1,299,999
1,300,000 to 1,399,999
1,400,000 to 1,499,999
1,500,000 or more
The report shall also be provided to the Legislature, in compliance
with Section 9795 of the Government Code. Reports required under this
section for the 2008 and 2009 calendar years shall be filed by March
1, 2012.
(c) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.