BILL ANALYSIS Ó SB 561 Page 1 Date of Hearing: July 8, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 561 (Monning) - As Amended June 17, 2015 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|14 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill eliminates the requirement that a home improvement salesperson (HIS) register separately with the Contractors State License Board (CSLB) for each home improvement contractor he or SB 561 Page 2 she works for, and instead allows an HIS to utilize a single registration with one or more licensed contractors. The bill also authorizes the CSLB to adopt regulations providing for the electronic transmission of initial and renewal applications for HIS registration and for a contractor license, including the acceptance of a digital or electronic signature. FISCAL EFFECT: 1)One-time CSLB programming and IT costs in the range of $110,000 to $130,000 in 2015-16 to provide for the changes to HIS registration and contractor notification requirements. (Contractors License Fund) 2)Minor and absorbable costs to CSLB in 2016-17 to adopt regulations. COMMENTS: 1)Purpose. According to the author, "[This bill] streamlines the HIS registration process and provides a registration system that makes it easier for an HIS to work for multiple contractors while continuing to be in good standing with the CSLB." This bill is sponsored by the CSLB. 2)Background. The Contractors State License Law provides for the licensure and regulation of more than 300,000 contractors. A "home improvement salesperson" is defined as a person employed by a home improvement contractor licensed under the Contractors Law to solicit, sell, negotiate, or execute SB 561 Page 3 contracts for home improvements, for the sale, installation or furnishing of home improvement goods or services, or of swimming pools, spas, or hot tubs. It is a misdemeanor for any person to engage in the occupation of salesperson for one or more home improvement contractors within this state without having a CSLB registration for each of the home improvement contractors by whom he or she is employed. A home improvement contractor who employs a person to sell home improvement contracts while that person is not registered with CSLB is subject to disciplinary action. Existing law authorizes a HIS registration to be renewed at any rime within three years after its expiration, if the applicant pays the renewal fee and a $25 delinquent renewal penalty. According to CSLB, there are currently approximately 12,600 active HIS registrants, nearly 5,700 expired registrants, and over 85,000 invalid registrants. In the 2013-14 fiscal year, CSLB received approximately 800 HIS applications a month, a 40% increase over the previous three years. This significant increase has led to a backlog of applications and processing delays. This bill would streamline the current registration process and provide increased flexibility for HIS registrants. 3)Prior Related Legislation. a) AB 2457 (Nakanishi), Chapter 106, Statutes of 2006, exempted from HIS registration a general partner of a licensee and makes the exemption, as it applies to such a general partner or a corporate officer or qualifying person, applicable only in specified circumstances. SB 561 Page 4 b) SB 364 (Figueroa), Chapter 789, Statutes of 2003, delayed until July 1, 2004, the requirement that an applicant for registration as a HIS furnish a full set of fingerprints to the CSLB. c) SB 1953 (Figueroa), Chapter 744, Statutes of 2002, required all applicants for a HIS license to submit a set of fingerprints to the CSLB with his or her application and requires the CSLB to obtain and receive criminal history information from the Department of Justice and the Federal Bureau of Investigation for a criminal history records check. d) AB 2544 (Bill Campbell), Chapter 372, Statutes of 2002, required the CSLB to post specified information on its website each week regarding HIS registration applications. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081 SB 561 Page 5