BILL NUMBER: SB 1337 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Correa
FEBRUARY 20, 2008
An act to amend Sections 7025, 7028.5, 7029, 7065, 7065.1, 7065.5,
7068, 7068.1, 7068.2, 7069, 7071, 7071.8, 7071.9, 7071.10, 7071.11,
7071.17, 7072.5, 7075.1, 7076, 7076.2, 7085.6, 7090.1, 7096, 7121,
7121.1, 7121.5, 7121.6, 7122, 7122.1, 7122.2, 7122.5, 7137, 7138, and
7152 of, and to add Section 7026.4 to, the Business and Professions
Code, and to amend Section 17002 of the Corporations Code, relating
to contractors, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1337, as introduced, Correa. Contractors: limited liability
companies.
Existing law, the Beverly-Killea Limited Liability Company Act,
authorizes a limited liability company to engage in any lawful
business activity, except as specified, but prohibits construing the
act to permit a limited liability company to render professional
services, as defined.
Existing law, the Contractors' State License Law, provides for the
licensure and regulation of contractors by the Contractors' State
License Board. Existing law authorizes the issuance of contractors
licenses to individual owners, copartnerships, and corporations and
authorizes those persons and entities to qualify for a license by the
appearance of specified individuals. Existing law authorizes the
board to set application, licensure, and renewal fees, among others,
and provides for the deposit of those fees in the Contractors'
License Fund, a continuously appropriated fund. Existing law
prohibits licensed contractors from performing specified acts and
makes a violation of certain of those provisions a crime.
This bill would authorize a limited liability company to render
occupational, nonprofessional services lawfully rendered only
pursuant to a specified license, certificate, or registration if the
provisions governing that license, certificate, or registration
identify those services as occupational, nonprofessional services and
authorize a limited liability company to hold that license,
certificate, or registration. The bill would specify that the
services a licensed contractor is authorized to perform are
occupational, nonprofessional services and would authorize the
issuance of contractors licenses to limited liability companies. The
bill would authorize the responsible managing manager, responsible
managing officer, or responsible managing employee of the limited
liability company to qualify for the license. The bill would also
enact related, conforming provisions. Because the bill would impose
various fees on limited liability companies that apply for and obtain
a contractors license, the bill would increase the amount of revenue
deposited in the Contractors' License Fund, thereby making an
appropriation. In addition, because a violation of specified
provisions of the Contractors State License Law by a limited
liability company licensed pursuant to these provisions would be a
crime, the bill would impose a state-mandated local program.
Existing law makes various provisions of the Contractors' State
License Law applicable to the member, officer, or director, among
others, of a licensed contractor.
This bill would delete the term "member" from those provisions
and, in specified instances, insert the term "partner."
Under existing law, at the time of application for renewal of a
license, the responsible managing individual of a licensee must file
a statement with the registrar verifying his or her capacity as a
responsible managing individual to the licensee.
This bill would make that requirement applicable to the qualifying
individual for a licensee.
Existing law allows a contractor's license number to be reissued
or reassigned to a corporation in specified instances.
This bill would allow a contractor's license number to be reissued
or reassigned to a corporation or limited liability company that
acquires a licensee pursuant to an asset sale if the corporation or
limited liability company has a qualifier, as specified.
Existing law also allows a contractor's license number to be
reissued or reassigned to an immediate family member of a licensed
individual who is deceased or absent if the license is required to
continue an existing family contracting business or to a corporation
created by immediate family members of a licensed individual to
continue an existing deceased or absent individual licensee's
contracting business. Existing law defines an immediate family member
to include a spouse, brother, sister, son, daughter, grandson, or
granddaughter, among others.
This bill would specify that an immediately family member includes
a father, mother, grandfather, and grandmother.
The bill would make other technical, nonsubstantive changes.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7025 of the Business and Professions Code is
amended to read:
7025. (a) "Person" as used in this chapter
includes an individual, a firm, copartnership, corporation,
limited liability company, association or other organization,
or any combination of any thereof.
(b) "Qualifying person," "qualifying individual," or "qualifier,"
as used in this chapter, means a person who qualifies for a license
pursuant to Section 7068.
SEC. 2. Section 7026.4 is added to the Business and Professions
Code, to read:
7026.4. For purposes of Section 17002 of the Corporations Code,
the services that a contractor licensed pursuant to this chapter is
authorized to perform are occupational, nonprofessional services.
SEC. 3. Section 7028.5 of the Business and Professions Code is
amended to read:
7028.5. It is unlawful for any a
person who is or has been a member, partner,
officer, director , manager, responsible managing
employee, responsible managing manager, or responsible managing
officer of a licensed copartnership, corporation, limited
liability company, firm, association or other
organization to individually engage in the business or individually
act in the capacity of a contractor within this State
state without having a license in good standing
to so engage or act.
SEC. 4. Section 7029 of the Business and Professions Code is
amended to read:
7029. A joint venture license is a license issued to any
combination of individuals, corporations, limited liability
companies, partnerships, or other joint ventures, each of which
holds a current, active license in good standing. A joint venture
license may be issued in any classification in which at least one of
the entities is licensed. An active joint venture license shall be
automatically suspended by operation of law during any period in
which any member of the entity does not hold a current, active
license in good standing.
SEC. 5. Section 7065 of the Business and Professions Code is
amended to read:
7065. Under rules and regulations adopted by the board and
approved by the director, the registrar shall investigate, classify,
and qualify applicants for contractors' licenses by written
examination. This examination shall include questions designed to
show that the applicant has the necessary degree of knowledge
required by Section 7068 and shall include pertinent questions
relating to the laws of this state, and the contracting business and
trade. Contractors' licenses are to be issued to individual owners,
copartnerships, and corporations , and limited
liability companies . An individual owner may qualify by
examination for a contractor's license upon the appearance of the
owner or a qualifying individual appearing as a responsible managing
employee on behalf of the owner. A copartnership may qualify by
examination for a contractor's license upon the appearance of a
copartner or a qualifying individual appearing as a responsible
managing employee on behalf of the copartnership . A
corporation may qualify by examination for a contractor's license
upon the appearance of a qualifying individual appearing either as a
responsible managing officer or a responsible managing employee
on behalf of the corporation . A limited liability company
may qualify by examination for a contractor's license upon the
appearance of a qualifying individual appearing as a
responsible managing officer, a responsible managing manager, or a
responsible managing employee on behalf of the company .
No examination shall be required of a qualifying individual if,
within the five-year period immediately preceding the application
for licensure, the qualifying individual has either personally passed
the written examination for the same classification being applied
for, or has served as the qualifying individual for a licensee whose
license was in good standing at any time during the five-year period
immediately preceding the application for licensure and in the same
classification being applied for.
SEC. 6. Section 7065.1 of the Business and Professions Code is
amended to read:
7065.1. Notwithstanding Section 7065, the registrar may waive the
examination for a contractor's license under any of the following
circumstances:
(a) The qualifying individual has, for five of the seven years
immediately preceding the application for licensure, been listed on
the official records of the board as a member of the personnel of any
licensee who held a license, which was active and in good standing,
in the same classification being applied for, and who during the
period listed on the license has been actively engaged in a licensee'
s construction activities in the same classification within which the
applicant applies for a license.
(b) The qualifying individual is an immediate member of the family
of a licensee whose individual license was active and in good
standing for five of the seven years immediately preceding the
application for licensure, and the qualifying individual is able to
show all of the following:
(1) The qualifying individual has been actively engaged in the
licensee's business for five of the seven years immediately preceding
the application for licensure.
(2) The license is required to continue the existing family
business in the event of the absence or death of the licensee.
(3) An application is made for a new license in the same
classifications in which the licensee is or was licensed.
(c) The qualifying individual is an employee of a corporation
or a limited liability company seeking to replace its former
qualifying individual and has been employed by that corporation
or limited liability company under the following conditions:
(1) For five of the seven years immediately preceding the
application for licensure, the qualifying individual has been
continually employed by the corporation or limited liability
company in a supervisory capacity in the same classifications
being applied for.
(2) For five of the seven years immediately preceding the
application for licensure, the corporation or limited
liability company has held an active license in good standing
in the same classifications being applied for.
The corporation or limited liability company has not
requested a waiver under this subdivision within the past five years.
For purposes of this section, employees of a corporation or
limited liability company shall include, but not be limited to,
the officers of a corporation and the officers and managers of
a limited liability company .
SEC. 7. Section 7065.5 of the Business and Professions Code is
amended to read:
7065.5. No license shall be issued to a minor, nor to any
copartnership a member partner of which
is a minor, nor to any corporation any officer, director or
responsible managing employee of which is a minor, nor to any
limited liability company any officer, manager, or responsible
managing employee of which is a minor, nor to any other kind of
business organization in which a minor holds a responsible official
position, unless such the minor shall
first have had a guardian appointed by a court of competent
jurisdiction.
SEC. 8. Section 7068 of the Business and Professions Code is
amended to read:
7068. (a) The board shall require an applicant to show
such the degree of knowledge and experience in
the classification applied for, and such the
general knowledge of the building, safety, health, and lien
laws of the state and of the administrative principles of the
contracting business as that the board
deems necessary for the safety and protection of the public.
(b) An applicant shall qualify in regard to his or her experience
and knowledge in one of the following ways:
(1) If an individual, he or she shall qualify by personal
appearance or by the appearance of his or her responsible managing
employee who is qualified for the same license classification as the
classification being applied for.
(2) If a copartnership or a limited partnership, it shall qualify
by the appearance of a general partner or by the appearance of a
responsible managing employee who is qualified for the same license
classification as the classification being applied for.
(3) If a corporation, or any other combination or organization, it
shall qualify by the appearance of a responsible managing officer or
responsible managing employee who is qualified for the same license
classification as the classification being applied for.
(4) If a limited liability company, it shall qualify by the
appearance of a responsible managing officer, a responsible managing
manager, or a responsible managing employee who is qualified for the
same license classification as the classification being applied for.
(c) A responsible managing employee for the purpose of this
chapter shall mean an individual who is a bona fide employee of the
applicant and is actively engaged in the classification of work for
which that responsible managing employee is the qualifying person in
behalf of the applicant.
(d) The board shall, in addition, require an applicant who
qualifies by means of a responsible managing employee under either
paragraph (1) or (2) of subdivision (b) to show his or her general
knowledge of the building, safety, health, and lien laws of the state
and of the administrative principles of the contracting business as
the board deems necessary for the safety and protection of the
public.
(e) Except in accordance with Section 7068.1, no person qualifying
on behalf of an individual or firm under paragraph (1), (2),
or (3) , or (4) of subdivision (b)
shall hold any other active contractor's license while acting in the
capacity of a qualifying individual pursuant to this section.
(f) At the time of application for renewal of a license, the
responsible managing current qualifying
individual shall file a statement with the registrar, on a form
prescribed by the registrar, verifying his or her capacity as a
responsible managing qualifying
individual to the licensee.
(g) Statements made by or on behalf of an applicant as to the
applicant's experience in the classification applied for shall be
verified by a qualified and responsible person. In addition, the
registrar shall, as specified by board regulation, randomly review a
percentage of such statements for their veracity.
(h) The registrar shall review experience gained by applicants
from other states to determine whether all of that experience was
gained in a lawful manner in that state.
SEC. 9. Section 7068.1 of the Business and Professions Code is
amended to read:
7068.1. The person qualifying on behalf of an individual or firm
under paragraph (1), (2), or (3) , or (4)
of subdivision (b) of Section 7068 shall be responsible for
exercising that direct supervision and control of his or her employer'
s or principal's construction operations as is necessary to secure
full compliance with the provisions of this chapter and the rules and
regulations of the board relating to the construction operations.
This person shall not act in the capacity of the qualifying person
for an additional individual or firm unless one of the following
conditions exists:
(a) There is a common ownership of at least 20 percent of the
equity of each individual or firm for which the person acts in a
qualifying capacity.
(b) The additional firm is a subsidiary of or a joint venture with
the first. "Subsidiary," as used in this subdivision, means any firm
at least 20 percent of the equity of which is owned by the other
firm.
(c) With respect to a firm under paragraph (2) or
, (3) , or (4) of subdivision (b) of
Section 7068, the majority of the partners or
, officers , or managers are the same.
(d) Notwithstanding subdivisions (a), (b), and (c), a qualifying
individual may act as the qualifier for no more than three firms in
any one-year period.
"Firm," as used in this section, means a copartnership, a limited
partnership, a corporation, a limited liability company,
or any other combination or organization described in Section 7068.
"Person," as used in this section, is limited to persons
natural persons , notwithstanding the definition
of "person" in Section 7025.
The board shall require every applicant or licensee qualifying by
the appearance of a qualifying individual to submit detailed
information on the qualifying individual's duties and
responsibilities for supervision and control of the applicant's
construction operations.
SEC. 10. Section 7068.2 of the Business and Professions Code is
amended to read:
7068.2. If the responsible managing officer or
, responsible managing employee , or responsible
managing manager disassociates from the licensed entity, the
licensee, or the qualifier shall notify the registrar in writing, and
the licensee shall replace the qualifier, within 90 days from the
date of disassociation.
To replace a responsible managing officer or
, responsible managing employee , or responsible
managing manager , the licensee shall file an application as
prescribed by the registrar, accompanied by the fee fixed by this
chapter, designating an individual to qualify as required by this
chapter.
Upon failure to replace the qualifier within 90 days of the
disassociation the license shall be automatically suspended or the
classification removed at the end of the 90 days.
The registrar may review and accept the petition of a licensee who
disputes the date of disassociation or who has failed to notify and
replace the qualifier within the prescribed time, upon a showing of
good cause by the contractor. This petition shall be received within
90 days from the date of the board's notice that the license will be
suspended if the qualifier is not replaced. The registrar may grant
only one 90-day extension to replace the qualifier.
Upon failure of the licensee or the qualifier to notify the
registrar of the disassociation within 90 days from the date of
disassociation, the license shall be automatically suspended or the
classification removed and the qualifier removed from the license
effective the date the written notification is received at the board'
s headquarters office.
The person qualifying on behalf of an individual or firm
under subdivision (a), (b), or (c) of a licensee under
Section 7068 shall be responsible for the licensee's
construction operations until the board receives the written
notification of disassociation.
Failure of the licensee or the qualifier to notify the registrar
of the qualifier's disassociation within 90 days of the
disassociation is grounds for disciplinary action.
SEC. 11. Section 7069 of the Business and Professions Code is
amended to read:
7069. (a) An applicant, and each officer, director, partner,
manager, associate, and responsible managing employee thereof,
shall not have committed acts or crimes that are grounds for denial
of licensure under Section 480.
(b) As part of an application for a contractor's license, the
board shall require an applicant to furnish a full set of
fingerprints for purposes of conducting a criminal history record
check. Fingerprints furnished pursuant to this subdivision shall be
submitted in an electronic format if readily available. Requests for
alternative methods of furnishing fingerprints are subject to the
approval of the registrar. The board shall use the fingerprints
furnished by an applicant to obtain criminal history information on
the applicant from the Department of Justice and the United States
Federal Bureau of Investigation, and the board may obtain any
subsequent arrest information that is available.
SEC. 12. Section 7071 of the Business and Professions Code is
amended to read:
7071. No license shall be issued to a corporation, copartnership,
limited liability company, or other combination or
organization if any a responsible
officer or director of such the
corporation, or other combination or organization, or any
member partner of such
the copartnership , or a manager or officer of the limited
liability company does not meet the qualifications required of
an applicant other than those qualifications relating to knowledge
and experience.
SEC. 13. Section 7071.8 of the Business and Professions Code is
amended to read:
7071.8. (a) This section applies to an application for a license,
for renewal or restoration of a license, an application to change
officers of a corporation or a limited liability company ,
or for continued valid use of a license which has been disciplined,
whether or not the disciplinary action has been stayed, made by any
of the following persons or firms:
(1) Any A person whose license has
been suspended or revoked as a result of disciplinary action, or
any a person who was a qualifying
individual for a licensee at any time during which cause for
disciplinary action occurred resulting in suspension or revocation of
the licensee's license, whether or not the qualifying individual had
knowledge or participated in the prohibited act or omission.
(2) Any A person who was an officer,
director, member, manager, or partner
of a licensee at any time during which cause for disciplinary action
occurred resulting in suspension or revocation of the licensee's
license and who had knowledge of or participated in the act or
omission which was the cause for the disciplinary action.
(3) Any A partnership, corporation,
limited liability company, firm, or association of which
any an existing or new officer,
director, member, manager, partner, or
qualifying person has had a license suspended or revoked as a result
of disciplinary action.
(4) Any A partnership, corporation,
limited liability company, firm, or association of which
any an officer, director,
member, manager, partner, or qualifying person
was a member, manager, officer,
director, or partner of a licensee at any time during which cause for
disciplinary action occurred resulting in suspension or revocation
of the license, and who had knowledge of or participated in the act
or omission which was the cause for the disciplinary action.
(b) The board shall require as a condition precedent to the
issuance, reissuance, renewal, or restoration of a license to the
applicant, or to the approval of an application to change officers of
a corporation or a limited liability company , or removal
of suspension, or to the continued valid use of a license which has
been suspended or revoked, but which suspension or revocation has
been stayed, that the applicant or licensee file or have on file a
contractor's bond in a sum to be fixed by the registrar based upon
the seriousness of the violation, but which sum shall not be less
than fifteen thousand dollars ($15,000) nor more than 10 times that
amount required by Section 7071.6.
(c) The bond is in addition to, may not be combined with, and does
not replace any other type of bond required by this chapter. The
bond shall remain on file with the registrar for a period of at least
two years and for such any additional
time as that the registrar may
determine determines . The bond period shall
run only while the license is current, active, and in good standing,
and shall be extended until such time as the
license has been current, active, and in good standing for the
required period. Each applicant or licensee shall be required to file
only one disciplinary contractor's bond of the type described in
this section for each application or license subject to this bond
requirement.
SEC. 14. Section 7071.9 of the Business and Professions Code is
amended to read:
7071.9. (a) If the qualifying individual, as referred to in
Sections 7068 and 7068.1, is neither the proprietor, a general
partner, nor a joint licensee, he or she shall file or have on file a
qualifying individual's bond as provided in Section 7071.10 in the
sum of twelve thousand five hundred dollars ($12,500). This bond is
in addition to, and may not be combined with, any contractor's bond
required by Sections 7071.5 to 7071.8, inclusive, and is required for
the issuance, reinstatement, reactivation, or continued valid use of
a license.
(b) Excluding the claims brought by the beneficiaries specified in
paragraph (1) of subdivision (a) of Section 7071.10, the aggregate
liability of a surety on claims brought against the bond required by
this section shall not exceed the sum of seven thousand five hundred
dollars ($7,500). The bond proceeds in excess of seven thousand five
hundred dollars ($7,500) shall be reserved exclusively for the claims
of the beneficiaries specified in paragraph (1) of subdivision (a)
of Section 7071.10. However, nothing in this section shall be
construed to prevent any beneficiary specified in paragraph (1) of
subdivision (a) of Section 7071.10 from claiming or recovering the
full measure of the bond required by this section. This bond is in
addition to, and may not be combined with, any contractor's bond
required by Sections 7071.5 to 7071.8, inclusive, and is required for
the issuance, reinstatement, reactivation, or continued valid use of
a license.
(c) The responsible managing officer of a corporation shall not be
required to file or have on file a qualifying individual's bond, if
he or she owns 10 percent or more of the voting stock of the
corporation and certifies to that fact on a form prescribed by the
registrar.
(d) The qualifying individual for a limited liability company
shall not be required to file or have on file a qualifying individual'
s bond if he or she owns at least a 10 percent membership interest in
the limited liability company and certifies to that fact on a form
prescribed by the registrar.
SEC. 15. Section 7071.10 of the Business and Professions Code is
amended to read:
7071.10. (a) The qualifying individual's bond required by this
article shall be executed by an admitted surety insurer in favor of
the State of California, in a form acceptable to the registrar and
filed with the registrar by the qualifying individual. The qualifying
individual's bond shall be for the benefit of the following persons:
(1) Any A homeowner contracting for
home improvement upon the homeowner's personal family residence
damaged as a result of a violation of this chapter by the licensee.
(2) Any A person damaged as a result
of a willful and deliberate violation of this chapter by the
licensee, or by the fraud of the licensee in the execution or
performance of a construction contract.
(3) Any An employee of the licensee
damaged by the licensee's failure to pay wages.
(4) Any A person or
entity, including an express trust fund described in Section 3111 of
the Civil Code, to whom a portion of the compensation of an employee
of a licensee is paid by agreement with that employee or the
collective bargaining agent of that employee, that is damaged as the
result of the licensee's failure to pay fringe benefits for its
employees including, but not limited to, employer payments described
in Section 1773.1 of the Labor Code and regulations adopted
thereunder (without regard to whether the work was performed on a
public or private work). Damage to an express trust fund is limited
to employer payments required to be made on behalf of employees of
the licensee, as part of the overall compensation of those employees,
which the licensee fails to pay.
(b) The qualifying individual's bond shall not be required in
addition to the contractor's bond when the qualifying individual is
himself or herself the proprietor under
paragraph (1) of subdivision (a) (b) of
Section 7068 or a general partner under paragraph (2) of
subdivision (b) of Section 7068.
SEC. 16. Section 7071.11 of the Business and Professions Code is
amended to read:
7071.11. (a) The aggregate liability of a surety on a claim for
wages and fringe benefits brought against any
a bond required by this article, other than a bond required by
Section 7071.8, shall not exceed the sum of four thousand dollars
($4,000). If any a bond required by
this article is insufficient to pay all claims in full, the sum of
the bond shall be distributed to all claimants in proportion to the
amount of their respective claims.
(b) No license may be renewed, reissued, or reinstated while
any a judgment or admitted claim in
excess of the amount of the bond remains unsatisfied. The following
limitations periods apply to bonds required by this article:
(1) Any action, other than an action to recover wages or fringe
benefits, against a contractor's bond or a bond of a qualifying
individual filed by an active licensee shall be brought within two
years after the expiration of the license period during which the act
or omission occurred, or within two years of the date the license of
the active licensee was inactivated, canceled, or revoked by the
board, whichever first occurs.
(2) Any action, other than an action to recover wages or fringe
benefits, against a disciplinary bond filed by an active licensee
pursuant to Section 7071.8 shall be brought within two years after
the expiration of the license period during which the act or omission
occurred, or within two years of the date the license of the active
licensee was inactivated, canceled, or revoked by the board, or
within two years after the last date for which a disciplinary bond
filed pursuant to Section 7071.8 was required, whichever date is
first.
(3) A claim to recover wages or fringe benefits shall be brought
within six months from the date that the wage or fringe benefit
delinquencies were discovered, but in no event shall a civil action
thereon be brought later than two years from the date the wage or
fringe benefit contributions were due.
(c) Whenever the surety makes payment on any
a claim against a bond required by this article, whether
or not payment is made through a court action or otherwise, the
surety shall, within 30 days of the payment, provide notice to the
registrar. The notice required by this subdivision shall provide the
following information by declaration on a form prescribed by the
registrar:
(1) The name and license number of the contractor.
(2)
The surety bond number.
(3) The amount of payment.
(4) The statutory basis upon which the claim is made.
(5) The names of the person or persons to whom payments have been
made.
(6) Whether or not the payments were the result of a good faith
action by the surety.
The notice shall also clearly indicate whether or not the licensee
filed a protest in accordance with this section.
(d) Prior to the settlement of a claim through a good faith
payment by the surety, a licensee shall have not less than 15 days in
which to provide a written protest. This protest shall instruct the
surety not to make payment from the bond on the licensee's account
upon the specific grounds that the claim is opposed by the licensee,
and provide the surety a specific and reasonable basis for the
licensee's opposition to payment.
(1) Whenever a licensee files a protest in accordance with this
subdivision, the board shall investigate the matter and file
disciplinary action as set forth under this chapter if there is
evidence that the surety has sustained a loss as the result of a good
faith payment made for the purpose of mitigating any damages
incurred by any person or entity covered under Section 7071.5.
(2) Any A licensee that fails to
file a protest as specified in this subdivision shall have 90 days
from the date of notification by the board to submit proof of payment
of the actual amount owed to the surety and, if applicable, proof of
payment of any judgment or admitted claim in excess of the amount of
the bond or, by operation of law, the license shall be suspended at
the end of the 90 days. A license suspension pursuant to this
subdivision shall be disclosed indefinitely as a failure to settle
outstanding final liabilities in violation of this chapter. The
disclosure specified by this subdivision shall also be applicable to
all licenses covered by the provisions of subdivision (d).
(e) No license may be renewed, reissued, or reinstated while
any a surety remains unreimbursed for
any a loss or expense sustained on
any a bond issued for the licensee or
for any an entity of which any
an officer, director, member,
partner, manager, or qualifying person was an officer,
director, member, partner, manager, or
qualifying person of the licensee while the licensee was subject to
suspension or disciplinary action under this section.
(f) The licensee may provide the board with a notarized copy of an
accord, reached with the surety to satisfy the debt in lieu of full
payment. By operation of law, failure to abide by the accord shall
result in the automatic suspension of any a
license to which this section applies. A license that is
suspended for failure to abide by the accord may only be renewed or
reinstated when proof of satisfaction of all debts is made.
(g) Legal fees may not be charged against the bond by the board.
SEC. 17. Section 7071.17 of the Business and Professions Code is
amended to read:
7071.17. (a) Notwithstanding any other provision of law, the
board shall require, as a condition precedent to accepting an
application for licensure, renewal, reinstatement, or to change
officers or other personnel of record, that an applicant, previously
found to have failed or refused to pay a contractor, subcontractor,
consumer, materials supplier, or employee based on an unsatisfied
final judgment, file or have on file with the board a bond sufficient
to guarantee payment of an amount equal to the unsatisfied final
judgment or judgments. The applicant shall have 90 days from the date
of notification by the board to file the bond or the application
shall become void and the applicant shall reapply for issuance,
reinstatement, or reactivation of a license. The board may not issue,
reinstate, or reactivate a license until the bond is filed with the
board. The bond required by this section is in addition to the
contractor's bond. The bond shall be on file for a minimum of one
year, after which the bond may be removed by submitting proof of
satisfaction of all debts. The applicant may provide the board with a
notarized copy of any accord, reached with any individual holding an
unsatisfied final judgment, to satisfy a debt in lieu of filing the
bond. The board shall include on the license application for
issuance, reinstatement, or reactivation, a statement, to be made
under penalty of perjury, as to whether there are any unsatisfied
judgments against the applicant on behalf of contractors,
subcontractors, consumers, materials suppliers, or the applicant's
employees. Notwithstanding any other provision of law, if it is found
that the applicant falsified the statement then the license will be
retroactively suspended to the date of issuance and the license will
stay suspended until the bond, satisfaction of judgment, or notarized
copy of any accord applicable under this section is filed.
(b) Notwithstanding any other provision of law, all licensees
shall notify the registrar in writing of any unsatisfied final
judgment imposed on the licensee. If the licensee fails to notify the
registrar in writing within 90 days, the license shall be
automatically suspended on the date that the registrar is informed,
or is made aware of the unsatisfied final judgment. The suspension
shall not be removed until proof of satisfaction of the judgment, or
in lieu thereof, a notarized copy of an accord is submitted to the
registrar. If the licensee notifies the registrar in writing within
90 days of the imposition of any unsatisfied final judgment, the
licensee shall, as a condition to the continual maintenance of the
license, file or have on file with the board a bond sufficient to
guarantee payment of an amount equal to all unsatisfied judgments
applicable under this section. The licensee has 90 days from date of
notification by the board to file the bond or at the end of the 90
days the license shall be automatically suspended. In lieu of filing
the bond required by this section, the licensee may provide the board
with a notarized copy of any accord reached with any individual
holding an unsatisfied final judgment.
(c) By operation of law, failure to maintain the bond or failure
to abide by the accord shall result in the automatic suspension of
any license to which this section applies.
(d) A license that is suspended for failure to comply with the
provisions of this section can only be reinstated when proof of
satisfaction of all debts is made, or when a notarized copy of an
accord has been filed as set forth under this section.
(e) This section applies only with respect to an unsatisfied final
judgment that is substantially related to the construction
activities of a licensee licensed under this chapter, or to the
qualifications, functions, or duties of the license.
(f) Except as otherwise provided, this section shall not apply to
an applicant or licensee when the financial obligation covered by
this section has been discharged in a bankruptcy proceeding.
(g) Except as otherwise provided, the bond shall remain in full
force in the amount posted until the entire debt is satisfied. If, at
the time of renewal, the licensee submits proof of partial
satisfaction of the financial obligations covered by this section,
the board may authorize the bond to be reduced to the amount of the
unsatisfied portion of the outstanding judgment. When the licensee
submits proof of satisfaction of all debts, the bond requirement may
be removed.
(h) The board shall take the actions required by this section upon
notification by any party having knowledge of the outstanding
judgment upon a showing of proof of the judgment.
(i) For the purposes of this section, the term "judgment" also
includes any final arbitration award where the time to file a
petition for a trial de novo or a petition to vacate or correct the
arbitration award has expired, and no petition is pending.
(j) The qualifying person and any member
partner of the licensee or personnel of the licensee named as a
judgment debtor in an unsatisfied final judgment shall be
automatically prohibited from serving as an officer, director,
associate, partner, owner, manager, qualifying individual,
or other personnel of record of another licensee. This prohibition
shall cause the license of any other existing renewable licensed
entity with any of the same personnel of record as the judgment
debtor licensee to be suspended until the license of the judgment
debtor is reinstated or until those same personnel of record
disassociate themselves from the renewable licensed entity.
(k) For purposes of this section, a cash deposit may be submitted
in lieu of the bond.
() Notwithstanding subdivision (f), the failure of a licensee to
notify the registrar of any an
unsatisfied final judgment in accordance with this section is cause
for disciplinary action.
SEC. 18. Section 7072.5 of the Business and Professions Code is
amended to read:
7072.5. (a) Upon the issuance of a license, a plasticized pocket
card of a size, design, and content as may be determined by the
registrar shall be issued at no cost to each licensee, or to the
partners or , managers, officers ,
or responsible managing officer
officers of licensees licensed as other than individuals, which
card shall be evidence that the licensee is duly licensed pursuant
to this chapter. All cards issued shall be surrendered upon the
suspension, revocation, or denial of renewal of the license, and
shall be mailed or delivered to the board within five days of the
suspension, revocation, or denial.
(b) When any a person to whom a card
is issued terminates his or her position, office, or association
with a licensee that is licensed as other than an individual, that
person shall surrender his or her card to the licensee and within
five days thereafter the card shall be mailed or delivered by the
licensee to the board for cancellation.
SEC. 19. Section 7075.1 of the Business and Professions Code is
amended to read:
7075.1. (a) No license, regardless of type or classification,
shall be transferable to any other person or entity under any
circumstances.
(b) A license number may be reissued after cancellation,
revocation, suspension, or expiration beyond the renewal period
specified in Section 7141, only under the following circumstances:
(1) To an individual upon application.
(2) To a partnership upon application if there is no change in the
partners or partnership structure.
(3) To a corporation upon application if there is no change in the
status of the corporation as registered with the California
Secretary of State.
(4) To a limited liability company upon application if there is no
change in the status of the company as registered with the Secretary
of State.
(c) A license number may be reissued or reassigned to a different
entity only under the following conditions:
(1) To a corporation when the parent corporation has merged or
created a subsidiary, the subsidiary has merged into the parent
corporation, or the corporation has changed its filing status with
the Secretary of State from a domestic corporation to a foreign
corporation or from a foreign corporation to a domestic corporation,
and the new entity is being formed to continue the business of the
formerly licensed corporation.
(2) To a limited liability company when the parent limited
liability company has merged or created a subsidiary, the subsidiary
has merged into the parent limited liability company, or the limited
liability company has changed its filing status with the Secretary of
State from a domestic limited liability company to a foreign limited
liability company or from a foreign limited liability company to a
domestic limited liability company, and the new entity is being
formed to continue the business of the formerly licensed limited
liability company.
(2)
(3) To an individual when the individual is an
immediate family member of a licensed individual who is deceased or
absent and the license is required to continue an existing family
contracting business.
(3)
(4) To a corporation or limited liability company
when created by immediate members of an individual licensee's
family to continue an existing deceased or absent individual licensee'
s contracting business.
(4)
(5) To a corporation or limited liability c
ompany when the corporation or limited liability
company is formed by an individual licensee and the individual
licensee maintains ownership directly or indirectly of shares or
membership interests evidencing more than 50
percent of the voting power.
(6) To a corporation or limited liability company that acquires a
licensee pursuant to an asset sale provided that the corporation or
limited liability company has a qualifier as required by Section
7068.
For purposes of this section, an immediate family member of a
deceased or absent licensed individual is either a spouse,
father, mother, brother, sister, son, daughter, stepson,
stepdaughter, grandson, granddaughter, grandfather, grandmother,
son-in-law, or daughter-in-law.
SEC. 20. Section 7076 of the Business and Professions Code is
amended to read:
7076. (a) An individual license shall be canceled upon the death
of a person licensed as an individual. An immediate member of the
family of the deceased licensee may request a continuance of the
license to complete projects in progress and undertake new work for a
reasonable amount of time to be determined by rules of the board.
The request for a continuance must be made in writing and received at
the board's headquarters office within 90 days after the death.
Approval of the continuance of an individual license may be
contingent upon meeting the bond requirements of Sections 7071.5 and
7071.6 within 90 days of notification by the board of that
requirement. The immediate member of the family must apply for and
obtain his or her own license to continue contracting after the
continuance expires.
(b) A partnership license shall be canceled upon the death of a
general partner. The remaining partner or partners shall notify the
registrar in writing within 90 days of the death of a general
partner. Failure to notify the registrar within 90 days of the death
is grounds for disciplinary action.
The remaining general partner or partners may request a
continuance of the license to complete projects in progress and
undertake new work for a reasonable amount of time to be determined
by rules of the board. The request for a continuance must be made in
writing and received at the board's headquarters office within 90
days after the death. The remaining general partner or partners must
apply for and obtain a new license to continue contracting after the
continuance expires.
(c) A partnership license shall be canceled upon the
disassociation of a general partner or upon the dissolution of the
partnership. The disassociating partner or the remaining partner or
partners shall notify the registrar in writing within 90 days of the
disassociation of a general partner or dissolution of the
partnership. Failure to notify the registrar of the disassociation or
dissolution within 90 days shall cause the license to be canceled
effective the date the written notification is received at the board'
s headquarters office. Failure to notify the registrar within 90 days
of the disassociation or dissolution is grounds for disciplinary
action. The remaining general partner or partners may request a
continuance of the license to complete projects contracted for or in
progress prior to the date of disassociation or dissolution for a
reasonable length of time to be determined by rules of the board. The
request for a continuance must be made in writing and received at
the board's headquarters office within 90 days after the
disassociation or dissolution. The remaining general partner or
partners must apply for and obtain a new license to undertake new
work and to continue contracting after the continuance expires.
(d) The general partner or partners shall notify the registrar in
writing within 90 days of the death of a limited partner. Failure to
notify the registrar within 90 days of the death is grounds for
disciplinary action.
The death of a limited partner will not affect the partnership
license unless the partnership license has only one limited partner.
In this case, the license will be canceled upon the death of the
limited partner unless a new limited partner is added to the license
within 90 days of the death.
If the license is canceled, the remaining general partner or
partners may request a continuance of the license to complete
projects in progress and to undertake new work for a reasonable
amount of time to be determined by rules of the board. The request
for a continuance must be made in writing and received at the board's
headquarters office within 90 days after the death. The remaining
general partner or partners must apply for and obtain a new license
to continue contracting after the continuance expires.
(e) The general partner or partners shall notify the registrar in
writing within 90 days of the disassociation of a limited partner.
Failure to notify the registrar of the disassociation, within 90
days, shall cause the disassociation to be effective the date the
written notification is received at the board's headquarters office.
Failure to notify the registrar within 90 days of the disassociation
is grounds for disciplinary action.
The disassociation of a limited partner will not affect the
partnership license unless the partnership license has only one
limited partner. In this case, the license will be canceled upon the
disassociation of the limited partner unless a new limited partner is
added to the license within 90 days of the disassociation. If the
license is canceled, the remaining general partner or partners may
request a continuance of the license to complete projects contracted
for or in progress prior to the date of disassociation for a
reasonable amount of time to be determined by rules of the board. The
request for a continuance must be made in writing and received at
the board's headquarters office within 90 days after the death. The
remaining general partner or partners must apply for and obtain a new
license to undertake new work and to continue contracting after the
continuance expires.
(f) A joint venture license shall be canceled upon the
cancellation, revocation, or disassociation of any of its entity
licenses or upon the dissolution of the joint venture. The registrar
shall be notified in writing within 90 days of the disassociation of
a joint venture entity or dissolution of the joint venture. Failure
to notify the registrar of the disassociation or dissolution within
90 days shall cause the license to be canceled effective the date the
written notification is received at the board's headquarters office.
Failure to notify the registrar within 90 days of the disassociation
or dissolution is grounds for disciplinary action.
Any remaining entity or entities may request a continuance of the
license to complete projects contracted for or in progress prior to
the date of disassociation or dissolution for a reasonable amount of
time to be determined by rules of the board. The request for a
continuance must be made in writing and received at the board's
headquarters office within 90 days of the disassociation or
dissolution. The remaining entity or entities must apply for and
obtain a new license to undertake new work and to continue
contracting after the continuance expires.
(g) Any individual, partnership, or joint venture license
continued in accordance with this section is subject to all other
provisions of this chapter.
(h) A corporation license shall be canceled upon the corporation's
dissolution, merger, or surrender of its right to do business in
this state. The corporation shall notify the registrar in writing
within 90 days of the dissolution, merger, or surrender. Failure to
notify the registrar of the dissolution, merger, or surrender within
90 days shall cause the license to be canceled effective the date
written notification is received at the board's headquarters office.
If the corporation fails to notify the board of the dissolution,
merger, or surrender, the corporation license shall be canceled 60
days after the board's discovery when researching the corporate
records of the Secretary of State. Failure to notify the registrar
within 90 days of the dissolution, merger, or surrender is grounds
for disciplinary action.
(i) A limited liability company license shall be canceled upon the
company's dissolution, merger, or surrender of its right to do
business in this state. The limited liability company shall notify
the registrar in writing within 90 days of the dissolution, merger,
or surrender. Failure to notify the register of the dissolution,
merger, or surrender within 90 days shall cause the license to be
canceled effective the date written notification is received at the
board's headquarters office. If the limited liability company fails
to notify the board of the dissolution, merger, or surrender, the
limited liability company license shall be canceled 60 days after the
board's discovery when researching the records of the Secretary of
State. Failure to notify the registrar within 90 days of the
dissolution, merger, or surrender is grounds for disciplinary action.
(i)
(j) The registrar shall review and accept the petition
of a licensee who disputes the date of cancellation upon a showing of
good cause. This petition shall be received within 90 days of the
board's official notice of cancellation.
SEC. 21. Section 7076.2 of the Business and Professions Code is
amended to read:
7076.2. Notwithstanding any other provision of law, the failure
of a contractor licensed to do business as a corporation or a
limited liability company in this state to be registered and in
good standing with the Secretary of State after notice from the
registrar shall result in the automatic suspension of the
corporate license by operation of law. The registrar shall
notify the corporate licensee in writing of its
failure to be registered and in good standing with the Secretary of
State and that the licensee shall be suspended 30 days from the date
of the notice if the corporate licensee does not
provide proof satisfactory to the registrar that it is properly
registered and in good standing with the Secretary of State.
Reinstatement may be made at any time following the suspension by
providing proof satisfactory to the registrar that the
corporate license is properly registered and in good
standing.
SEC. 22. Section 7085.6 of the Business and Professions Code is
amended to read:
7085.6. (a) (1) The failure of a licensee to comply with an
arbitration award rendered under this article shall result in the
automatic suspension of a license by operation of law.
(2) The registrar shall notify the licensee by certified mail of
the failure to comply with the arbitrator's award, and that the
license shall be automatically suspended 30 calendar days from the
date of that notice.
(3) The licensee may appeal the suspension for noncompliance
within 15 calendar days after service of the notice by written notice
to the registrar.
(4) Reinstatement may be made at any time following the suspension
by complying with the arbitrator's award and the final order of the
registrar. If no reinstatement of the license is made within 90 days
of the date of the automatic suspension, the license and any other
contractors' license issued to the licensee shall be automatically
revoked by operation of law for a period to be determined by the
registrar pursuant to Section 7102.
(5) The registrar may delay, for good cause, the revocation of a
contractor's license for failure to comply with the arbitration
award. The delay in the revocation of the license shall not exceed
one year. When seeking a delay of the revocation of his or her
license, a licensee shall apply to the registrar in writing prior to
the date of the revocation of the licensee's license by operation of
law and state the reasons that establish good cause for the delay.
The registrar's power to grant a delay of the revocation shall expire
upon the effective date of the revocation of the licensee's license
by operation of law.
(b) The licensee shall be automatically prohibited from serving as
an officer, director, associate, partner, manager, or
qualifying individual of another licensee, for the period determined
by the registrar and the employment, election, or association of that
person by another licensee shall constitute grounds for disciplinary
action. Any A qualifier disassociated
pursuant to this section shall be replaced within 90 days from the
date of disassociation. Upon failure to replace the qualifier within
90 days of the disassociation, the license of the other licensee
shall be automatically suspended or the qualifier's classification
removed at the end of the 90 days.
SEC. 23. Section 7090.1 of the Business and Professions Code is
amended to read:
7090.1. (a) (1) Notwithstanding any other provisions of law, the
failure to pay a civil penalty, or to comply with an order of
correction or an order to pay a specified sum to an injured party in
lieu of correction once the order has become final, shall result in
the automatic suspension of a license by operation of law 30 days
after noncompliance with the terms of the order.
(2) The registrar shall notify the licensee in writing of the
failure to comply with the final order and that the license shall be
suspended 30 days from the date of the notice.
(3) The licensee may contest the determination of noncompliance
within 15 days after service of the notice, by written notice to the
registrar. Upon receipt of the written notice, the registrar may
reconsider the determination and after reconsideration may affirm or
set aside the suspension.
(4) Reinstatement may be made at any time following the suspension
by complying with the final order of the citation. If no
reinstatement of the license is made within 90 days of the date of
the automatic suspension, the cited license and any other contractors'
license issued to the licensee shall be automatically revoked by
operation of law for a period to be determined by the registrar
pursuant to Section 7102.
(5) The
registrar may delay, for good cause, the revocation of a contractor's
license for failure to comply with the final order of the citation.
The delay in the revocation of the license shall not exceed one year.
When seeking a delay of the revocation of his or her license, a
licensee shall apply to the registrar in writing prior to the date of
the revocation of the licensee's license by operation of law and
state the reasons that establish good cause for the delay. The
registrar's power to grant a delay of the revocation shall expire
upon the effective date of the revocation of the licensee's license
by operation of law.
(b) The cited licensee shall also be automatically prohibited from
serving as an officer, director, associate, partner, manager,
or qualifying individual of another licensee, for the period
determined by the registrar, and the employment, election, or
association of that person by a licensee shall constitute grounds for
disciplinary action. Any A qualifier
disassociated pursuant to this section shall be replaced within 90
days of the date of disassociation. Upon failure to replace the
qualifier within 90 days of the prohibition, the license of the other
licensee shall be automatically suspended or the qualifier's
classification removed at the end of the 90 days.
SEC. 24. Section 7096 of the Business and Professions Code is
amended to read:
7096. For the purposes of this chapter, the term "licensee" shall
include an individual, copartnership, corporation, limited
liability company, joint venture, or any combination or
organization licensed under this chapter, and shall also include any
named responsible managing officer , responsible managing
manager, or member of the personnel of
such that licentiate whose appearance
has qualified the licentiate under the provisions of Section 7068.
SEC. 25. Section 7121 of the Business and Professions Code is
amended to read:
7121. Any A person who has been
denied a license for a reason other than failure to document
sufficient satisfactory experience for a supplemental classification
for an existing license, or who has had his or her license revoked,
or whose license is under suspension, or who has failed to renew his
or her license while it was under suspension, or who has been a
member, partner, officer, director,
manager, or associate of any partnership, corporation,
limited liability company, firm, or association whose
application for a license has been denied for a reason other than
failure to document sufficient satisfactory experience for a
supplemental classification for an existing license, or whose license
has been revoked, or whose license is under suspension, or who has
failed to renew a license while it was under suspension, and while
acting as a member, partner, officer,
director, manager, or associate had knowledge of or
participated in any of the prohibited acts for which the license was
denied, suspended, or revoked, shall be prohibited from serving as an
officer, director, associate, partner, manager, or
qualifying individual of a licensee, and the employment, election, or
association of this type of person by a licensee in any capacity
other than as a nonsupervising bona fide employee shall constitute
grounds for disciplinary action.
SEC. 26. Section 7121.1 of the Business and Professions Code is
amended to read:
7121.1. Notwithstanding any other provision of this chapter, the
disassociation of any member, a partner,
officer, director, manager, or associate from the
license of any a partnership,
corporation, limited liability company, firm, or
association whose license has been cited pursuant to Section 7099
shall not relieve the member, partner,
officer, director, manager, or associate from
responsibility for complying with the citation if he or she had
knowledge of, or participated in, any of the prohibited acts for
which the citation was issued. Section 7121 shall apply to
any member, a partner, officer, director,
manager, or associate of a licensee that fails to comply with a
citation after it is final.
SEC. 27. Section 7121.5 of the Business and Professions Code is
amended to read:
7121.5. Any A person who was the
qualifying individual on a revoked license, or of a license under
suspension, or of a license that was not renewed while it was under
suspension, shall be prohibited from serving as an officer, director,
associate, partner, manager, or qualifying individual of
a licensee, whether or not the individual had knowledge of or
participated in the prohibited acts or omissions for which the
license was revoked, or suspended, and the employment, election, or
association of such that person by a
licensee shall constitute grounds for disciplinary action.
SEC. 28. Section 7121.6 of the Business and Professions Code is
amended to read:
7121.6. (a) An individual who meets all of the following criteria
shall not perform any act regulated under this chapter for or on
behalf of a licensee, other than as a bona fide nonsupervising
employee:
(1) The individual was a member, an
officer, director, owner, manager, or partner of a license
that was revoked.
(2) The individual had knowledge of or participated in any act or
omission for which the license was revoked.
(3) The individual is not eligible for reinstatement for licensure
under Section 7102.
(b) An individual who meets all of the following criteria shall
not perform any act regulated under this chapter for or on behalf of
a licensee, other than as a bona fide nonsupervising employee:
(1) The individual furnished the qualifications for licensure, as
set forth under Section 7068, and that license was revoked.
(2) The individual served in the capacity of the qualifying
individual during the commission or omission of any of the acts that
resulted in the revocation of the license, whether or not he or she
had knowledge of or participated in those acts.
(3) The individual is not eligible for reinstatement for licensure
under Section 7102.
(c) A violation of this section is a misdemeanor punishable by a
fine of not less than four thousand five hundred dollars ($4,500), by
imprisonment in a county jail for not less than 90 days nor more
than one year, or by both the fine and imprisonment. The penalty
provided by this subdivision is cumulative to the penalties available
under other laws of this state.
(d) Notwithstanding any other provision of law to the contrary, an
indictment for any violation of this section shall be found or an
information or complaint filed within four years from the performance
of any act that is prohibited under this section.
SEC. 29. Section 7122 of the Business and Professions Code is
amended to read:
7122. The performance by any an
individual, partnership, corporation, limited liability company,
firm, or association of any an
act or omission constituting a cause for disciplinary action,
likewise constitutes a cause for disciplinary action against
any a licensee other than the individual
qualifying on behalf of the individual or entity, if the licensee was
a member, partner, officer, director,
manager, or associate of such that
individual, partnership, corporation, limited liability
company, firm , or association at the time
such the act or omission occurred, and had
knowledge of or participated in such the
prohibited act or omission.
SEC. 30. Section 7122.1 of the Business and Professions Code is
amended to read:
7122.1. Notwithstanding Section 7068.2 or any other provision of
this chapter, the disassociation of any a
qualifying partner, responsible managing officer, or
responsible managing employee individual from a
license after the act or omission has occurred that resulted in a
citation pursuant to Section 7099 shall not relieve the qualifying
partner, responsible managing officer, or responsible
managing employee individual from responsibility
for complying with the citation. Section 7122.5 shall apply to
any a qualifying partner,
responsible managing officer, or responsible managing employee
individual of a licensee that fails to comply
with a citation after it is final.
SEC. 31. Section 7122.2 of the Business and Professions Code is
amended to read:
7122.2. (a) Notwithstanding Section 7068.2 or any other
provisions of this chapter, the disassociation of any
a qualifying partner, responsible
managing officer, or responsible managing employee
individual from a license that has been referred to arbitration
pursuant to Section 7085 shall not relieve the qualifying
partner, responsible managing officer, or responsible managing
employee individual from the responsibility of
complying with an arbitration award rendered as a result of acts or
omissions committed while acting as the qualifying partner,
responsible managing officer, or responsible managing employee
individual for the license as provided under
Sections 7068 and 7068.1.
(b) Section 7122.5 shall apply to any a
qualifying partner, responsible managing officer, or
responsible managing employee individual of a
licensee that fails to comply with an arbitration award once it is
rendered.
SEC. 32. Section 7122.5 of the Business and Professions Code is
amended to read:
7122.5. The performance by any an
individual, partnership, corporation, limited liability company,
firm, or association of any an
act or omission constituting a cause for disciplinary action,
likewise constitutes a cause for disciplinary action against
any a licensee who at the time such
that the act or omission occurred was the
responsible managing employee, qualifying partner,
responsible managing officer, or qualifying member
individual of such that
individual, partnership, corporation, limited liability
company, firm, or association, whether or not he or she
had knowledge of or participated in the prohibited act or
omission.
SEC. 33. Section 7137 of the Business and Professions Code is
amended to read:
7137. The board shall set fees by regulation. These fees shall
not exceed the following schedule:
(a) The application fee for an original license in a single
classification shall not be more than three hundred dollars ($300).
The application fee for each additional classification applied for
in connection with an original license shall not be more than
seventy-five dollars ($75).
The application fee for each additional classification pursuant to
Section 7059 shall not be more than seventy-five dollars ($75).
The application fee to replace a responsible managing officer
, responsible managing manager, or responsible
managing employee pursuant to Section 7068.2 shall not be more
than seventy-five dollars ($75).
(b) The fee for rescheduling an examination for an applicant who
has applied for an original license, additional classification, a
change of responsible managing officer , responsible managing
manager, or responsible managing employee, or for an asbestos
certification or hazardous substance removal certification, shall not
be more than sixty dollars ($60).
(c) The fee for scheduling or rescheduling an examination for a
licensee who is required to take the examination as a condition of
probation shall not be more than sixty dollars ($60).
(d) The initial license fee for an active or inactive license
shall not be more than one hundred eighty dollars ($180).
(e) The renewal fee for an active license shall not be more than
three hundred sixty dollars ($360).
The renewal fee for an inactive license shall not be more than one
hundred eighty dollars ($180).
(f) The delinquency fee is an amount equal to 50 percent of the
renewal fee, if the license is renewed after its expiration.
(g) The registration fee for a home improvement salesperson shall
not be more than seventy-five dollars ($75).
(h) The renewal fee for a home improvement salesperson
registration shall not be more than seventy-five dollars ($75).
(i) The application fee for an asbestos certification examination
shall not be more than seventy-five dollars ($75).
(j) The application fee for a hazardous substance removal or
remedial action certification examination shall not be more than
seventy-five dollars ($75).
SEC. 34. Section 7138 of the Business and Professions Code is
amended to read:
7138. Notwithstanding any other provision of law, any
a fee paid in connection with any
a service or application covered by Section 7137
shall accrete accrue to the
Contractors' License Fund as an earned fee and shall not be refunded.
SEC. 35. Section 7152 of the Business and Professions Code is
amended to read:
7152. (a) "Home improvement salesperson" is a person employed by
a home improvement contractor licensed under this chapter to solicit,
sell, negotiate, or execute contracts for home improvements, for the
sale, installation or furnishing of home improvement goods or
services, or of swimming pools, spas, or hot tubs.
(b) The following shall not be required to be registered as home
improvement salespersons:
(1) An officer of record of a corporation licensed pursuant to
this chapter , or a manager of record of a limited liability
company licensed pursuant to this chapter .
(2) A general partner listed on the license record of a
partnership licensed pursuant to this chapter.
(3) A qualifying person, as defined in Section 7068
7025 .
(4) A salesperson whose sales are all made pursuant to
negotiations between the parties if the negotiations are initiated by
the prospective buyer at or with a general merchandise retail
establishment that operates from a fixed location where goods or
services are offered for sale.
(5) A person who contacts the prospective buyer for the exclusive
purpose of scheduling appointments for a registered home improvement
salesperson.
(6) A bona fide service repairperson who is in the employ of a
licensed contractor and whose repair or service call is limited to
the service, repair, or emergency repair initially requested by the
buyer of the service.
(c) The exemption to registration provided under paragraphs (1),
(2), and (3) of subdivision (b) shall apply only to those individuals
who, at the time of the sales transaction, are listed as personnel
of record for the licensee responsible for soliciting, negotiating,
or contracting for a service or improvement that is subject to
regulation under this article.
SEC. 36. Section 17002 of the Corporations Code is amended to
read:
17002. (a) Subject to any limitations contained in the articles
of organization and to compliance with any other applicable laws, a
limited liability company may engage in any lawful business activity,
whether or not for profit, except the banking business, the business
of issuing policies of insurance and assuming insurance risks, or
the trust company business.
(b) Notwithstanding subdivision (a) and as specifically provided
in this subdivision, a limited liability company may operate as a
health care service plan licensed pursuant to Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code if
the limited liability company is a subsidiary of a health care
service plan licensed pursuant to those provisions and the limited
liability company is established to serve an existing line of
business of the parent health care service plan. Notwithstanding any
other provision of law, the tort or contract liability of a limited
liability company created to operate as a health care service plan
under this subdivision and its members is not limited or restricted
in any manner because of the limited liability company status of the
health care service plan.
(c) A limited liability company may render occupational,
nonprofessional services that may be lawfully rendered only pursuant
to a license, certification, or registration authorized by the
Business and Professions Code if the applicable provisions of the
Business and Professions Code identify those services as
occupational, nonprofessional services and authorize a limited
liability company to hold that license, certification, or
registration.
SEC. 37. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.