LawReferenceBook2018

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1 California Contractors License Law & Reference Book 2018 Edition With Rules and Regulations Contractors State License Board State of California Edmund G. Brown, Jr., Governor

2 This book is an official publication of the State of California. It may not be reproduced in whole or in part without the express permission of the California Contractors State License Board. is available from The California Contractors License Law & Reference Book (2018 Edition) Matthew Bender & Company, Inc. Copies may be purchased by calling 1-800-223- 1940; by writing to Matthew Bender & Company, Attn. Inbound Sales, 9443 Springboro Pike, Miamisburg, OH 45342; or through the www.lexisnexis.com/bookstore website. The price is $33.50, plus $10.44 Shipping & Handling, and is available as follows: Mail order: Send a check or money order, payable to Matthew Bender & Company, Inc., All orders are shipped by and include a street address and the recipient’s name. carrier and cannot be delivered to a post office box. The is not sold at any office California Contractors License Law & Reference Book of the Contractors State License Board . Copies may be available from specialty book - stores—check your local telephone directory. ISBN: 978-1-5221-4970-5 © 2018 California Contractors State License Board © 2018 Matthew Bender & Company, Inc., a member of the LexisNexis Group. All rights reserved. LexisNexis, the knowledge burst logo, and Michie are trademarks of Reed Elsevier Properties Inc., used under license. Matthew Bender is a registered trademark of Matthew Bender Properties Inc. The California regulations appearing in this publication have been extracted from Barclays Official California Code of Regulations, copyright © 2018, State of California. This material may not be commercially reproduced or sold in printed or electronic form without written permission of Thomson/West, and is subject to the following disclaimer: THOMSON/WEST MAKES NO WARRANTY OR REPRESENTATION WHATSO - EVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE INFORMA - TION CONTAINED IN THIS PUBLICATION; AND THOMSON/WEST ASSUMES NO LIABILITY WHATSOEVER WITH RESPECT TO ANY USE OF THIS PUBLICATION OR ANY PORTION THEREOF OR WITH RE - SPECT TO ANY DAMAGES WHICH MAY RESULT FROM SUCH USE. Matthew Bender & Company, Inc. Editorial Offices 701 E. Water Street Charlottesville, VA 22902 800-446-3410 www.lexisnexis.com Product Number 2970024 (Pub. 29700)

3 CONTRACTORS STATE LICENSE BOARD OFFICERS & MEMBERS Chair, Contractor Member Kevin J. Albanese, Vice Chair, Public Member Marlo Richardson, Johnny Simpson, Secretary, Public Member Public Member Agustin Beltran, Contractor Member Linda Clifford, David De La Torre, Public Member David Dias, Labor Member Susan Granzella, Public Member Joan Hancock, Contractor Member Pastor Herrera Jr., Public Member Ed Lang, Public Member Michael Layton, Public Member Frank Schetter, Contractor Member Nancy Springer, Building Official David R. Fogt, Registrar of Contractors

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5 CALIFORNIA CONTRACTO v RS LICENSE LAW & REF ERENCE BOOK ABOUT THIS BOOK The California Contractors License Law & Reference Book begins with several narrative chapters that processes describe required licensing and legal affecting contractors. contracting laws, California rules, and regulations are detailed in the later chapters ; l aws and regulations are those in effect on January 1, 201 8 , unless otherwise noted.

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7 CALIFORNIA CONTRACTO ERENCE BOOK vii RS LICENSE LAW & REF SUMMARY OF MAJOR CHANGES TO CONTRACTOR LAW EFFECTIVE JANUARY 1, 2018 unless indicated otherwise AB 92 (Bonta) Amends Sections 7201 an d 10261 of the Public Contract Code, relating to public contracts This bill extends from January 1, 2018 to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor or subcontractor prior to completion of a public works project. The existing statutes prohibit a public agency from retaining more than 5 percent of a contract price until final completion of a project, with certain exceptions. (Chapter 37, Statutes of 2017) AB 1070 (Gonz alez Fletcher) Adds Sections 7169 and 7170 to the Business and Professions Code, and Section 2854.6 to the Public Utilities Code This bill requires the Contractors State License Board (CSLB), in collaboration with the Public Utilities Commission (PUC), dev elop and make available on its website a "solar energy system disclosure document" for solar energy customers (by July 1, 2018), compile an annual report documenting consumer complaints relating to solar contractors (by July 1, 2019), and develop

8 viii RS LICENSE LAW & REF ERENCE BOOK CALIFORNIA CONTRACTO standardi zed inputs and assumptions to be used in the calculation and presentation of electric utility bill savings to a consumer (by July 1, 2019). (Chapter 662, Statutes of 2017) AB 1278 (Low) Amends Section 7071.17 of the Business and Professions Code, relating to contractors This bill clarifies that, if a judgment is entered against a licensed contractor, the licensee's qualifying individual or personnel of record at the time the activities occurred on which the judgment is based, rather than only when the judgment is entered, is prohibited from serving on another license as a qualifying individual or other personnel of record, and makes other clarifying changes. (Chapter 506, Statutes of 2017) AB 1284 (Dababneh) Amends, repeals, and adds Section 10133.1 of the Business and Professions Code, and amends, repeals, or adds multiple sections of the Finance Code.* This bill establishes requirements for Property Assessed Clean Energy (PACE) program administrators that must be met before PACE assessment contracts m ay be funded and recorded by a public agency, renames the California Finance Lenders Law as the California Financing Law (CFL), requires program administrators to be licensed under the CFL, and establishes a regulatory scheme for the oversight of PACE soli citors and PACE solicitor agents. * This bill was declared urgent and therefore takes effect immediately, though certain prohibitions affecting program administrator approval of assessment contracts for funding and recording by a public agency commence

9 CALIFORNIA CONTRACTO ERENCE BOOK ix RS LICENSE LAW & REF Apri l 1, 2018, and the requirement that a program administrator administering a PACE program on behalf of a public agency be licensed by the commissioner under the California Financing Law commences January 1, 2019. (Chapter 475, Statutes of 2017) hu) AB 1357 (C Amends Section 7197 of the Business and Professions Code and Section 1102.4 of the Civil Code, relating to home inspectors This bill exempts a licensed roofing contractor, if certain conditions are met, from the provisions relating to a home inspector that prohibit repairs to a structure on which the inspector, or the inspector’s company, has prepared a home inspection report in the past 12 months. (Chapter 508, Statutes of 2017) SB 242 (Skinner) Adds Chapter 29.1 (commencing with Section 5900) to Part 3 of Division 7 of the Streets and Highways Code, relating to the Property Assessed Clean Energy program This bill establishes requirements for third -party program administrators of Property Assessed Clean Energy (PACE) programs. It provides that it is u nlawful to commence work under a home improvement contract and that the contract is unenforceable if the property owner entered into the home improvement contract based on the reasonable belief that the work would be covered by the PACE program and the pro perty owner applies for, accepts, and cancels PACE financing within the three -day right to cancel period established in existing law. (Chapter 484, Statutes of 2017)

10 x CALIFORNIA CONTRACTO ERENCE BOOK RS LICENSE LAW & REF SB 486 (Monning) Amends Sections 7099.2 and 7124.6 of the Business and Professions Code, relating to professions and vocations This bill authorizes the Contractors State License Board to issue letters of admonishment to an applicant, licensee, or registrant rather than issuing a citation, and it sets e bill would specific conditions for issuing letters. Th require the letter to inform the applicant, licensee, or registrant that he or she may submit a written request for an office conference to contest the letter of admonishment, subject to specified procedures, including a process to appeal a de cision, or comply with the letter, as provided. (Chapter 308, Statutes of 2017)

11 CALIFORNIA CONTRACTO RS LICENSE LAW & REF xi ERENCE BOOK SECTIONS AFFECTED BY 201 7 LEGISLATION Business & Professions Code Type of Chapter Number Change Page Section Affected Information to be provided on Internet; 165 27 Amended 429 Entiti es in Department of Consumer Affairs required to comply Provision of federal employer identification 30 168 Repealed 828 number or social security number by Repealed July 1, 2018) (First of two; licensee Provision of federal employer identif ication 30 171 828 Add ed number or social security number by Operative July 1, (Second of two; licensee ) 2018 828 101 Amended (First of two; 181 Composition of department ) Repealed July 1, 2018 Composition of department (Second of two; 183 101 828 Added ) Operative July 1, 2018 213 144 Requirement of fingerprints for criminal 775 Amended record checks; Applicability 156 Contractual authority Amended 429 217 669 205 Professions and Vocations Fund Amended 224 (First of two; ) Operative until July 2, 2018 Professions and Vocations Fund (Second of Amended 205 669 226 two; Operative July 1, 2018) Division of Consumer Services; Chief 303 Repealed 429 , 561 230 [Repealed] Bond required where applicant or licensee 506 346 7071.17 Amended has unsatisfied final judgment for failure tractor, subcontractor, consumer, to pay con materials supplier, or employee; Notice of unsatisfied final judgments; Suspension for noncompliance; Reinstatement; Disqualification from serving as personnel of record for other licensee; Disciplinary action 7075.1 Nontransferability of license Amended 573 354 Amended 7099.2 Regulations for assessment of civil 375 308 penalties; Factors; Maximum amount; Letter of admonishment 7124.6 Public access to complaints against 396 308 Amended licensees; Disclaimer; Limitations of sure disclo

12 xii ERENCE BOOK CALIFORNIA CONTRACTO RS LICENSE LAW & REF Business & Professions Code Type of Chapter Section Affected Change Page Number Failure to resolve outstanding liabilities as 7145.5 Amended 573 413 grounds for refusal to renew license Development and availability of “solar 7169 Added 662 452 energy system disclosure document” tems 7170 Added Complaints regarding solar energy sys 662 454 companies and solar contractors Definitions Amended 670 462 7195 Unfair practices Amended 508 463 7197 Definitions Repealed January 7590.1 Amended 573 586 (First of two; ) 1, 2019 Definitions (Second of two; Operative Amen ded 7590.1 573 588 ) January 1, 2019 Inapplicability of certain provisions to 592 10133.1 Amended 475 and designated persons and organizations Repealed January 1, 2019) (First of two; Repealed 594 10133.1 Added 475 Inapplicability of certain provisions to designated persons and organizations Operative January 1, 2019) (Secon d of two; Civil Code Chapter Type of Number Change Page Section Affected Liability for errors or omissions Amended 1102.4 508 630 Contracts for design professional services; 2782.8 Amended 8 653 bility Limitations on indemnity; Applica 678 8119 Delivery of notices and claims for work on Added 44 common area within common interest development Government Code Type of Chapter Change Section Affected Number Page 4216 Amended 26 733 Definitions Delineation of area; Required notification Amended 736 4216.2 26 and response; Ticket prerequisites, period of validity, and expiration; Records; Special access sites Penalties for violation; Enforcement; 4216.6 741 Amended 2 6 Annual report of statewide information regarding incident events 4216.7 Liability of excavator; Liability of operator 743 26 ed A mend of subsurface installation; Savings Inoperative July 1, First of two; provisions ( 2020; Repealed January 1, 2021)

13 CALIFORNIA CONTRACTO RS LICENSE LAW & REF ERENCE BOOK xiii Government Code Type of Chapter Change Page Number Section Affected Liability of excavator; Liability of operator 744 4216.7 Added 26 llation; Savings of subsurface insta Second of two; Operative July provisions ( 1, 2020) 0 Continual excavation ticket in lieu of Amended 4216.1 26 746 notification and locate and field marking; Operator response; Notification and onsite meeting for area including or near high prio rity subsurface installation; Period of (Operative July 1, 2020) validity; Renewal Added 748 4216.11 Adoption of regulations establishing onsite 26 -upon plan meeting and mutually agreed minimum elements 4216.12 California Underground Facilities Safe 748 Amended 26 Excavation Board; Duties; Review 4216.13 Members of California Underground 748 Amended 26 Facilities Safe Excavation Board; Appointment and qualifications; Ex officio members 4216.1 8 751 Amended Development of standards for safety 26 ng around subsurface practices in excavati installations 9 Investigation of violations and reported 26 752 Amended 4216.1 incident events; Transmission of investigation results; Sanctions (Operative July 1, 2020) Timing of filing court action for damages to 753 26 ded men 4216.21 A bsurface installation based on specified su violations under investigation by board; Notification of board when certain actions Inoperative July 1, filed ( First of two; 2020; Repealed January 1, 2021) 4216.21 Timing of filing court action for dam ages to 753 26 Added subsurface installation based on specified violations under investigation by board; Notification of board when certain actions Operative July 1, Second of two; filed ( 2020) 4216.24 754 561 Amended Safe Energy Infrastructure and unds Excavation Fund; Use of f

14 xiv RS LICENSE LAW & REF ERENCE BOOK CALIFORNIA CONTRACTO Health and Safety Code Type of Chapter Section Affected Page Change Number Skilled and trained workforce required; 782 25536.7 Amended 608 Instruction and training; Apprenticeships; Applicability Filing requirement for owner o r operator 785 Added 608 25536.9 claiming exemption Labor Code Type of Chapter Change Section Affected Page Number 98.7 Investigation of employee complaint; Amended 28 , 460 808 Judicial relief Prohibition against employer reverifying 836 1019.2 492 Added of current employee employment eligibility at time or in manner not required by specified federal law; Penalty; Effect on compliance with MOU governing use of federal E -Verify system 610, 1720 Amended “Public works”; “Paid for in whole or in 616 839 part out of public funds”; Exclusions 1742.1 Liquidated damages Amended 28 844 1770 General prevailing wage rate; 845 Amended 28 Determination; Payment of more than prevailing rate; Overtime work 28 Registration required as qualification to 1771.1 846 Amended bid; Notice; Internet listing; Pe nalties State Public Works Enforcement Fund 1771.3 Amended 28 850 created; Uses; Loans 851 1771.4 Requirements for public works projects; 28 Amended Compliance 1773.3 Notice; Required information; Penalties Amended 28 860 28 1773.6 per diem wage rate Amended 864 Change in prevailing Employment of apprentices on public works Amended 553 874 1777.5 Added 926 4600.05 Immediate support from nurse case 736 manager for employees injured by act of domestic terrorism; Applicability; Regulations 4603.2 Notice to em ployer of physician’s name and 927 , 561 300 d Amende -network address; Objection to non physician; Reports by physician; Payment for medical treatment; Contest of itemization by employer; Interest or increase in compensation; Itemization review; Jurisdiction over disputes

15 CALIFORNIA CONTRACTO ERENCE BOOK RS LICENSE LAW & REF xv Labor Code Type of Chapter Number Page Section Affected Change Employers to establish utilization review 4610 Amended 240 936 process; Criteria; Administrative penalties enal Code P Type of Chapter Change Number Section Affected Page 830.3 1015 Amended Investigators, inspectors, and other 561 cies employees of specified agen Public Contract Code Chapter Type of Change Section Affected Number Page 4104 Listing of subcontractors in bid or offer Amended 28 1020 6701 Requirements for use of Construction Amended 20 1028 Manager/General Contractor method Appli cability to contracts entered into on 7201 1039 37 Amended or after January 1, 2012 relating to construction of public work of improvement; Retention proceeds withheld from payments; Limitations. (Repealed January 1, 2023) Payments upon contracts; Progress 10261 37 Amended 1044 p ayments; Substantially complex projects (First of two; will include a description Repealed January 1, 2023 ) 10261 Payments upon contracts; Progress 1045 37 Amended (Second of two; Operative payments ) January 1, 2023 Public Resources Code Type of Chapter Change Secti Number on Affected Page 25402.12 Plan to promote compliance with 1053 561 Amended regulations in the installation of central -conditioning and heat pumps air

16 xvi ERENCE BOOK CALIFORNIA CONTRACTO RS LICENSE LAW & REF Public Utilities Code Type of Chapter Section Affected Page Change Number Policy and intent to administer cost - Amended 1055 399.4 561 effective energy efficiency programs; Rebates or incentives for energy efficiency improvement or installation; Evaluation of investments; Review of policies governing energy efficiency programs 285 4.6 1057 Added Development of standardized inputs and 662 assumptions to be used in calculation and presentation of electricity utility bill savings Code Streets and Highways Chapter Type of Section Affected Number Change Page 484 Applicability of artic Added le 1067 5900 Applicability of chapter Added 484 1067 5901 Added 484 1067 Definitions 5902 Oral confirmation of copy of contract 1068 Added 484 5913 assessment documents and related information 484 5914 Adde d 1071 Waiver or deferral of first assessment payment not permitted Advertisement of assessment contracts or 1071 Added 5922 484 solicitation of property owners dded 1071 5923 A Cash payments or other thing of material 484 value in excess of actual price or as condition of entering into contract not permitted; Reimbursable expenses 5924 Tax deductibility of assessment contract Added 484 1072 5925 Disclosure of amount of PACE assessment Added 484 1072 funds or property equity not permitted Price differential for PACE assessment 1072 5926 484 Added financed project not permitted 5940 Conditions under which home 1073 484 Added improvement contract unenforceable; Consequences of violations; Waiver of right to cancel Reports; Availability of data on public 5954 Added 484 1074 agency Internet Web site

17 CALIFORNIA CONTRACTO RS LICENSE LAW & REF xvii ERENCE BOOK Unemployment Insurance Code Type of Chapter Change cted Number Section Affe Page Amended 329 Chairperson of Joint Enforcement Strike 1076 117 Force on Underground Economy; Duties of strike force; Membership of strike force; Reporting 1095 Purposes for which director must permit 1081 417 Amended use of information in his or her possession 1090 1095.5 Use of information by Mental Health 403 Added Services Oversight and Accountability Commission

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19 RS LICENSE LAW & REF CALIFORNIA CONTRACTO xix ERENCE BOOK CSLB HISTORY & BACKGROUND The Contractors State License Board (CSLB) was established in 1929 as the Contractors License Bureau under the Department of Professional and Vocational Standards. Today, CSLB is part of the Department of Consumer Affairs. A 15 -member board appoints CSLB’s executive officer, or Registrar of Contractors, and directs administrative policy fo r the board’s operations. CSLB’s Board includes nine public members (eight non -contractors and one local building official), five contractors, and one labor representative. The Governor makes 11 appointments and four are made by the Legislature. The Board holds regularly scheduled public meetings throughout the state. These meetings provide the public with an opportunity for input on agenda items and other issues. CSLB licenses and regulates contractors in 44 license truction industry. classifications that constitute the cons Currently, there are about 290,000 contractor licenses in the state. The Registrar oversees approximately 400 employees who work at the headquarters office in Sacramento and field offices throughout the state. and processes applications for new Headquarters staff receives contractor licenses, additional classifications, changes of license records, and license renewals. Staff also reviews and maintains records of disciplinary actions initiated by the field offices, provides verified certif icates of licensure used in court or other legal actions, and provides the status of licensure and other support services. Headquarters directs the activities of field offices, and initiates all disciplinary actions resulting from investigations. Field off ice staff investigates consumer complaints against contractors. The Statewide Investigative Fraud Team (SWIFT) addresses unlicensed activity.

20 xx CALIFORNIA CONTRACTO ERENCE BOOK RS LICENSE LAW & REF CSLB’s website, www.cslb.ca.gov or www.CheckTheLicenseFirst.com , provides the ability to look up a contractor by license number, name, or business name, and obtain the licensee’s contact information, license status, ype, CSLB legal actions (if any), classifications held, business t and bond and workers’ compensation insurance information. Home Improvement Salesperson registrations also are listed on the website’s license look -up page. Identical information is available through CSLB’s automated public information line, (800) 321- CSLB (2752), which operates 24 hours per day. Callers can determine if a contractor’s license is valid by entering the contractor license number. The information provided includes the licensee’s business name, type, and CSLB license status, classifications held, business disciplinary actions (if any). Also available is recorded information on licensing and examination procedures, complaint procedures and how to obtain information on a complaint that has been referred for legal action, the location and hours of CSLB offices, and current topics, such as recently passed laws or regulations. Callers also can order forms, applications, and other publications. CSLB offers a variety of publications and guides to help consumers make informed choices when contracting for home repairs and improvements. Speakers can be provided for groups interested in learning more about CSLB. Check the website for details or write to CSLB Public Affairs, P.O. Box 26000, Sacramento, CA 95826.

21 CALIFORNIA CONTRACTO ERENCE BOOK xxi RS LICENSE LAW & REF MISSION CSLB The Contractors State Licens e Board protects consumers by regulating the construction industry through policies that promote the health, safety, and general welfare of the public in matters relating to construction. The Contractors State L icense Board accomplish es this by: ● Ensuring that construction is performed in a safe, competent , and professional manner; ● Licensing contractors and enforcing licensing laws; ● Requiring licensure for any person practicing or offering to practice cons truction contracting ; ● Enforcing the laws, regulations, and standards governing construction contracting in a fair and uniform manner; ● Providing resolution to disputes that arise from construction activities; and ● Educating consumers so they can make informed choices.

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23 CALIFORNIA CONTRACTO ERENCE BOOK RS LICENSE LAW & REF xxiii RD OFFICES CONTRACTORS STATE LICENSE BOA HEADQUARTERS Street 9821 Business Park Drive Address Sacramento, CA 95827 Mailing P.O. Box 26000, Sacramento CA 95826 Address (800) 321 CSLB (2752) Phone - www.cslb.ca.gov or www.CheckTheLicenseFirst.com Internet Southern Region Northern Region 12501 East Imperial Hwy, Suite 600 9821 Business Park Drive Norwalk, CA 90650 Sacramento, CA 95827 Legal Action Disclosure (916) 255 -4041 Legal Action Disclosure (562) 345 -7656 Case Management (916) 255 Case Management (562) 345 -7656 -4027 SWIFT (Unlicensed Activity) SWIFT (Unlicensed Activity) 2924 (562) 345- 7600 (916) 255- Bakersfield Branch Office* Norwalk Intake & Mediation Center 5800 District Blvd., Suite 300 12501 East Imperial Hwy, Suite 620 Bakersfield, CA 93313 Norwalk, CA 90650 (80 CSLB (2752) 0) 321- (800) 321 -CSLB (2752) Fax (562) 466 -6064 Berkeley Investigative Center * Norwa lk Investigative Center 700 Heinz Avenue, Suite 300 12501 East Imperial Hwy, Suite 630 Berkeley, CA 94710 Norwalk, CA 90650 -CSLB (2752) (800) 321 -CSLB (2752) (800) 321 Fresno Investigative Center San Bernardino Investigative Center ive, Suite 206 1845 Business Center Dr 1277 East Alluvial, Suite 106 -3467 Fresno, CA 93720 San Bernardino, CA 92408 (800) 321 (800) 321 -CSLB (2752) -CSLB (2752) Sacramento Investigative Center San Diego Investigative Center P.O. Box 269115 9246 Lightwave Ave., Suite 130 Sacramento, CA 95826 -9115 San Diego, CA 92123 -CSLB (2752) (800) 321 (800) 321 -CSLB (2752) Valencia Investigative Center Sacramento Intake & Mediation Center P.O. Box 269116 28480 Avenue Stanford, Suite 120 -9116 Sacramento, CA 95826 Valencia, CA 91355 (800) 321 -CSLB (2752) (800) 321 -CSLB (2752) Fax (916) 255 -4449 Santa Rosa Branc h Office * West Covina Investigative Center 50 D Street, Room 400 100 N. Barranca St., Suite 300 Santa Rosa, CA 95404 West Covina, CA 91791 -CSLB (2752) (800) 321 (800) 321 -CSLB (2752) _____________ * Limited office hours

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25 CALIFORNIA CONTRACTO ERENCE BOOK xxv RS LICENSE LAW & REF TABLE OF CONTENTS Page ... v About this Book ... vii Summary of Major Changes to Contractor Law Sections Affected by 201 7 Legislation ... xi CS LB History and Background ... xix CSLB ... xxi Mission CSLB Offices ... xxiii Section I. The California Contractor License Chapter 1. Becomin g a California Licensed Contractor ... 1 General Requirements ... 1 Experience Requirements ... 4 License Classifications ... 6 13 Applying for a License ... Licensing Examinations ... 18 23 Issuing a License ... Financial Requirements ... 25 Chapter 2. Your Existing License: Maintaining ... 27 and Changing It ... 27 Bonds Judgments and Outstanding Liabilities ... 31 ... 34 Workers’ Compensation Insurance Coverage Liability Insurance Coverage for Limited Liability Companies ... 35 Adding a Classification to an Existing License ... 35 Changes in Personnel ... 36 Ch anges in Business Name or Address ... 39 Changes in Business Type ... 39 Frequently Asked Questions About New License Requirements ... 40

26 xxvi RS LICENSE LAW & REF ERENCE BOOK CALIFORNIA CONTRACTO Page 41 Inactivating and Reactivating a License ... Renewing Your License ... 43 45 Cancellation of a License ... Access to Licens ee Information ... 49 Chapter 3. Documents, Complaint Records, Available Fees ... 49 Information Regarding Individual License ... 49 Records Information Regarding Large Quantities of ... License Information 50 Information Regarding Pending Application Records ... 51 Information Rega rding Legal Action Against Contractors ... 51 Documents Available from CSLB ... 52 Enforcement Procedures: Complaints and Chapter 4. Citations 57 ... Complaints Against Licensed Contractors ... 57 Addressing Complaints Against Unlicensed ... 60 Contractors Section II. Home I mprovement Home Improvement ... 63 Chapter 5. Home Improvement Contractor ... 63 Home Improvement Contracts 63 ... Home Warranties ... 65 Home Improvement Salesperson Registration ... 65 Registrar -Approved Joint Control Agreements ... 67 Joint Control Addendum ... 69 71 Mechanics Lien Warning ...

27 CALIFORNIA CONTRACTO RS LICENSE LAW & REF xxvii ERENCE BOOK Section III. Business Management Page Chapter 6. Managing a Business ... 73 73 The Contractor Manager ... 74 ... Principles of Management Establishing Your Business ... 76 Financial Responsibility and Control ... 88 ... 100 Financial Management ... Debt 102 agement 103 Operations Man ... Legal Considerations and Remedies ... 108 ... 113 California Mechanics Liens and Stop Notices Glossary of Terms Associated with ... 120 Mechanics Liens Expert Advisors ... 124 Bidding on Government Contracts ... 124 Section IV. Construction Standards and Safety R egulations Safety and Health in Construction ... 127 Chapter 7. Responsible Agencies ... 127 ... 129 Construction Safety Legal Requirements ple Sites ... 130 Employer Work Multi ... 131 Injury and Illness Prevention Program (IIPP) Employee Complaint Rights and Protections ... 134 Injury and Illness Reporting and Recordkeeping ... 134 Requirements Permits ... 136 Variances ... 137 Investigations of Unsafe Conditions 137 ... Hazardous Substances ... 139 Carcinogen Control ... 142 Confined Spaces ... 146

28 xxviii CALIFORNIA CONTRACTO ERENCE BOOK RS LICENSE LAW & REF Page Excavations and Trenches ... 146 Information ... 147 How to Obtain Additional Chapter 8. Regional Notification Centers: Underground ... 151 Service Alert Preservation of Native American Remains ... 155 Chapter 9. Reporting Requirement ... 155 Penalties 156 ... Additional Information ... 156 Chapter 10. Construction of Wells ... 157 Licens ... 157 e Required for Water Wells Reporting Requirements ... 157 California Department of Water Resources Regional Offices ... 159 Well Standards ... 160 Section V. The Department of Consumer Affairs Chapter 11. Laws Governing the Department of Consumer Affairs ... 161 l Provisions ... 161 Genera ... 181 The Department ... 214 The Director of Consumer Affairs ... 223 Funds of the Department ... 229 Consumer Affairs Public Members ... 235 ... 237 Licensee Dispute Resolution Programs ... 240 Joint Committee on Boards, Commissions, and Consumer Protection 247 ... Review of Boards under the D epartment of Consumer Affairs ... 247 Denial, Suspension and Revocation of Licenses ... 249 General Provisions ... 250

29 CALIFORNIA CONTRACTO RS LICENSE LAW & REF xxix ERENCE BOOK Page 251 ... Denial of Licenses Suspension and Revocation of Licenses 255 ... Public Reprovals 267 ... 267 Examination Security ... Section VI. The Contractors State License Board; Lic ense Law, Rules and Regulations, and Related Laws Contractors ’ State Chapter 12. ... 269 License Law Contractors 279 ... ... Administration 279 Application of Chapter ... 290 ... 312 Exemptions Classifications ... 319 Licensing ... 325 Records ... 360 Arbitration ... 362 370 ... Disciplinary Proceedings Workers n Insurance Reports ... 398 ’ Compensatio ... 402 Revenue Construction Management Education The of 1991 ... 405 Sponsorship Act ... 410 Renewal of Licenses Home Improvement Business ... 414 Asbestos Consultants ... 454 ... 460 Prohibitions Home Inspectors ... 462 Home Energy Rating System (HERS) Home Inspections 465 ... Chapter 13. Contractors State License Board Rules and Regulations ... 467 List of Current Board Rules and Regulations ... 467

30 xxx RS LICENSE LAW & REF ERENCE BOOK CALIFORNIA CONTRACTO Page 470 CA Code of Regulations: Title 16. Division 8 ... Definitions ... 470 470 Revenue ... 471 ... Application for License Classification ... 477 ... 492 Examinations ... 493 Renewal of License ... 493 Bonds 507 ... Special Provisions ... 517 Disciplinary Guidelines ... Citation 556 Arbitration 561 ... History Notes for Current Board Rules and ... 562 Regulations History Notes for Repealed Board Rules and Regulations ... 575 Appendix 583 Extracts from Laws Related to CSLB ... 583 ... California Constitution Busine ss and Professions Code ... 583 ... 598 Civil Code ... 689 Code of Civil Procedure ... 722 Family Code ... Government Code 732 Health and Safety Code ... 768 Insurance Code ... 799 ... 802 Labor Code Penal Code ... 1007 Public Contract Code ... 1019 Public Resources Code ... 1051 Public Utilities Code ... 1055 Revenue and Taxation Code ... 1063

31 CALIFORNIA CONTRACTO xxxi RS LICENSE LAW & REF ERENCE BOOK Page Streets and Highways Code ... 1067 Unemployment Insurance Code ... 1076 Vehicle ... 1092 Code Water Code... 1097 Additional Resources ... 1101 Index ... 1111

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33 SECTION I. CONTRACTOR THE CALIFORNIA LICENSE Chapter 1. Becoming a California Licensed Contractor 2. Your Existing License: Maintaining and Changing It Access to Information About Licensees 3. 4. Enforcement Procedures: Complaints and Citations Chapter 1. Becoming a California Licensed Contractor GENERAL REQUIREMENTS 1. Who can become a licensed contractor? To qualify for a California contractor license, an individual must: Be at least 18 years old; • Have either a valid Social Security number (SSN) or • indi vidual taxpayer identification number (ITIN); and • Have the knowledge, experience, and skills to manage the daily activities of a construction business (including field supervision) or be represented by someone else with the ls who serves as the knowledge, experience, and skil qualifying individual, or “qualifier.” The qualifier must have had, within the past ten (10) years before filing the application, at least four (4) full years of experience as a in the journeyman, foreman, supervising employee, or contractor classification for which he or she is applying. The experience claimed on the application must be verifiable, and individuals with knowledge of that experience must certify the accuracy of the information provided to CSLB on the “Certification of W ork Experience” form. CSLB issues licenses to five types of business entities: 1. Sole Owner 2. Partnership 3. Corporation 4. Joint Venture 5. Limited Liability Company (LLC) 1

34 2 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA 2. Who is required to be licensed as a contractor ? All businesses or individuals who construct o r alter, or offer to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by CSLB if the total cost (including labor and material) of one or more contracts on the project is $500 or more. Contractors, including subcontractors, specialty contractors, and people engaged in the business of home improvement must be licensed before submitting bids. 3. Is anyone exempt from the requirement to have a license? contractor Yes. Her e are some of the exemptions: • Work on a project for which the combined value of all costs (labor and materials, whether purchased by the contractor or the consumer) is less than $500. A project cannot be divided get around the into smaller pieces or billed by the hour to $500 limit; • Government or other public personnel working on public projects; • Officers of a court acting within the scope of their office; • Public utilities working under specified conditions; essee; • Oil and gas operations performed by an owner or l Owner -builders who: • 1) build or improve structures on their own property if they either do the work themselves or use their own employees (paid in wages) to do the work (this exemption is only valid if the owner does not intend to offer the structure for sale within one (1) year of completion); 2) build or improve structures on their own property if they contract with a licensed contractor (this exemption applies to the construction of single -family residential structures only if no more than four (4) suc h structures are intended or offered for sale in any one (1) calendar year); or 3) improve their main residence or any item attached to the property, who have actually resided there for one (1) year prior to completion of the work, and who complete the work p rior to sale (this exemption is

35 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 3 limited to two (2) structures within a three (3) year period); A seller of installed carpets who holds a retail furniture • dealer’s license but who contracts with a licensed carpet installer for installation of the carpet; Security alarm company operators (licensed by the Bureau of • Security and Investigative Services) who install, maintain, monitor, sell, alter, or service alarm systems (fire alarm company operators must be licensed by CSLB); and, llite antenna systems on • Individuals who install sate residential structures or property (these installers must be registered with the Bureau of Electronic and Appliance Repair, Home Furnishings and Thermal Insulation). - 4. Do I have to reside in California to get and keep a CSLB issue d contractor license? No. 5. Does California recognize contractor licenses issued by other states or countries? No. You must meet all the minimum license requirements and apply for and be issued a license by CSLB in order to work as a contractor rnia. However, CSLB does have “reciprocity” agreements in Califo Under certain conditions the with Arizona, Nevada, and Utah. Registrar may waive the written trade exam for a contractor licensed from one of these states. Applicants still must qualify by taking and passing the CSLB law and business exam and undergo certification of relevant work experience. 6. What happens if I contract without a license? A contractor license is not necessary as long as you don’t advertise for work that requires a contractor license (jobs valued at $500 or more in combined labor and material costs) and state in any ad that you are not licensed. Contracting for work valued at $500 or more without a license can lead to misdemeanor charges. Unlicensed contractors face a first offense se ntence of up to six (6) months in jail and/or a $5,000 fine, and potential administrative fines of $200 to $15,000. Subsequent violations can result in increased criminal penalties and fines. In addition, you may face felony charges if you contract without a license when one is required in an area covered by a state of emergency or

36 4 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA disaster proclaimed by the Governor or the President. Felony convictions may result in a state prison term. CSLB thoroughly investigates consumer complaints filed against sed contractors and conducts undercover sting operations unlicen along with targeted inspections of active construction sites to curtail illegal contracting activities. These efforts are routinely publicized to ensure maximum consumer education. EXPERIENCE REQUIR EMENTS 7. What kind of experience is required for a California contractor license? -level experience in the past ten (10) At least four (4) years of journey years immediately preceding filing the application is required. Credit is given only for experience as a journeyperson, foreperson or supervising employee, or contractor. All experience claims must be verified by someone other than the applicant, such as an employer, fellow employee, other journeyman, contractor, union representative, building inspector, architect, engineer, business associate, or homeowner or client if the applicant is/was self -employed. The person who verifies your experience must have firsthand knowledge of that experience during the time period in question — that is, he or she must hav e observed the work you did and complete and sign under penalty of perjury the “Certification of Work Experience” form, which is included with the application. Be prepared to furnish documentation of any experience you claim on the form whenever it is requ ested; failure to do so will result in the return of your application as incomplete or denial of the license. 8. Are there educational requirements for a license? No. There are no specific educational or course requirements to get a California contractor license. CSLB does have study guides available at www.cslb.ca.gov (search: study guides). Many community colleges and private schools offer vocational instruction. For more information, contact: Chancellor’s Office California Community Colleges 1102 Q Street Sacramento, CA 95811 916- 445- 8752 www.cccco.edu

37 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 5 or Bureau for Private Postsecondary Education P.O. Box 980818 West Sacramento, CA 95798- 0818 6959 916- 431- 370- 7589 888- www.bppe.ca.gov : CSLB is not affiliated with any license preparation schools NOTE and cannot make recommendations regarding such schools. 9. May I substitute any education, technical training, or apprenticeship training for th e required experience? Yes. You may receive credit for technical training, completed apprenticeship training, or completed education. Provide written documentation, including copies of apprenticeship completion certificates and official technical school (m ust be accredited) or college transcripts. No credit is given for high school course work. All documents are reviewed on a case- by-case basis. Every applicant must demonstrate at least one (1) year practical journeyman -level experience. med services experience toward obtaining 10. Can I use my ar a contractor license? Yes. The Military Veterans Application Assistance Program helps In those transitioning from military service to civilian employment. the some cases, veterans have transferable skills that help meet minimum experience and training requirements to apply for a contractor license. This program offers expedited processing of veterans’ applications by specially trained staff, including the evaluation of transferable military experience and training, a s well as education. (Please provide a copy of your DD -214, Certificate of Release or Discharge from Active Duty, with your application.) If your documented experience and education are sufficient to meet the required four (4) years of applicable experienc e within the last 10 years, CSLB will approve you to take the appropriate licensing exam(s). If your experience and training meet only a portion of the requirements for licensure, CSLB will contact you directly and offer suggestions about how to fulfill an y incomplete requirements. If you are a veteran, submit the following with your license application:

38 6 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA • -214 (Certificate of Release or Discharge from Copy of DD Active Duty) • Copy of ERB (Enlisted Record Brief) • Copy of ORB (Officer Record Brief) Copy of DD -2586 (Verification of Military Experience and • Training) • Copy of Joint Service Transcripts (military transcripts) • Sealed, official educational transcripts of civilian education 11. Does CSLB offer assistance to military spouses/domestic partners? CSLB’s Milit ary Spouse/Domestic Partner Application Assistance Program expedites the processing of a contractor license applicant who meets both of the following requirements: 1) Submits satisfactory evidence that he or she is married to, in a domestic partnership with, or in another legal union with an active duty member of the U.S. armed forces who is assigned to a duty station in California under official active duty orders; and Holds a current and valid contractor license in another state, 2) district, or territory of th e U.S. in the classification or trade for which he or she seeks a license from CSLB. LICENSE CLASSIFICATIONS 12. What are the contractor license classifications? CSLB issues licenses to contract in particular trades or fields of construction. Each trade i s recognized as a “classification.” At least four (4) years of verifiable journey -level experience is required for each classification for which an application is submitted. CSLB issues licenses for the following classifications: • Class “A” — General Engin eering Contractor A General Engineering contractor’s principal contracting business is in connection with fixed works that require specialized engineering knowledge and skill. • Class “B” — General Building Contractor The principal business of a General Bu ilding contractor deals with any structure built, being built, or to be built, that requires as part of its construction the use of at least two (2)

39 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 7 unrelated building trades or crafts; however, framing or A carpentry projects may be performed without limita tion. “B” General Building contractor may take a contract for projects that involve one (1) trade only if the contractor holds the appropriate specialty license or subcontracts with an appropriately licensed specialty contractor to perform the work. • ss “C” — Specialty Contractor Cla There are 42 separate “C” license classifications for contractors whose construction work requires special skill and whose principal contracting business involves the use of are specialized building trades or crafts. Manufacturers considered contractors if engaged in onsite construction, alteration, or repair. 13. In what trades may I obtain a class “C” Specialty contractor license? You may obtain a license in any of the classifications listed below. Code Classification Asbe C - 22 stos Abatement - C - 4 Boiler, Hot Water Heating and Steam Fitting C - 21 Building Moving/Demolition Cabinet, Millwork and Finish Carpentry - 6 C Ceramic and Mosaic Tile C - 54 Concrete C - 8 Construction Zone Traffic Control - 31 C - 9 Drywall C d Paving C - 12 Earthwork an Electrical - 10 C Elevator C - 11 Fencing C - 13 Fire Protection - 16 C 15 - Flooring and Floor Covering C Framing and Rough Carpentry C - 5 General Manufactured Housing C - 47 Glazing C - 17 C - 2 Insulation and Acoustical

40 8 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA Classification Code C Landscaping - 27 - 35 and Plastering Lathing C C - Limited Specialty 61* - 28 Lock and Security Equipment C C - 7 Low Voltage Systems C - 29 Masonry Ornamental Metal - 23 C C 33 Painting and Decorating - - 32 Parking and Highway Improvement C C - 34 Pipeline Plumbing - 36 C 38 - Refrigeration C Roofing C - 39 Sanitation System C - 42 Sheet Metal - 43 C C 45 Sign - - 46 Solar C C - Reinforcing Steel 50 Structural Steel C - 51 C - 53 Swimming Pool Warm - Air Heating, Ventilating and Air - Conditioning C - 20 Water Conditioning - 55 C 60 - Welding C Well Dril C - 57 ling *A C- 61 Limited Specialty license is only allowed when the work performed does not fit within any other established classification. If the scope of works falls within either an already recognized primary (A-Engineering or B -General Building) or specialty classification, CSLB will assign that classification. Applicants for a C -61 Limited Specialty license must pass CSLB’s written law and business exam, but no trade exam is required. Following is a list of limited specialty classifications: D-03 - Awnings D-04 - Central Vacuum Systems

41 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 9 D-06 – Concrete -Related Services - Drilling, Blasting and Oil Field Work D-09 - Elevated Floors D-10 D-12 - Synthetic Products - Hardware, Locks and Safes D-16 D-21 - Machinery and Pumps - Metal Products D-24 - Doors, Gates and Activating Devices D-28 - Paperhanging D-29 D-30 - Pile Driving and Pressure Foundation Jacking - Pole Installation and Maintenance D-31 D-34 - Prefabricated Equipment D-35 - Pool and Spa Maintenance D-38 - Sand and Water Blasting D-39 - Scaffol ding D-40 - Service Station Equipment and Maintenance - Siding and Decking D-41 D-42 - Non -Electrical Sign Installation D-49 - Tree Service - Suspended Ceilings D-50 D-51 - Waterproofing and Weatherproofing (under relevant class) D-52 - Window Coverings D-53 - Wood Tanks D-56 - Trenching Only D-59 - Hydroseed Spraying D-62 - Air and Water Balancing D-63 - Construction Clean -up D-64 - Non -specialized** D-65 - Weatherization and Energy Conservation **The D -64 subcategory is only allowed if CSLB determines tha t the work performed is outside the scope of any already recognized classification.

42 10 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA 14. What contractor classifications are currently authorized by CSLB to perform solar energy projects? The CSLB classifications identified below are currently approved to perform solar projects. Any license classification not listed below does not have authorization to perform solar construction or installation. “A” – General Engineering contractors are authorized to perform ized engineering. active solar energy projects that require special General Building “B”– contractors are authorized to perform active solar energy projects in connection with a structure as defined by 7057, since an active solar Business & Professions Code section unrelated building trades or energy system constitutes the use of two section 7057* (832.62, Title 16, CCR). crafts, as required in BCP “C” Specialty Classifications C-4 – Boiler, Hot -Water Heating and Steam Fitting contractors are authorized to perform projects that include solar heating equipm ent associated with systems authorized by this classification. C-10 – Electrical contractors are authorized to perform any solar projects which generate, transmit, transform or utilize electrical energy in any form for any purpose. C-36 – Plumbing contract ors are authorized to perform any project using solar equipment to heat water or fluids to a suitable temperature. C-46 – Solar contractors install, modify, maintain, and repair thermal and photovoltaic solar energy systems. A licensee classified in this s ection shall not undertake or perform building or construction trades, crafts, or skills, except when required to install a thermal or photovoltaic solar energy system. (832.46, Title 16, CCR) C-53 contractors are authorized to include the – Swimming Pool installation of solar heating in swimming pool projects. C-61/D -35 – Pool and Spa Maintenance contractors are authorized to repair existing solar systems that heat pools. Check with your local utility company, the California Public Utilities Commission or the California Energy Commission about authorized contractor classifications and any certification(s) that may be necessary to participate in local, state or federal energy rebate programs.

43 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 11 * BPC §7057 General Building Contractor provides in part: pt as provided in this section, a general building contractor is (a) Exce a contractor whose principal contracting business is in connection with any structure built, being built, or to be built, for the support, shelter, and enclosure of persons, animals, chattels , or movable property of any kind, requiring in its construction the use of at least two unrelated building trades or crafts, or to do or superintend the whole or any part thereof. 15. Are there any special requirements for contractors who work with asbest os or other hazardous substances? Yes. Contractors who work with asbestos or other hazardous substances are regulated by the United States Department of Labor, Federal Occupational Safety and Health Administration, and the al Relations’ Division of California Department of Industri Occupational Safety and Health (DOSH), as well as by CSLB. These contractors are subject to a number of certification, registration, reporting, and safety requirements. CSLB issues a C -22 Asbestos Abatement license, as well as a separate Asbestos Certification. Those holding the certification may only perform abatement work within the classification for which they are licensed, whereas the C -22 licensee may contract for asbestos abatement with no limitations. To receive either a C -22 Asbestos Abatement license or an Asbestos Certification a contractor must: • -accredited asbestos abatement course; Take and pass an EPA ractor Registration Unit of • Register with the Asbestos Cont DOSH • SLB Submit an application and all required paperwork to C • Demonstrate four (4) years of journeyperson level experience • Pass the appropriate exam(s) Contractors who perform hazardous substance removal work must be certified by CSLB and: • Complete an “Application for Hazardous Substance Removal and Remedial Ac tions;” and • Pass a CSLB certification exam. Any contractor with an “A” General Engineering, “B” General Building, C -36 Plumbing, C -12 Earthwork and Paving, C -57 Well Drilling (Water) or, in some cases, the C -61/D -40 Limited

44 12 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA Specialty - Service Station Eq uipment and Maintenance license is eligible for the asbestos certification. In addition, contractors who install or remove underground storage tanks must hold the Hazardous Substance Removal certification. CSLB policy currently limits certified contractor s doing underground storage tank work as follows: “A” General Engineering contractors may install and/or • remove underground storage tanks for any purpose at any location. • “B” General Building contractors may, in the course of work performed under a contract that meets the requirements for see question 1 2 ), install and/or remove the “B” classification ( an underground storage tank if they have a Hazardous Substance Removal and Remedial Actions certification. • C-36 Plumbing contractors may install and/or remove any underground storage tank that provides service to a building, including storage tanks for service stations. 16. Are there any other requirements I need to complete? You must be fingerprinted and complete an asbestos open book Yes. issue a license. exam before CSLB can FINGERPRINTING – All applicants for licensure must submit a full set of fingerprints for a criminal background check. Fingerprints will be compared to California Department of Justice and Federal Bureau of Investigation records to determi ne if a criminal history exists. After submitting an application, CSLB will send each individual listed on the application instructions about the process for submitting fingerprints. For more information, visit CSLB’s www.cslb.ca.gov (search: fingerprint). ASBESTOS OPEN Before CSLB -BOOK EXAMINATION – will issue a license, every applicant must complete, sign, and return the open book exam contained in the booklet “Asbestos: A Contractor’s Guide and Open -Book Examinatio n.” The booklet contains general information about asbestos abatement standards. You will receive a copy of this booklet after passing your exam(s); copies are also available at www.clsb.ca.gov (search: asbestos open book) or by calling 800.321.CSLB (2752).

45 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 13 APPLYING FOR A LICENSE 17. How do I apply for a contractor license? You must complete the following steps: • Complete an “Application for Original Contractor License” on the CSLB website www.cslb.ca.gov (search: application). You can also download and print an application or request a paper copy at any Contractors State License Board office or by calling 800.321.CSLB (2752). • Take the time to carefully read and follow the general information and instructions included with the application. NOTE : You must submit certifications in support of work with the application No experience experience . certifications will be accepted by CSLB after the been reviewed and accepted . application has Complete and print out the easy -fill online application or • print out the application and fill it out using blue or black ink. Applications completed in pencil will be returned. Make sure to sign and date the application. • Proofread your application for any missing information. If the Board needs to return an incomplete application, your license may be delayed, or your application denied or considered abandoned if you do not complete it within 90 days of CSLB notifying you of the problem. : Applicants wi th a disability requ NOTE ing special testing est accommodations must complete and submit an “Accommodation Request for Examination” (form 13E -77) available at www.cslb.ca.gov . If you are required to take and pass one or bo th licensing exams you may apply for only one classification at a time. After CSLB issues your license, you may apply for any additional which you qualify. classifications for • Submit your application, the application processing fee of $330, and all requir ed application documents (do not submit any bonds or the initial license fee with your application) to: Contractors State License Board P.O. Box 26000 Sacramento, CA 95826 • After passing your exam, you will be notified about the process to submit the initia l license fee of $200, and the

46 14 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA documents required before CSLB can issue your license (bonds, proof of workers’ compensation insurance, etc.). of the required documents together to Please submit all license until you avoid delays. CSLB will not issue your meet all issuance requirements. you may submit an required to take an exam If you are not application for more than one classification at a time only if you meet the statutory requirements for a waiver. • ( $330 application Submit an application and $530 cessing fee and $200 initial license fee, in addition to pro the $75 for each additional classification) to: Contractors State License Board P.O. Box 26000 Sacramento, CA 95826 The following items are required before CSLB can issue an active license: • A contractor bond, or equivalent, in the business name of the applicant, and a bond of qualifying individual or exemption statement for each responsible managing officer or responsible managing employee, if appropriate (the bond of qualifying individual must be in the names of the qualifying individuals and the business). Learn more about bonds at www.cslb.ca.gov (search: bonds). Proof of workers’ compensation insurance or exemption (if • exemption you have no employees, you must submit an certificate). Learn more about workers’ compensation at www.cslb.ca.gov (search: workers’ compensation). NOTE: If the license is qualified by a responsible managing employee (RME), the qualifier is an employee. This means that workers’ compensation insurance is required to cover not be this employee and an exemption certificate should submitted. NOTE : All C -39 Roofing contractors must carry workers’ compensation insurance regardless of whether or not they have employees. 18. To whom does the term “qualifying individual” refer? A qualifying individual, or simply “qualifier,” is the person listed in CSLB records who meets the experience and exam requirements for the license. A qualifying individual is require d for every classification on each license CSLB issues.

47 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 15 19. What is the qualifying individual required to do? The qualifying individual for a license must take and pass all exams required for licensure, as well as undergo a criminal background check. Afte r the license is issued, the qualifying individual is responsible for exercising direct supervision and control of the employer’s (or principal’s) construction operations. 20. Who can be a qualifying individual? For a sole ownership license, either the own er or a • Responsible Managing Employee (RME) may serve as a qualifier. partnership license, the qualifier may either be one of • For a the general partners (who shall be designated as the qualifying partner) or an RME. For a corporate license, the qualifier may be either one of • the current officers listed in CSLB records for your license (who shall be designated as the responsible managing officer, or RMO) or an RME. • limited liability company license, the qualifier may For a , responsible managing be a responsible managing member , or RME. manager, RMO NOTE: If the qualifying individual is an RME, he or she must be a employee of the firm and may not be the qualifier on any bona fide other active CSLB license. This means that the RME must be ed by the firm and actively involved in the permanently employ operation of the contracting business for at least 32 hours per week or 80 percent of the total business operating hours per week, whichever is less. 21. Can the same person serve as the qualifier for more than one license? Yes. However, a person may act as a qualifying individual for more than one active license only if one of the following conditions exists: • There is common ownership of at least 20 percent of the equity of each firm for which he or she acts as t he qualifier; or • The additional firm is a subsidiary of, or a joint venture with, the first (the parent company must have a CSLB license); or • For partnerships, corporations, or LLCs, the majority of the partners or officers are the same for each firm.

48 16 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA Even if he or she meets one of the above conditions, a person may act as the qualifying individual for no more than three (3) firms in any one (1) year period. 22. Will CSLB acknowledge receipt of my application? ment, which will Yes. CSLB will send you a letter of acknowledg contain two important numbers: a nine (9) digit application fee number and a four (4) digit personal identification number (PIN), together with instructions on how to use these numbers to check the progress of your application. ation fee number, or “receipt number,” also will appear on Your applic Please keep a record of other documents related to your application. this number and use it in all inquiries regarding your pending application. 23. How long does it take to complete the license ap plication process? Because many factors affect the time it takes to process an application (type of application, workload, vacancies, etc.), processing times continually change. With your PIN and application fee number you can find out the application date CSLB is currently processing for your specific type of application. This information, which is available at www.cslb.ca.gov or by calling 1.800.321.CSLB (2752), is updated weekly and will give you a good idea of when your application will likely be processed. If no exam is required and you meet all license requirements, CSLB can issue a license shortly after the application is processed. If an exam is required, CSLB will give you an exam date after the application is processed and considered acceptable, which means no corrections or additional information are required. Please note: additional time is required to complete application processing after you pass the exam, and you must meet all license requirements SLB can issue a license. before C 24. How will I know if my application is accepted? After CSLB reviews and accepts your application, you will receive either a “Notice to Appear for Examination,” or, if the exam is waived, a request for documents and the initial li cense fee. A randomly selected percentage of applications undergo additional investigation of work experience claims and, even though you may take and pass the exams, CSLB will not issue the license until it approves the application and you meet all issuan ce requirements.

49 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 17 25. How can I check on the status of my application? CSLB will send a letter that it received your application, which will contain: • Instructions on how to make inquiries; • Your application fee number; and Your PIN. • To check the status of y our application, call 800.321.CSLB (2752), or . (search: application status) www.cslb.ca.gov visit 26. What happens if my application is not accepted? te. CSLB will return your application if it is insufficient or incomple You must provide any missing information, make any necessary corrections, and return your application to CSLB within 90 days from the date it was returned. If you do not return it to CSLB within 90 days, your application becomes void. A voided applicat ion cannot be reinstated; you will need to submit a new application and the appropriate processing fee if you wish to get a license. 27. If my application is not accepted, can CSLB refund my application fee? No. The $330 fee is for processing your applica tion, whether or not it is accepted. Since CSLB files each application for processing as soon as it arrives, CSLB cannot refund the fee. 28. How do I apply for a joint venture license? The joint venture contractor license is issued to two or more licensees (sole owners, partnerships, corporations, limited liability companies, or other joint ventures) whose California licenses are current and active. A joint venture license may be issued in any or all of the classifications in which the members of the joint venture are licensed. To apply for a joint venture contractor license, you must submit an “Application for Joint Venture Contractor License,” along with the appropriate application fee —$330 application processing fee and $200 initial license fee, and $75 for each additional classification. In addition, the following requirements must be met: • Each of the licensees participating in the joint venture must show the exact business name and license number as it appears in CSLB records;

50 18 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA • onnel listed in CSLB’s records for each One of the official pers participating licensee (the owner, a partner, or an officer of the corporation, but not a responsible managing employee) must sign the application; • The qualifier for the entity holding the classification applied must sign the application; for • Provide a contractor bond in the amount of $15,000, or cash equivalent. The bond or cash deposit must bear the same business name as the pending joint venture; and Provide a certificate of workers’ compensation insurance • or exemption. coverage No examination or fingerprinting is required for a joint venture license. 29. When does a joint venture license expire? An active joint venture license expires two (2) years from the last day of the month in which the license was issued. Ea ch license included in the joint venture must be current and active before the joint venture license can be renewed as active. 30. What is cause for suspension of a joint venture license? CSLB must suspend the joint venture license if any of the member licenses is no longer active or is suspended for any reason. 31. Will a criminal conviction prevent someone from obtaining a contractor license or serving as a qualifying individual? Not necessarily. CSLB applications and other forms do include questions reg arding criminal convictions and failure to disclose the requested information may, in and of itself, be grounds for CSLB to deny the license application. CSLB may also deny a license application if the criminal conviction is substantially related to the du ties, functions, and qualifications of a contractor. However, even under such circumstances, CSLB may issue a license if the individual has demonstrated sufficient rehabilitation. LICENSING EXAMINATIONS 32. Is there an examination requirement for a contra ctor license? Yes. The qualifying individual for a contractor license must pass both the written law and business exam, and a specific trade exam in

51 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 19 order to get a contractor license. No trade exam is required for the C - 61 Limited Specialty license. Accom modation Request for Examination In compliance with the Americans with Disabilities Act (ADA), CSLB provides “accommodation” for applicants with disabilities that may affect their ability to take required exams. It is the applicant’s ify CSLB about any alternative arrangements responsibility to not you may need; CSLB is not required by the ADA to provide accommodation if it is unaware of specific needs. To request accommodation, submit the “Special Accommodation Request for Examination,” available on the fo rms and application page at www.cslb.ca.gov or in any CSLB office. 33. Under what circumstances can an exam waiver be granted? The Registrar may waive the trade exam requirement if the qualifying individual meets one of the following conditions: • The person is currently the qualifying individual for a license in good standing in the same classification for which he or she is applying; or • The person has been a qualifying individual within the past five (5) years for a license in good standing in the same classification for which he or she is applying; or • Within the last five (5) years, the person has passed both the law and business exam and the trade exam in the same classification for which he or she is applying. • Other waiver provisions defined in Business and Professions code section 7065.1, 7065.2, and 7065.3 may also be granted. 34. If I think I am eligible for a waiver of the exam, do I need to complete the experience section of the application? Yes. Even if you thin k you are eligible for an exam waiver, you must complete the experience section of the application to document a minimum of four (4) years out of the previous ten (10) years of journey -level experience. Someone other than the applicant must verify all experience claims, such as an employer, fellow employee, other journeyman, contractor, union representative, building inspector, architect, or engineer. This person must have firsthand knowledge of your experience; that is, he or she must have observed the work that you did.

52 20 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA 35. How will I find out if I need to take the examination? If you do not qualify for an exam waiver, CSLB will send you a “Notice to Appear for Examination.” 36. How soon after submitting my application will I receive for Examination?” my “Notice to Appear CSLB schedules exams after your application is processed and found Many factors can affect the time it may take to process an acceptable. Please refer to your acknowledgement letter for application. pplication status. instructions about how to check your a You should receive your exam notice at least three (3) weeks prior to the exam date. : A randomly selected percentage of applications undergo NOTE additional investigation of work experience claims and, even though you may take and pass t he exams, CSLB will not issue the license until it approves the application and you meet all issuance requirements. 37. Where can I take the exam? CSLB test centers are open Monday through Friday and located throughout California: Berkeley, Fresno, Norwalk , Oxnard, Sacramento, San Bernardino, San Diego, and San Jose. CSLB uses zip codes to assign applicants to the test center nearest to their business address. The “Notice to Appear for Examination” letter sent to each applicant and travel directions, and what identifies the exam location identification is required. NOTE: If you have difficulty understanding or reading English, CSLB may allow you to use a translator to read the exam for you. CSLB must approve in advance the translator you choose. d like If you woul to use a translator, please check the appropriate box on the application form and CSLB will send you additional information. 38. What are the major components of the examination? The exam process consists of two parts: 1) all qualifying individuals must pass the standard law and business exam; and 2) all qualifying individuals must pass a specific trade or certification exam in the classification in which they are applying. No trade exam is required for the C -61 Limited Specialty classification.

53 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 21 39. What does the law and business examination cover? -choice questions The law and business exam consists of multiple related to business management and California construction law. 40. How can I prepare for the law and business examination? Use this book as a reference guide, copies may also be accessed at (search: California Contractors License Law & www.cslb.ca.gov . Reference Book) You also can find information about the exam topics in the “Study Guide for the Law and that CSLB Business Examination” pamphlet sends to applicants along with the “Notice to Appear for Examination.” This material is also available by calling CSLB at a.gov 800.321.CSLB (2752) or via the CSLB website www.cslb.c (search: study guides). 41. What does the trade examination cover? Exams are developed with the assistance of licensed contractors and most include questions that refer to accompanying booklets containing blueprints and/or drawings. d every five - Exams are update to-seven years. 42. How can I prepare for my trade or certification examination? CSLB will send a study guide for each exam with your “Notice to Appear for Examination.” This information is also available on CSLB’s website. The study guide lis ts the topic areas covered by the exam, includes sample questions, shows how each content area is weighted, and, in most cases, recommends resource materials to study. 43. What are the exams like? All exams are taken on a computer and consist of multiple -choice questions. You will be informed at the test site about the percentage of correct answers needed to pass each exam. 44. What should I bring to the examination site? For admission to the test center bring: 1) the “Notice to Appear for Examination” let ter from CSLB; and 2) a government -issued picture identification (such as a current, valid driver license, Department of Motor Vehicles identification card, or military identification card).

54 22 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA 45. How long does the examination take? rs to complete each exam. Arriving late to a You will be given 3- ½ hou test center may reduce the time available to take your examination. 46. What is involved with computer -based testing? -to-use computer -based system You will take your exam on an easy that guides you through an o n-screen tutorial about how to use the touchscreen prior to the test. (A computer mouse also is available, if desired.) 47. What kind of feedback will I receive? You will receive your test results before you leave the test center. told only that they have passed the exam, Successful candidates are but are not given detailed information about their score. Unsuccessful candidates receive a statement showing how well they performed on each section of the exam. These sections are described in greater detail in the study guide for that particular exam so you will know what areas to review when preparing to retake the exam. 48. If I fail to appear for an examination or fail to pass the law and business examination and/or a trade examination, may I ination(s)? retake the exam Yes. If you fail to appear for an examination, you must pay a $60 rescheduling fee. You may reschedule the exam as many times as you need to within 18 months, as long as you pay the rescheduling fee After 18 months, your application will be considered void, each time. and you will have to submit a new application with new fees. Your examination may be rescheduled one time without a fee if you provide documented evidence that the failure to appear was due to a medical emergency or other circumsta nce beyond your control. If you fail the law and business exam and/or your trade exam, you also must pay a $60 fee each time you reschedule. You have 18 months, after CSLB accepts your application, in which to pass the hin those 18 months, your examinations. If you do not pass wit application is considered void and you will have to submit a new application with new fees. The void date on an application may be extended up to 90 days if you provide documented evidence that the failure to complete the applicat ion process was due to a medical emergency or other circumstance beyond your control. To reschedule an exam, complete the information requested on the bottom of the exam failure notice and submit it to CSLB, with the $60 fee. (Please identify any address c hanges on this form.) Once CSLB

55 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 23 receives your rescheduling fee staff will send you a notice to appear for your next exam. Exam results are good for five (5) years. If you pass either the trade exam or the law and business examination but fail the other, y ou failed, as long as you retake and pass need only retake the exam you it within five (5) years. 49. May I review the test questions after the examinations? No. Test questions and answers are not available for review after the exam has been scored. However, you may type a comment about a question during the exam at any time before it is scored. You also may ask for a “Request for Examination Appeal” form after your Once CSLB staff review your appeal exam and mail or fax it to CSLB. e a letter informing you of the outcome. request, you will receiv 50. Are there any penalties for disclosing the contents of a state examination? Yes. Conduct that violates exam security includes providing information about test questions to any school, person, or business other than CSLB examination staff; removing exam materials from the test site (including taking notes or recording anything electronically); communicating with other examinees during an exam; copying or permitting your answers to be copied; having in your posses sion any written material other than test materials provided by CSLB; or taking the exam on behalf of another applicant. Penalties for violating exam security include prosecution on misdemeanor charges that can result in a fine of $500, payment of of up to $10,000, plus the costs of litigation, and a county damages jail sentence. You also would be subject to automatic exam failure. Any fee(s) paid to the state of California would not be refunded; and, you would not be allowed to apply for any CSLB license c lassification for a period of one (1) year from your examination date. ISSUING A LICENSE 51. What will I receive to show that I’m licensed? CSLB will send you a wall certificate that shows the name of the person or company on the license, the license numb er, classification, date of issue, and expiration date; and a plastic pocket license card showing the same information. State law requires that you display the wall certificate in your main office or chief place of business and provide proof that you have a contractor license on demand. You also should carry your pocket

56 24 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA license card with you, especially in situations where you may solicit business or talk to potential customers. CSLB’s educational materials encourage consumers to ask to see a contractor’s pocket license card. 52. How long does it take to receive my license documents? You should receive your wall certificate and pocket license card within approximately 5- 10 business days from the time CSLB issues your license. d? 53. How long is a license vali A contractor license is initially issued, whether active or inactive, for a two (2) year period. It will expire two (2) years from the last day of the month in which it was issued. Licenses are renewed for two (2) years if renewed on active status, or f or four (4) years if renewed on inactive status. 54. To whom is a license issued? CSLB issues licenses to individuals (sole ownership), partnerships, corporations, joint ventures , or limited liability companies (LLC). The license belongs to the owner of a n individual license, to the partnership, to the corporation or LLC as it is registered with the California Secretary of State, or to the combination of licensees who are party to the joint venture. ive 55. What is the difference between an active and an inact license? Active License: The holder of an active license can contract for work in the classification(s) that appear on the license. While the license is active, the licensee must maintain a current contractor bond, a bond equired), and workers’ compensation of qualifying individual (if r insurance, if employees are hired. All active C -39 roofing contractors must have a certificate of workers’ compensation insurance on file with CSLB. An active LLC license has additional requirements – a $100,000 liabilit y insurance policy and an LLC workers’ bond. Inactive License: With an inactive license (currently renewed but on inactive status) the holder may not bid or contract for work. For an inactive license, neither the contractor bond nor the bond of qualifying individual is required. Also, the licensee does not need to have either workers’ compensation or proof of exemption from workers’ compensation insurance coverage on file with CSLB when the license is inactive .

57 CHAPTER 1. BECOMING A CALIFORNIA LICENSE D CONTRACTOR 25 FINANCIAL REQUIREMENTS 56. Are there any bon d requirements for a contractor license? Yes. You must file a $15,000 contractor license surety bond or cash deposit with CSLB. In addition, you must submit a separate $12,500 bond of qualifying individual or cash deposit for the responsible yee or responsible managing officer, if applicable. managing emplo However, a bond of qualifying individual is not required if the RMO certifies that he or she owns 10 percent or more of the voting stock or equity of the corporation for which he or she serves as the qual ifying individual. If you have a limited liability company (LLC) license, whether the license is issued as active or inactive, you must file a separate $100,000 surety bond (in addition to the $15,000 contractor bond) for the benefit of any employee or worker damaged by the LLC’s failure to pay wages, interest on wages, or fringe benefits, as well as other contributions. 57. Where do I obtain bonds? You may purchase bonds from your insurance agent or from one of the private holding companies licensed by t he California Department of Insurance. CSLB does not issue bonds. Copies of the approved bond form and information regarding cash alternatives to bonds are available at www.clsb.ca.gov (search: bonds) or by calling 1.800.321.CSLB (2752). 58. What is the total fee amount to obtain a contractor license? Fees are subject to change. Current fees are printed on the application forms and notices that CSLB sends you. You may also check www.cslb.ca.gov (search: fees) or call CSLB (1.800.321.2752) to verify the current fees. As of this printing, the total fee amount to obtain a contractor license for one classification is $530. This includes both the nonrefundable application processing fe e of $330 and the two -year initial license fee of $200. 59. Do I need to be concerned about workers’ compensation insurance? Yes. All contractors are required to present proof to CSLB of workers’ compensation insurance coverage, a certificate of self -insur ance issued by the Department of Industrial Relations, or an exemption from that requirement, in order to get a license, maintain an active license, or activate an inactive license. Contractors who do not have employees working for them (except C -39 Roofin g licensees) are

58 26 CALIFORNIA CONTRACTOR LICENSE SECTION I. THE exempt from the requirement for workers’ compensation insurance, but must file a certification of this exemption with CSLB. If the license is qualified by a responsible managing employee (RME), CSLB will not accept an exemption certificate because the RME is an employee. Neither proof of coverage nor an exemption is required for an inactive license (see question 5 5).

59 Chapter 2. Your Existing License: Maintaining and Changing It BONDS Contractors are required to maintain a surety bond for the benefit of consumers who may be damaged as a result of defective construction or other license law violations it of employees who , and for the benef have not been paid wages due them . Contractor Bond and Bond of Qualifying Individual The contractor bond is executed by a surety in favor of the State of California for the benefit of specific categories of people damaged if a contracto r violates contractors ’ state license l aw. The list of beneficiaries can be found in Business and Professions (B&P) Code section 7071.5. Before an active contractor license can be issued or renewed, or an inactive license made active, the licensee must hav e a current contractor bond, or an approved alternative to the bond (see below), bond on file with CSLB. The c ontractor required is $15 ,000 for all classifications. qualifying a $12 ,500 bond , or an In addition, a individual must have approved alternative t o the bond, on file for each responsible e (RME). A $12 managing employe Bond of Q ualifying Individual ,500 must be on file with CSLB for each responsible managing officer (RMO) unless the RMO owns 10 percent or more of the voting stock of the corporation , and for each responsible managing member or officer, unless he or she owns 10 percent or more of the membership (LLC) . interest in the limited liability company If the license is inactive, neither the contractor bond nor the Bond of Qualifying Individual is needed. Limited Liability Surety Bond A $100,000 surety bond (in addition to the $15 ,000 contractor bond) is required for the issuance, reissuance, reinstatement, reac tivation, or renewal of a limited liability company license for the benefit of any empl oyee or worker damaged by the LLC ’s failure to pay wages, interest on wages, or fringe benefits, as well as other contributions (See B&P Code §7071.6.5.) (not required for inactive LLC licenses). 27

60 28 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE Disciplinary Bonds revoked for a violation of c ’ state If a firm ontractors ’s license has been license law, the firm must file a disciplinary bond with the Registrar if the license is to be reinstated or reissued , or if the firm seeks to B&P Code have a new license issued. (See §7071.8.) ct to the following requirements: Disciplinary bonds are subje ● The disciplinary bond must be filed in addition to, and cannot take the place of or be combined with, any other bonds required license; to maintain an active contractor ● The Registrar determines the bond amount, which is based on the seriousness of the violations. The amount may not be less than $15,000 nor greater than 10 s the amount of the time bond (See B&P Code §7071.8 contractor ); . ● The disciplinary bond must remain current and on file with the Registrar for at least two (2) years. In some cases , the Registrar may require a longer filing period; and ● The firm ’s license must remain active and current while the disciplinary bond is on file. ved Alternatives to Contractor Bonds Appro Instead of filing a surety bond with CSLB, a contractor may prefer to use one of the following approved alternatives for filing a security deposit (see Code of Civil Procedures § 995.710. ). NOTE: All alternativ for three es to bonds are retained by CSLB (3) If years after the end of the license period that they cover. oard is notified of a complaint relative to a claim against the the b deposit, the deposit shall not be released until the complaint has been adjudicated. NOTE: It is the contractor’ s responsibility to make sure the alternative in lieu of a required bon d is timely requirements. and meets CSLB Failure to have a required bond or an alternative on file may result in license suspension and a gap in licensure. Certificate of Deposit For CSLB to accept certificates of d eposit in lieu of a contractor bond, the certificate must meet the following requirements : ● It must be issued by a bank or savings and loan association doing business in California; ● It must show the business name of the applicant or the licensee;

61 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 29 INING AND CHANGING I It must be payable to the Contractors State License Board; ● It must be issued for a period of at least one (1) year and be ● automatically renewable at each maturity date; It must state that the interest earned will be paid to the ● depositor; and It must not designate the payee as a “trustee.” ● Bank Savings Account, Savings and Loan Investment ificate or Share Account, Credit Union Certificate for Cert Funds or Share Account ’s responsibility to make sure the assignment of It is the contractor all of the following these accounts or certificates meets requirements: ● The account/certificate information must be properly filled out on forms approved by the Registrar and available from CSLB; ● The passbook or certificate must show the business name of the applicant or licensee; ● The passbook or the certificate must be assigned to CSLB; and ● The passboo k or the certi ficate must be delivered to the Registrar with the assignment form . Deposit Option Cash A licensee may choose to make a cash deposit with CSLB instead of filing a bond. The cash deposit must be in the form of a cashier ’s -certi fied check made payable to the Contractors check or a bank ’s check must show the name of the State License Board. A cashier purchaser a nd must be deposited with CSLB. Bearer Bonds Bearer bonds must: ● Be issued by the U.S. Government or the State of California; ● Be delivered to a bank in Sacramento, California, and have a market value equal to or greater than the amounts prescribed in B&P Code s ections 7071.6 and 7071.9, or as fixed by the Registrar, as provided for in B&P Code § 7071.8 (also see California Code of Regulations (CCR ) §856. ) ; and ● The bank, as agent for the applicant or licensee, will, on order of the Registrar, deliver the bonds to the Treasurer of the State of California. Under no cir cumstances are bearer bonds to be delivered to CSLB or the Registrar.

62 30 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE General Requirements for Bonds and Bond Alternatives The following requirements must be met before CSLB can accept your bond (or a bond alternative): Bonds are not transferable —they ca nnot be transferred from ● one license to another or from one qualifying individual to another; ● The business name and the license number on the bond must correspond e xactly to the information in CSLB’s records ; ● ing individual must The license number on the bond of a qualify match that of the firm for whom the individual is to serve as the qualifying individual; Contr actor bonds must be in the correct amount of $1 5,000; ● A bond of qualifying individual mus t be in the correct amount ● of $12,500; ● The bond must have the signature of the attorney -in-fact; and ● Bonds must be filed with CSLB within 90 days of the effective date of the bond. If you are submitting a bond alternative and the bond alternative is returned for correction, take it and the letter of correction to the issuing entity fo r correction . Return the corrected document to CSLB as soon as possible. The Registrar may reinstate your license following a suspension for ed bond (or bond alternative). However, t he failing to have a requir suspension m ay resul t in a gap in licensure . Maintaining Bonds The following guidelines will help you avoid problems with the bonds filed for your license: ● Keep your required bonds, cash deposits, or bond exemptions current at all times; ● Renew your bonds promptly. To avoid a period of suspension, make sure that the effective date of the new bond is the same as the cancellation date of the old bond. To allow for processing time, arrange for a new bond four (4) weeks before your old one expires; ● Only one bond is in effect at a time. A second bond filed for the same period cancels out the first bond;

63 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 31 INING AND CHANGING I CSLB does not return any bond that has been accepted or ● processed for an active license; and ● Keep accurate records on your agent, surety company, bond s). numbers, effective dates , and terms of the bond( Suspensions CSLB will suspend y our license if any of the following bond- related conditions occur: Your surety company cancels one or more of your required ● bonds; The voting stock of the responsible managing officer (RMO) for ● a corporate license or the membership interest in a limited liability license is no longer at least 10 percent of the total ock of the corporation. (See B&P Code §7071.9. ) voting st Suspension is effective from the date ownership or membership interest terminated unless a bond of q ualifying individual is filed , backdated to the date his or her percentage of the stock or membership intere st fell below 10 percent ; ● A judgment or payment of claim reduces the amount of any ( B&P Code §7071.11. ) ; required bond See You fail to maintain a disciplinary bond or cash deposit in full ● d effect for the required length of time. force an A suspended license can be reinstated i f the surety company sends a “Rescission of Cancellation N otice” to CSLB , or if you obtain a new bond and submit it to CSLB within 90 days of the date that the new bond becomes effective, or within 90 days of the date the old bond is canceled. JUDGMENTS AND OUTSTANDING LIABILITIES Civil Court Judgments A contractor is required to report a construction -related civil court judgment to CSLB within 90 days of the judgment date. When CSLB receives a copy of the judgment, the informatio n is entered on the contractor license record and a notice is sent to the contractor. The notice gives the contractor 90 days from the date of the notice to resolve the judgment. After 90 days, if the unsatisfied final judgment is not resolved, the contractor license is automatically suspended and remains suspended until the judgment is resolved. If the contractor fails to report the judgment within 90 days, then when the judgment is r eported, his or her contractor license is

64 32 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE suspended immediately. The license remains suspended until the judgment is resolved. NOTE -related judgment against a : Anyone can report a construction contractor by sending a copy of the judgment to the CSLB Judgment office. In fact, most of the Unit at the Sacramento headquarters judgments received by CSLB are sent by the person to whom the contractor owes money. Once a n unsatisfied final judgment is entered on a contractor ’s can affect any other license that a person is on or license record, it any license for which he or she may apply. For example, suppose a contractor has a sole ownership license and a corporation license. If the judgment is against the corporation, then the suspension for failure to resolve the judgment will also suspend the sole ownership license. In addition, any other licenses for the qua lifying individual or the personnel of record of the license subject to the suspension shall also be suspended, if those individuals were associated with the license subject to the final judgment at the time of the activities on which the judgment is based. These requirements are in B&P Code § 7071.17 (see Chapter 12 .). According to that section, a private arbitration decision is considered the same as a judgment. Frequently Asked Questions About Judgments : ified of this suit or judg —what I was never served or not ment can I do? The judgment wasn ’t fair, the judge wouldn ’t listen —what can I do? to me the suit or judgment was pr operly served, or was fair , is for Whether the court to decide. CSLB cannot override a decision made by the court in a civil judgment. I f you believe you were not proper ly served or treated fairly, consult an attorney. With a s mall claims judgment, you can speak with staff from the s claims court in which the mall judgment was filed. Can I appeal the court decision? There are many factors t hat determine when and why an appeal can be filed, so you should consult an attorney. In the case of a s mall claims judgment, you can speak with staff from the s mall claims court in which the judgment was filed.

65 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 33 INING AND CHANGING I Why are you suspending my license? I filed an appeal. Before appeal information can be entered on your license, you must -endorsed appeal with proof of a Stay of submit a copy of the court document . Enforcement I paid the What type of proof do you need to show that judgment? Any of the following can be used as proof of payment: An a cknowledgm ent of Satisfaction of Judgment ● ; ● A notarized , signed statement from the judgment creditor udgment has been paid in full which confirms the j ; or A copy of the front and back of a canceled payment check. ● edit CSLB will contact the judgment cr or to verify payment, so include that person’s tele phone number. If you cannot contact the person who holds the judgment, consult an attorney. In the case of a s mall claims judgment, you can speak with staff from the s mall claims court in which the judgment was filed. ’t pay the full amount of the judgment. Can I make I can payments? You can make payments only if you work out an agreement with the judgment creditor. The judgment creditor is not required to accept payments. If you reach an agreement, it s hould state the amount owed, the monthly payment amount, the date the payment is due each month , and when a payment will be considered late. All parties must sign the agreement. Once you have a written agreement, submit ’s Judgment Unit. When the copy is received at CSLB, a copy to CSLB the suspensi on will be lifted. If CSLB is notified by the judgment creditor that you failed to make payments, however, your license will be suspended immediately. I filed for bankruptcy. What happens now? You must provide CSL B with proof of the bankruptcy filing and confirm that you named the judgment creditor in the bankruptcy. To comply with this requirement, submit a copy of the bankruptcy filing, which must include the page from the creditors list on which the judgment cre ditor appears. This judgment isn’ t construction- related. What can I do? The applicable section of law ( B&P Code §7071.17) states that the judgment must be “substantially related ... to the qualifications, functions , or duties of the license.” CSLB broadly in terprets this section of law to mean that if the judgment relates to your

66 34 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE construction business in any way, it is considered construction - related. It does not mean that you had to necessarily contract with the judgment creditor to build something. If you did not pay your office rent, your office utility bills, your material supplier, employee, or any other bill incurred by your business, subcontractor, CSLB will consider it construction -related. Very few judgments received by CSLB are not construction -relat ed. If you feel confident your judgment is not construction -related, you should provide that CSLB with documentation that will support your statement. Outstanding Liabilities state Board of Equalization, Employment Development The Industrial Relations Department, Department of , or Franchise Tax Board can notify CSLB of outstanding final liabilities owed by a contractor to those departments. When CSLB receives such a notification, a letter is sent to the contractor notifying him or her that y ha ve 60 days in which to resolve the outstanding liability or the the If CSLB has not received any information license will be suspended. about a resolution at the end of the 60 -day period , the license will be suspended until the outstanding liability is resolved. The sam e procedure will be followed if a check submitted to CSLB by a licensee is dishonored. These requirements are in B&P Code § 7145.5. (See Chapter 12.) Do not wait until the last few days before the suspension NOTE: s often difficult to gather all occurs to try to resolve the judgment. It i necessary paperwork at the last minute. Preventing your license from ended is a top priority with CSLB ; however , sometimes being susp problems arise that cannot be immediately resolved. To avoid delay, promptly submit all nec essary documents to the attention of the CSLB Judgment Unit . Once acceptable documentation has been received and the matter has been cleared, CSLB will send you a confirmation notice . WORKERS ’ COMPENSATION INSURANCE COVERAGE General Requirements All contractors are required to submit proof of w orkers ’ compensation insurance coverage as a condition of licen sure to maintain a license, activate an inactive license, or renew a license, unless they are exempt from this requirement. (See B&P Code § 7125.1.) Exempt ions Contractors who do not have employees working for them (except C-39 Roofing licensees) are exempt from the requirement for w orkers ’

67 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 35 INING AND CHANGING I compensation file a certification of this insurance, but the y must rage nor the exemption with the Registrar. Neither insurance cove exemption is required for an inactive license. sification are required NOTE: All contractors with a C -39 Roofing clas to have a Certificate of Workers’ Compensation Insurance or a Certificate of Self- Insurance on file with CSLB (B&P Code sectio n . 7125) FOR LIABILITY INSURANCE COVERAGE LIMITED LIABILITY COMPANIES Liability insurance is required for limited liability companies (LLCs) with the aggregate limit of $1 million required for licensees with five s of the personnel of record; an or fewer persons listed as member additional $100,000 is required for each additional member of the onnel of record, not to exceed $5 million total. ( See B&P Code pers §7071.19.) ADDING A CLASSIFICATION TO AN EXISTING LICENSE Under what conditions may I add a classif ication to my license? You may add a classification to your existing license only if the license is renewed and current. How many classifications may I apply for at a time? In most cases, you must file a separate “ Application for Additional Classification ” for each classification you are requesting. However, all of the C -61 (Limited Specialty) classifications you request may be applied for on one application. What are the requirements for adding a classification to my license? To add a classification to you r license, you must do the following: ● Select a qualifying individual (who may be the licensee) for the new classification you are applying for; ● Have the qualifying individual describe , in detail, four (4) years of experience within the last ten (10) years as a journeyperson, foreperson , su pervisor, or contractor in the classification in which he or she is to serve as the qualifying individual; ● Provide verification for the claimed experience;

68 36 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE Submit the required application processing fee with the ● application; ● xam for the new classification, unless Take and pass the trade e the qualifier meets the criteria for and is granted a waiver (see below). Each qualifying individual also must pass the CSLB law and business examination if he or she has not done so previously; File any required bo nds; and ● ● Inactivate his or her individual license, if the qualifying . individual is an RME Under what conditions can I qualify for a waiver of an examination? See Questions 33 and 34 in Chapter 1. ● : Requesting an exam waiver does not mean you will be NOTE automatically granted one . The Registrar has c omplete discretion regarding exam waiver s. CHANGES IN PERSONNEL What should I do if any of the official personnel listed on the records for my license leave the firm? Sole Owner ot transferable. If a contracting business A sole ownership license is n is purchased from the holder of a sole own ership license, the license is not part of the purchase. The new owner must contractor apply for and obtain his or her own license before he or she can contract legally. Partner If a general or qualifying partner leaves the business, the existing license is canceled. The remaining partners may request a one -year con tinuance of the license to complete projects in progress. The request for a continuance must be submitted to C SLB within 90 days of the date the partner left. Except for those cases where the partner died, the remaining partners can not contract for any new projects under that license. The remaining partners must apply for a new license if they choose to remain in business beyond the one (1) year limit of the continuance. NOTE : D o not wait until the one -year continuance is about to expire before apply ing for a new license. Timely processing of you r new

69 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 37 INING AND CHANGING I license is important id a lapse in licensure, submi t the . T o avo ly. necessary applications prompt A limited partner may be added or deleted from a license by submitting a “Change in Limited Partnership” form. Corporate Officers ny of the officers listed in CSLB If a records for a corporate license leaves you r business, y ou must report the change to CSLB within 90 days by submitting a “Disassociation Request.” To add personnel, you must complete and submit an “Application to Report New Officers of .” The status of your license is not affected by adding a Corporation rs or having any of them leave unless the person who leaves has office been ser ving as a qualifying individual. ( S ee Qualifying Individual .) below Limited Liability Company (LLC) Personnel If any of the members, managers, or officers listed in CSLB records for an LLC license leaves your business, you must report this change to CSLB w ithin 90 days by submitting a “D isassociation Request.” To add personnel, you must complete and submit an “ Application to Report New Officers of a Limited Liability Company .” If you are adding personnel, the amount of your LLC liability insurance must be sufficient for the total number of personnel of record as required by The status of your license is not affected by adding members, law. , or having any of them leav e unless the person managers, or officers who leaves has been serving as a qualifying individual. ( S ee below Qualifying Individual .) Qualifying Individua l (Responsible Managing Officer, Employee, Member, or Manager ) If an RMO, RME, responsible managing member, or responsible ma naging manager leaves a business (disassociates), you must notify CSLB in writing within 90 days of the date of disassociation. Use a “Disassociation Notice ” form. You must specify : • Name of the qualifying individual who left • Date of disassociation • Name o f the business • Contractor license number One of the remaining official personnel listed in CSLB records for that license, or the qualifying individual who is disassociating, must sign the notification of disassociation or your letter.

70 38 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE If you intend to cont inue to conduct business in the classification for you must replace which the qualifying individual was responsible, Failure him or her within 90 days of the date of disassociation. to do so will result in suspension of your license or removal of the class ification from your license. To replace a qualifying individual, you must file an “Application for “Application f or Limited or Replacing the Qualifying Individual” Liability Company (LLC) Replacing the Qualifying Ind ividual” and submit the required application fee. This application also can serve as the notice of disassociation. You should act quickly because, within those 90 days, CSLB must process your application and, if necessary, SLB law and business the new qualifying individual must pass the C d/or trade exam (s). exam an The requirements for a qualifying individual and the criteria for a s are described in Chapter 1. waiver of the exam Right to Petition You may petition the Registrar for reconsideration if you dispute the date of disassociation on which the suspension was based. You may also petition if you can show good cause for your failure to notify the Registrar within 90 days of the date of disassociation. CSLB must receive your petition within 90 days from the date of the b oard ’s notice that you mu st replace the qualifying individual or CSLB will suspend the license . B&P Code § 7068.2 and § 7076.) (See Changes in the Bond Exemption Status of a Responsible Managing Officer of a Corporation, or Officer, Member or Manager of an LLC ’s share of the voting stock of the corporation , or the If the RMO ’s, responsible managing member ’s, or responsible managing RMO manager ’s membership interest of a limited liability company, falls below 10 percent he or she will no longer be eligible for exemption from the bond requirements. You must report the change in exemption status and file a “ Bond of Q ualifying Individual ” form within 90 days of the change. Exemption that Allows an Individual to Serve as the Qualifying Individual for More T han One License A person is allow ed to serve as the qualifying indivi dual for more than one license, but for no more than three firms in any one- year period if any of the following conditions exist: ● There is common ownership of at least 20 percent of the equity of each firm involved;

71 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 39 INING AND CHANGING I The other licenses are subsidiaries of, or participants in a joint ● venture with the first; or ● The majority of partners, officers , or managers are the same. If this common ownership no longer exists, the qualifying individual must disassociate from each license for which the exemption status B&P Code § 7068.1.) no longer applies. (See CHANGES IN BUSINESS NAME OR ADDRESS Report changes in business name or address as soo n as possible, but no later than 90 days after the change. Business Name business name “Application to Report a change in by completing an Business Name and/ .” Note the following Change or Address conditions: ● signed by an owner, partner, officer , The form must be member, or manager of the firm . ● If you hold a corporate license or limited liability company (LLC) license , you must first register the name change with the California Secretary of State. Include a certified copy of the ” (for a corporation) “Amendment of Articles of Incorporation or when ” (for an LLC), as appropriate, “Statement of Information you submit the information to CSLB . ● The new business name must not conflict with the type of business ity or the classification held. ent Business Address Report a change of the official address of your business by completing the “Application to Change Business Name and/or Address .” The form must be signe d by the owner, a partner, officer , member, or manager of the firm . CHANGES IN BUSINESS TYPE New License Necessary if Business Type Changes CSLB issues licenses to five types of business entities : sole ownership, partnership, corporation , joint venture , and limited liability . Licenses are associated wit h the business and not company necessarily the qualifier. Therefore, licenses are not transferable from one business entity to another, even if the qualifier is the same for both. A new license is required whenever the business entity type is changed. For example, if a contractor with a sole ownership business

72 40 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE decides to incorporate, or a partnership splits into multiple sole ownership businesses, a new license is required in each case. type changes and a new license is not Whenever a business entity issued, that b usiness faces all the legal risks of an unlicensed contractor. FREQUENTLY ASKED QUESTIONS ABOUT NEW LICENSE REQUIREMENTS How do I get a license for my new business? To obtain a license for your new business, you must submit an ” (available at www.cslb.ca.gov). Use “Application for Original License the “Application for Original License 7065)” if -Examination Waiver ( you took the exam for the previous license and are applying for the classification previously held. No exam will be required. You also must pay a ll required fees, post new bonds, provide proof of ’ compensation insurance or file a workers ’ compensation workers exemption statement, and provide proof of liability insurance coverage, if applicable, for the new business. Can I keep my old license number ? Only in some cases will the same license number be reissued. CSLB will reissue the original license number if the original license is for a sole ownership business that is being incorporated, or changed to a limited liability company, and the qualifier o n the sole ownership business owns 51 percent or more of the voting stock or equity of the new corporation, or of the membership interests of the LLC. In this you must submit a written request with your application situation, asking that your sole ownershi p license be reissued to the corporation ’s percent age or LLC. The written request must include the contractor can contact CSLB to of ownership in the corporation or LLC. You also obtain the appr opriate form . Often, corporate restructuring require s a new license. Under limited circumstances, a corporation or limited liability company may keep the or iginal license number. Under other circumstance s, such as when a business changes from a sole ownership to a partnership or a or LLC to a sole ownersh ip, CSLB will issue a new license corporation number. Can the license number be changed back to a sole ownership license after it has been used as a corporate or LLC license? No. Once your license number is reissued to a corporation or LLC , it cannot be changed back t o a sole ownership license. CSLB will issue a new license number if you apply for a sole ownership license.

73 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 41 INING AND CHANGING I Information about new license requirements can be found on www.cslb.ca.gov You also can (800) 321- CSLB (2752). . call INACTIVATING AND REACTIVATING A LICENSE What is an inactive license? An inactive license is “on hold.” While your license is inactive, you practice as a contractor or submit a bid for work. You do not cannot need to maintain a bond or workers ’ com pensation or liability insurance coverage, nor do you need to have a qualifying individual on your license. As long as you continue to renew your inactive license renewal you will receive informational bulletins and a license years at the address listed in CSLB application every four (4) . records It is not necessary to inactivate your license because of bond suspension or temporary work stoppages. However, you may be ur license if you apply to serve as the required to inactivate yo qualifying individual for another license and you do not meet one of the conditions of B&P Code s ection 7068.1 (see “Exemption that Allows an Individual to Serve as the Qualifying Individual for More Than One License” above ). How do I inactivate my license? Follow steps below to inactivate your license: the ● Request the “Application to Inactivate State Contractor ’s License ” form by telephone, in writing from any CSLB office, or online at www.cslb.ca.gov . There is no appl ication fee. (There is a fee to reactivate a licen se.) If the period of inactivity wi ll be section describing how to reactivate a license short, read the before you decide to inactivate your license; ● Have the owner; a partner; an officer of your c orporation; a member, manager, or officer of your limited liability company; or a member of the j oint vent ure license who is listed in CSLB records for your license sign the application; and Return your current pocket license with the application. If you ● have lost your pocket license, check the box on the appl ication and enclose the replacement fee indicated. You will be sent a pocket license stamped “Inactive.” Is an inactive license subject to renewal requirements? Yes. Every four (4) years , a renewal application will be sent to th e business address liste d in CSLB records. You must notify CSLB in writing of any change of address. There is no limit on the n umber of times your contractor license can be renewed on inactive status.

74 42 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE What should I do if I want to resume contracting? If you want to resume contracting and your license is inactive, you must reactivate your license before you begin contracting. B&P (See Code §7076.5 and CCR §867.) How do I reactivate my license? To reactivate an inactive license, request a reactivation application by , via CSLB’ s website, or in writing from CSLB ’s Sacramento telephone headquarters office, complete the application, and meet the following conditions: Meet all bond requirements , including any disciplinary bond , ● contractor bond, ond of q ualifying LLC surety bond, or b individual. Attach all required bonds to the application. Do not send bonds separately; ● Submit proof of workers ’ compensation insurance or exemption ; For limited liability company licenses only, submit proof of ● liability insurance in the amount that is required for the number of personnel on the license; The application must be ● all qualifying partners, signed by responsible managing employees, responsible managing members, responsible managing managers, and responsible officers. managing sole ownership license, the owner If applying to reactivate a , all partners must sign; if a must sign; if a partnership license corporation one cor porate officer must sign; if a limited , liability company , one member, manager, or officer must sign; and if a joint venture license , the qualifying individuals of each entity must sign; ● Comply with any special requirements for the qualifying individual, such as the need to disassociate from any other license for which he or she currently serves as the qualifying inactivation of his or her individual license, individual or unless he or s he can provide verification of common ownership of at least 20 percent of the equity of every business for which he or she serves as the qualifying individual; and ● Submit the required fee. What other conditions must I consider when reactivating a license ? If there has been a change in the form of your business ( for example , you have formed a partnership, corporation , or limited liability

75 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 43 INING AND CHANGING I company ), or if a partner has joined or left your business, you will need a new license. If you hold a e, and wish to make any additions to the corporate licens list of officers, you must complete and submit an “ Application to Officers of a Corporation .” To delete officers, complete Report New and submit a “Disassociation Request.” To change the qualifier, Appl ication to R eplace the Qualifying Individual. ” For request the “ changes to the personnel of LLCs, you must complete and submit the comparable LLC forms. ontractors Before a license can be activated, c submit proof of must ’ compensation insurance coverage, and liability insurance workers , if applicable, or filed an exemption. Contractors without coverage are exempt from carrying workers ’ compensation employees insurance, but must ation of this exemption with CSLB . file a certific (See B&P Code §7125.1.) Obtain the exempti on form from www.cslb.ca.gov , or reque st it by calling (800) 321- CSLB (2752). All C-39 Roofing contractors must carry workers’ compensation insurance regardless of whether or not they have employees. ctive date of reactivation? What is the effe Your license will be reactivated on the date that the required fee, an acceptable application, and other required documents are received and processed by CSLB. After CSLB processed your reactivation l be active for two (2) application, your license wil years from the end of the month in which it was reactivated. B&P Code §7076.5 and (See CCR §867.) How do I order a new wall or pocket license? Official personnel for the license may order a new or an additional wall or pocket licens e by completing and sending CSLB the “Order Wall Certificate or Pocket License” form available at www.cslb.ca.gov . y the license number and if Specif you are requesting the wall or pocket license. The form must be sign ed by current personnel listed the license (owner, partners, on , managers, members , or officers RMEs). A fee is required for each copy . (Call CSLB or check the website for the current fee.) Make the check payable to the Registrar of Contractors. Do not sen d cash. RENEWING YOUR LICENSE Active licenses expire every two (2) years. Inactive licenses expire every four (4) years. Check your current pocket license for the expiration date on your license.

76 44 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE How do I renew my license? is due to expire, CSLB will send About 60 days before your license of any you a renewal application. It is important to notify CSLB change of address. It is your responsibility to make sure your form. license is renewed even if you don ’t receive the renewal When You may not contract for work with an expired license. you receive the renewal application, complete it and promptly return it to CSLB. Keep the following things in mind as you complete your application: ● Because processing times vary, CSLB encourages you to ; submit your renewal as early as possible The application and requirements must be submitted and ● approved as “accepted”; You must submit the required fee; ● ● The renewal application must be comple ted and signed; and ● Your renewed license may be either active or inactive. If you renew the license as inactive, you do not need to maintain any bonds or designate a qualifying individual. If you wish to change the license from inactive to active at the time of renewal, see the section above, “How do I reactivate my license?” What happens if I don ’t renew my license by the expiration date? cannot You contract for work with an expired license. legally CSLB must receive a n acceptable license renewal for m prior to the expiration date of the license. If you renew your license after the expiration dat e or if you send a form not considered acceptable, your renewal will be considered delinquent, and the license record will show a break in license status. ng any such period, the Duri contractor will be considered unlicensed. In addition, if the license is expired, you will need to pay an additional delinquent fee of 50 percent of the renewal fee. You may re new an expired license within five (5) years after its expiration. After five years, it becomes void, and if you wish to contract, you must apply for a new license and fulfill the exam or waiver requirements again. You may petition the Registrar to renew your license retroactive to the renewal date.

77 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 45 INING AND CHANGING I May I renew my license if it is suspended? active or inactive. A suspended license may be renewed as either However, you may not contract for work with an inactive or suspended license and you will not be issued a wall or pocket license. If you wish to contract for work, you must clear the suspension before (See B&P Code §§7140- 7145 your license can be renewed as active. §853.) CCR and CANCELLATION OF A LICENSE Under what circumstances is a license canceled? any o A license is canceled if occur: f the following ● Individual license : death of the owner; : death or disassociation of a general or ● Partnership license qualifying partner; Corporate or ● license : notification by limited liability company the licensee of merger, dissolution, or surrender of the right to do business in California; and /or ● Joint v enture license : cancellation, revocation, or withdrawal of any of the businesses that formed the joint venture. or limited liability company also will be A corporation license canceled 60 days after CSLB discover s that the corporation or LLC , or surrendered the right to do business. has merged, dissolved A licensee may also voluntarily request to a license at any cancel Remember: I time. t is illegal to contract with a canceled license. How do I cancel my license? You must notify CSLB in writing within 90 days of the event that prompted the cancellation . There is no fee for cancellation. request Return your wall certificate and your current pocket license with the written request for cancellation. Depending on the type of license you hold, your request for cancellation must meet the following requirements: ● The owner of a sole owner license must sign the request for voluntary cancellation. In the case of the owner ’s death, a family member or administrator of the es tate must sign the request, state the date of death, and provide a copy of the death certificate;

78 46 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE partnership license must be canceled due to the If a ● disassociation of a partner, a general partner must sign the on; in the case of a request and state the date of disassociati ’s death, a remaining partner must sign the request, partner state the date of death, and provide a copy of the death certificate; To cancel a corporate license, two officers listed on the ● officer remains, license, or the remaining officer if only one must sign the request and state the date of the event causing cancellation , or enclose a copy of the corporate minutes , or enclose a copy of the documenting the dissolution or merger f State; dissolution papers issued by the California Secretary o To cancel a limited liability company ● license, two members, managers, or officers listed on the license, or the remaining officer if only one remains, must sign the request and state the date of the event causing cancellation , or enclose a copy of the dissolution papers issued by the California Secretary of State; and ● To cancel a joint venture license, one of the official personnel (other than an RME) listed in CSLB ’s records for the license of he any of the businesses forming the joint venture must sign t request and state the date of the event causing the cancellation. What is the effec tive date of a license cancellation? The effective date of cancellation of a license is usually either the date CSLB receives the request for cancellation or the date of the event causing the cancellation. NOTE: A cancellation is not effective until it has been accepted by CSLB. The b oard may decide not to cancel a license if disciplinary action is pending. If an event occurs that makes a license subject to cancellation, can a business continue to operate temporarily ? Yes. Under certain circumstances, the Registrar may grant a year. There are restrictions on who may continuance for up to one (1) apply for the continuance and on one ’s right to enter into new contracts. If granted a continuance, this is a temporary period for the business to reorganize. If a business wants to operate beyond the temporary period , it must submit an application as soon as possible. Who may apply for a continuance? The rules on who may apply for a continuance vary depending on the type of license:

79 CHAPTER 2. YOUR EXIS TING LICENSE: MAINTA T 47 INING AND CHANGING I ● Sole Ownership If the licensee dies, a member of his or her immediate family to continue the family business may apply ; Partnership ● d in CSLB records, may apply; The remaining partners, as liste Joint ● Venture The remaining businesses listed in CSLB records as those who formed the joint venture may apply. : Since corporate and limited liability company licenses are NOTE as a whole, the status of the license granted to the corporation or LLC is not a ffected if one of the officers , members, or managers leaves. Therefore, continuances are not granted for corporate or LLC licenses. How do I apply for a continuance? To apply for a continuance, submit a written request to CSLB as soon as possible but no later than 90 days from the date of a death or disassociation , stating why a continuance is necessary . What does a continuance allow me to do? Under a continuance of a sole owner or of a partnership license (when one of the partners has died), you may contin ue normal business operations and enter into new contracts during the period for which the continuance is granted. Under a continuance of a joint venture license or of a partnership license (when one of the partners has disassociated ), you may conduct busi ness only on those contracts entered into before the event necessitating cancellation occu rred. You may not enter into new contracts. Can a continuance be extended? Yes. The Registrar may approve an extension to the one- year provision if additional time is necessary to complete projects contracted for or commenced before the disass ociation or death. A license extended under these circumstances is subject to all provisions , including those relating to renewal and bond requirements.

80

81 Chapter 3. Information Access to Licensee DOCUMENTS, COMPLAINT RECORDS, FEES AVAILABLE You may obtain license information by checking CSLB’s website, www.cslb.ca.gov 24/7 automated, toll- , or by (800) calling the free line CSLB (2752). CSLB ’s website can be accessed from 6 a.m. 321- Monday through 8:30 p.m. Sunday (PST). The website is generally for unavailable from 8:30 p.m. Sunday to 6:30 a.m. Monday . maintenance llers can enter the contractor license number to learn if a Ca contractor license is valid and the contractor has disclosable complaints. ’s website for general information regarding licensing, Visit CSLB sistance services (such as selecting a contractor during a consumer as state of emergency), consumer complaint services, online publications , and license status information. To obtain written information or copies of documents in CSLB ’s possession, send a written request to CSLB, P.O. Box 26000, Sacramento, CA 95826. Provide the full name, business name ctor license number , and specify exactly what kind of , or contra ation you are seeking. CSLB inform provides copies of records with personal and confidential information deleted. INFORMATION REGARDING INDIVIDUAL LICENSE RECORDS CSLB will provide the following informa tion after receiving a written request and the appropriate fees . (See chart on following pages .) ● Report of current bond information ● Report of current license status ● Records search and certified report of license history (past 10 years only unless a specific time period is requested ) ● Records search and certified report of no license history (pa st 10 years only unless supporting documents are submitted to support the need for more than 10 years) ● Records search and certified report of home improvement salesperson registration 49

82 50 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE Copies of documents (personal and confidential information ● ) deleted ● Disclosure of complaints resulting in legal action and a histor y of legal actions taken by CSLB against current license holders Disclosure of open complaints that meet the criteria of B&P ● ection 7124.6 in that they: “ ... have been referred for Code s stigation after a determination by board enforcement staff inve that a probable violation has occurred, and have been reviewed by a supervisor, and [the complaints] regard allegations that if proven would present a risk of harm to the public and would be appropriate for suspension or revocation of the contractor ’s license or criminal prosecution.” QUANTITIES INFORMATION REGARDING LARGE OF LICENSE INFORMATION Public Sales Custom Order Form With this form , you may order license information within specified parameters, including license status, license classification(s), geographical locations, etc. The information provided is in Text File Fo rmat, and includes: contractor license number, business n ame, address and telephone number , license classification(s), business , and workers insurance county, bond company ’ compensation information. No email addresses are provided . Record layout may be viewed at www.cslb.ca.gov . Go to the “Online Services” section, click on the “Request Applications, Forms, Guides” tab, then select “Forms and Applications.” Under “Forms,” find “Public Sales Custom Order Form .” There is a $245 non - refundable fee for this service. Full File/Update File Order Form - CD/DVD CSLB license information is available in Text File Format on CD/DVD. Available files include: License Master Full File *, License Master Update File, Business Principal Full File, Business Principal Update File, Action Code Full File, Action Code Update File, Workers ’ Compensation Full Fi le, Workers ’ Compensation Update File, Complaint Disclosure/Legal Action Full File, and Complaint Disclosure/Leg al Action Update File. * Full Files may require the use of software to read large files, e.g. , LTF (large text files) viewer 5.2u.

83 CHAPTER 3. ACCESS TO INFORMATION ABOUT LI 51 CENSEES Telephone nu mbers are provided on the license master file $235 non for each file. only -refundable fee . There is a To obtain an order form, call (800) 321- 2752, or download the form at www.cslb.ca.gov section, click on the the “Online Services” . Go to “Request Applications, Forms, Guides” tab, then select “Forms and Ap plications.” Under “Forms,” go to “Full File/Update File Order —CD/DVD .” Form Submit the completed form to: Contractors State License Board Attn: Data Services Unit P. O. Box 26000 Sacramento, CA 95826 Fees must be paid in advance by check or money order . DO NOT SEND CASH. If you have questions about ordering, call the CSLB Help Desk at (916) 255- 3975. INFORMATION REGARDING PENDING APPLICATION RECORDS CSLB provides a website page that allows users to download the Pending Application Master Postlist and Pending Application Personnel File on a daily basis. Pending Application Master Postlist The includes application number, business type, business name and address, lice nse classification(s), and examinee name (if an exam is required). No . telephone numbers are provided Pending Application Personnel File includes application The number, personnel name, position, and license classification(s). No telephone numbers are pro vided . To access this information on the , visit: CSLB website https://www2.cslb.ca.gov/OnlineServices/CheckApplicationII/Applican tRequest.aspx . If you have qu estions about accessing this data, call the CSLB Help Desk at (916) 255- 3975. INFORMATION REGARDING LEGAL ACTION AGAINST CONTRACTORS CSLB can provide public information on complaints that have been investigated and referred for legal action, or that concl uded in legal action administered by the b oard against a license. The fact that a

84 52 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE complaint against a contractor has been referred for legal action does mean the contractor has violated contractors ’ state not necessarily ments as to the validity of the no conclusions or judg license law; charges are assumed. of Contractor ’s License You may obtain a “Request for Disclosure form from the CSLB w ebsite. ” Information ’s website and toll- free line also provide the following: CSLB ● General license information, including business name, license (s), address of record, and official number, license classification personnel listed for a license; Bond information, including bond amount, bond identification ● ompany ; and number, and name of bonding c Workers ● insurance information, including the ’ compensation workers ’ compensation insurance carrier, policy number, effective date , and expiration date. DOCUMENTS AVAILABLE FROM CSLB PLEASE NOTE : All fees a re current as of January 1, 201 8. For verification of current fees, www.cslb.ca.gov or contact CSLB at check CSLB (2752) (800) 321- . FEE TYPE OF DISTRIBUTION/ PROVIDES AVAILABLE INFORMATION BOND STATUS $8 each ; Public Current bond(s) Available at: LETTER information; www.cslb.ca.gov names/addresses of Request for Submit a “ (800) 321- CSLB that surety companies Current Bond provide bonds; on ” form Informati , and issuance, renewal expiration/ cancellation dates; entity status; business name of contractor, , and address classification(s) held.

85 CHAPTER 3. ACCESS TO INFORMATION ABOUT LI 53 CENSEES TYPE OF PROVIDES FEE DISTRIBUTION/ AVAILABLE INFORMATION of each $12 CERTIFIED COPY Members of the Replacement copy ntity licensed e WALL OR POCKET ; LICENSE of a Available at: www.cslb.ca.gov currently renewed license Submit a “Wall and/or Pocket Certificate” form (also used to change a business name and/or address). ered Regist Replacement copy $12 each CERTIFIED COPY of ; HOME salesperson IMPROVEMENT Available at: SALESPERSON www.cslb.ca.gov REGISTRATION of a Pocket Card currently renewed registration “Changing Submit a HIS Address or Request for Pocket Registration Card” form PHOTOCOPIES of 10¢ per ; Public Copy with all personal or confidential Available at: page DOCUMENTS information deleted www.cslb.ca.gov Submit a “Request for CSLB (800) 321- Copies” form COPIES c $2 ertifica CERTIFIED - Board c ertification of ; Public , authenticity, currency tion fee per Available at: of PHOTOCOPIED and accuracy DOCUMENTS license www.cslb.ca.gov CSLB (800) 321- PLUS 10¢ Submit a “Request for per page Copies” form copied GENERAL STATUS $8 each ; Public Current license LETTER information excluding Available at: bond status: NOT www.cslb.ca.gov Request for Submit a “ certified (800) 321- CSLB General Status ” form Letter

86 54 ORNIA CONTRACTOR LICENSE SECTION I. THE CALIF DISTRIBUTION/ TYPE OF FEE PROVIDES AVAILABLE INFORMATION each 67 $ ; Public Certified history of CERTIFIED Available at: license (“record”) or HISTORY LICENSE absence of license www.cslb.ca.gov Admissible as prima (800) 321- CSLB -record” / (“No evidence of the facie “Certificate of Non - sed ts s fac tated (u licensee”) for a given primarily for court time period. Includes: actions.) classification (s) held; license personnel, any Submit “Request for disciplinary actions on Certified License bond but NO OTHER form three History ” bond information months IN (3) UNLESS specially of need ADVANCE requested, and the standing of the license at all times during the period covered by the . certificate Public; $67 each CERTIFIED of Certified history Home Improvement REGISTRATION Available at: HISTORY Salesperson www.cslb.ca.gov Registration. A “record” certificate Home Improvement includes the Salesperson registration number, effective date, Submit a “Request for business name, and Home Improvement the license number of Salesperson the contractor with Registration whom the salesperson form Information” is registered. If the two to three weeks person is not of IN ADVANCE - registered, a “no need record” certificate is issued.

87 CHAPTER 3. ACCESS TO CENSEES 55 INFORMATION ABOUT LI DISTRIBUTION/ TYPE OF FEE PROVIDES AVAILABLE INFORMATION each 235 $ ; c Publi file different ELECTRONIC Four file available at: MEDIA are available: formats , non - refundable ● License file www.cslb.ca.gov Submit a “ / Full File Business principal ● Update File Order ” (all personnel file form of record for each license) Information is ● ’ Workers available in Text File compensation file . Format on CD/DVD Action codes or ● complaint Full Files are al disclosure/leg . produced twice a year action file showing Update Files, ’s the past month activity, are produced monthly. $245 , SPECIAL Public Specially compiled list ; available at: INFORMATION of contractors, nonrefund - REQUEST according to a variety www.cslb.ca.gov able of criteria that you Submit a “ Public select. With this Custom Order ” Sales service, you can form specify geographical area, license classification, license status , etc. The information provided is in Text File Format , and include s the business name, and business address telephone number , license number , and license classification(s) .

88 56 SECTION I. THE CALIF ORNIA CONTRACTOR LICENSE PROVIDES DISTRIBUTION/ TYPE OF FEE AVAILABLE INFORMATION D INTERNET ACCESS No fee ownloads of the ; Public Pending Application Access this TO PENDING information at: MASTER and APPLICATION https://www2.cslb. PERSONN EL Posting RECORDS List on a daily basis. ca.gov/OnlineServ Available information ices/CheckApplica inc ludes the name, tionII/Appli cantRe address, , personnel quest.aspx and classification (s) for all appl ications , call the For help posted by CSLB . CSLB Help Desk 255 - 3975 . at (916 )

89 Chapter 4. Enforcement Procedures: Complaints and Citations Complaints against contractors may be filed with CSLB by homeowners, other contractors, subcontractors, material suppliers , or employees. Public agencies also may file complaints. Most complaint s made against contractors involve poor workmanship ; abandonment of a project ; failure to pay subcontractors, suppliers, or ; lack of reasonable diligence in ; building code violations employees executing a construction project ; use of false, misleading, or deceptive ; and violations of the law governing home improvement advertising contracts. COMPLAINTS AGAINST LICENSED CONTRACTORS When a complaint is made against a licensed contractor, CSLB reviews it to determine if it falls within CSLB ’s jurisdiction. CSLB sends a confirmation to the complainant that it has received the complaint and also sends a notice to the licensed contractor to determine if the complaint can be resolved without further board involvement . If the comp laint has not been resolved after the contractor has been notified , a CSLB r epresentative may contact the complainant and respondent (the licensee) to request additional information and, if necessary, documentation. If appropriate, CSLB will attempt mediation. If mediation is unsuccessful, CSLB may recommend its arbitration program, or settlement through recommend that the complainant contact the surety company that issued the contractor ’s bond, file a claim in small claims court , or file a civil suit in superior court. If CSLB believes that it is warranted, it may conduct an investigation to determine if there ar ontractors ’ state license l aw. e violations of c An investigation may involve interviewing the complainant, the contractor, and any other parties who can furnish relevant information. What happens if a violation is established? If a violation is established but it is an isolated or minor one, CSLB may se nd the licensee an advisory notice . The advisory notice informs the licensee that CSLB is aware of the violation and that a future occurrence of the same violation may result in more stringent board actions . 57

90 58 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA If a more serious violation is established, the Registrar of Contractors may issue a citation, which can include an order to correct a project, make restitution to an injured party, and pay a civil penalty of up to $5,000 for violations by licensees and $15,000 for unlicensed contractors. See B&P § 7099.2(b) regarding $15,000 citations for ( violations of B&P §7114 and B&P § 7118.) takes no If the licensee complies with the citation orders, CSLB further action. If the licensee contests all or any part of the citation, a may be held to resolve the citation . mandatory settlement conference If the matter is not settled, a hearing can be set before an administrative law judge of the State of California. At the hearing, . If the licensee the licensee can argue against the citation orders vails at this hearing, CSLB takes no further action. If, however, pre the licensee does not prevail and does not comply with a final citation order, the license may be suspended and then revoked. For flagrant violations of law, the Registrar will take administrative action by filing an accusation with the state Attorney General stating the b ’s intent to suspend or revoke the license. The licensee may oard be provid ed the opportunity to resolve the matter at a m andatory settlement conference. If the matter is not settled, the licensee is given an opportunity to defend himself or her self at a hearing before an administrative law judge. The following procedures may be used to decide a case: n ● The licensee may choose to have a hearing before a administrative law judge. The recommendation of this judge is used by the Registrar in determining the appropriate action to take; ● settlement of The licensee and the Registrar may negotiate a the case. This settlement is known as a “stipulation ;” or ● If the licensee fails to respond to the accusation, the case will be considered to be in default. The Registrar will decide on the appropriate action to take against the licensee. The decision of the Registrar may include various remedies: ● icense Revocation of the L s right to contract The licensee’ is taken away. The license shall not be reinstated or reissued for one (1) to five (5) years from the effective date of the decision. No ne of the official personnel listed in CSLB records for a revoked license and who have been found to have known about , or participated in , the acts or omissions constituting grounds for the revocation may apply for a license until the penalty

91 CHAPTER 4. ENFORCEME NT PROCEDURES: COMPL 59 AINTS & CITATIONS period is over. The licensee also must show that he or she has complied with all provisions of the decision and settled any loss caused by the act or omission that resulted in the revocation of the license , and must file a disciplinary bond in the amount set by the Reg istrar . Suspension of the L ● icense The licensee is not entitled to operate during the period of suspension. A disciplinary bond must be filed before the license will be reinstated or reissued . Stay of Suspension or Revocation ( Probation) ● The licensee mu st abide by certain terms and conditions to keep the suspension or revocation from going into effect. He or she must f ile a disciplinary bond to remain in business also during this period. Suspension or revocation of the license will erms of the agreement are violated . result if any of the t Recovery of Investigation and E nforcement Costs ● The licensee, to maintain good and clear standing or as a condition for renewal and reinstatement of his or her license, must pay the costs as ordered or as stipulated. with No P enalties ● Dismissal Matters that have been dismissed are not disclosed to the public. ● Injunction against Unlawful A ctivity Upon establishing that a blatant violation of the law has occurred, CSLB may go to court to request an injunction to immediately stop the unlawful activity . ● Criminal Charges If a blatant violation of the law has occurred, CSLB may refer istrict attorney for the complaint to the local office of the d a possible criminal filing . Complaint Disclosure Once CSLB has determined that a probable violation of law has occurred, which, if proven, would presen t a risk of harm to the public —and for which suspension or revocation of the contractor ’s license would be appropriate —the date, nature, and status of the complaint will be disclosed to the public. A disclaimer statin g that the complaint is, at this time, only an allegation will accompany this disclosure.

92 60 SECTION I. THE CONTRACTOR LICENSE CALIFORNIA Citations will be disclosed to the public from date of issuance and for years from the date of compliance. five (5) evocation of the d r Accusations that result in suspension or staye license shall be disclosed from the date the accusation is contractor years after the accusation has been settled, filed and for seven (7) including the terms and conditions of probation. All revocations that sed indefinitely from the effective date of are not stayed shall be disclo the revocation. COMPLAINTS AGAINST ADDRESSING UNLICENSED CONTRACTORS it is a misdemeanor to engage in the business or act in In California, ontractor without a contractor license unless the the capacity of a c contractor meets the crite ria for exemption specified in Business and Professions Code sections 7040 through 7054.5. When a complaint is filed against an unlicensed contractor, CSLB ontracted without a will verify that the accused individual or firm c contractor license and will, with sufficient evidence, determine the amount of financial injury involved. How does CSLB process complaints against unlicensed contractors? When the b oard receives a complaint against an unlicensed contractor, it may issue an admini strative citation or file a criminal ’s office action with the local district attorney . In some cases, it may initiate injunction proceedings against the non -licensee through the Office of the Attorney General or the d istrict attorney. ● Citation The Registrar may issue a citation to an unlicensed contractor when there is probable cause to believe that the person is acting in the capacity of a contractor or engaging in the business o f contracting without a license in good standing with CSLB . The citation includes an order of abatement to cease and desist and a of up to $15,000. Unless the civil penalty board receives a written appeal within fifteen (15) working days after the citation is served, the citation becomes a final order of the R egistrar. The civil penalty is paid to CSLB. If the citation is appealed, a mandatory settlement conference may be held to resolve the citation. If the matter is not settled, an administrative law judge will hear the appeal. The administ rative law judge submits a decision to uphold, modify , or dismiss the citation. The decision is sent to the Registrar for adoption.

93 CHAPTER 4. ENFORCEME NT PROCEDURES: COMPL 61 AINTS & CITATIONS If the cited unlicensed contractor continues to contract without a license, the Registrar may refer the case to the local d istrict attorney for criminal action. ● Criminal Action CSLB may refer investigations to the local prosecutor to file criminal charges. If criminal charges are filed, the unlicensed contractor appears in local court, which renders a final decision on the case. The court may order a fine, proba tion, restitution, a jail sentence, or all of these. Injunction ● The Registrar may apply for an injunction with the superior court of either the county in which an alleged practice or , or the county in which the unlicensed transaction took place person ma intains a business or residence. An injunction restrains an unlicensed person from acting in the capacity or engaging in the business of contracting without a license in with CSLB . good standing How does CSLB process complaints against unregistered salespersons? The same citation process used for complaints against unlicensed contractors is used for complaints against unregistered home improv ement salespersons. D can be taken isciplinary action also against the licensed contractor who employs the unregistered salesperson. Statewide Investigative Fraud Team the Statewide In addition to the complaint process, CSLB established Investigative Team (SWIFT), an arm of the Enforcement Fraud division that focuses on the underground economy and unlicensed contractors who prosper at the expense of consumers and legitimate businesses. ’s SWIFT unit has the authority to visit any job sit e CSLB without cause or complaint, ask contractors to produce proof of licensure in good standing, and cite those not properly licensed. (See B&P Code §7011.4 and § 7099 .)

94

95 SECTION II. HOME IMPROVEMENT 5. Home Improvement Chapter Chapter 5. Home Improvement Home improvement is the repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property and includes , but is not limited to, the con struction, erection, replacement, or improvement of driveways, swimming pools (including spas and hot tubs), terraces, patios, awnings, storm windows, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements of the structu res or land adjacent to a dwelling . Home improvement is also the installation of home improvement goods or the furnishing of home improvement services. HOME IMPROVEMENT CONTRACTOR A home improvement contractor, including a swimming pool contractor, is a contractor licensed by the Contractors State License Board (CSLB) who is engaged in the business of home improvement -time or part -time. either full HOME IMPROVEMENT CONTRACTS The home improvement business in California constitutes a large portion of the sta te’s construction industry. Because of the nature of , there is a potential for abuses or the home improvement field . Abuses are often caused by unlicensed operators or problems unethical or incompetent contractors. Problems can occur because of a general m isunderstanding of basic requirements and the agreement between the owner and contractor. Spe cial legal requirements specifically for vement contracts were enacted to home impro eliminate as many of these problems as possible. It is important for contractors to stay current on all requirements. In 200 4, through SB 30, and in 2005, through AB 316, the Legislature made significant additions to the information the contractor must provide to the buyer of home improvements. The idea behind the is to u legislation se the contract itself to inform homeowners of the most important contract requirements. With this inform ation in 63

96 64 SECTION II. HOME IMPROVEMENT hand, consumers can better understand the process. T he availability to reduce umer protection information is intended of this simple cons the n umber of disputes between contractors and homeowners and, plaints that homeowners make to CSLB . therefore, the number of com , which took effect in 2005 , maintained many of the existing SB 30 home improvement contract provisions and added some new requiremen ts as well. Among the requirements: any changes made to contracts must be in writing, be legible, be easy to understand, and inform a consumer of his or her right to cancel or rescind the contract ; and a home improvement contract must contain various infor mation, notices, and disclosures for the protection of the consumer. SB 30 also created a “service and repair contract” to be used by licensed contractors for jobs of $750 or less, provided that the contract meets enacted various disclosure all four of the new requirements. The bill requirements applicable to the service and repair contract. SB 30 provided that any violation of the provisions subjected the contractor to discipline. SB 1113 postponed implementation of the SB 30 provisions until 2006. The bi , and ll also revised and recast some of the provisions made other related changes in other provisions of law. SB 1113 took effect immediately as an emergency statute. AB 316 revised and recast the service and repair contract requirements and set forth information, notices, and disclosures required to be included as part of the contract. In addition, a service and repair contract that does not meet specified requirements is subject to the requirements applicable to a home improvement contract regardless of the aggregate contract price. In drawing up contracts, contractors should pay strict attention to the requirements for print typeface and point size For example, unless a larger of the notices and disclosures. print typeface is specified, text in any print ed form shall be in at least 10- point type and the headings shall be in at least 10 -point boldface type. For more detailed information on home improvement contract requirements, visit www.cslb.ca.gov (search: home improvement contract) .

97 CHAPTER 5. HOME IMPROVEMENT 65 HOME WARRANTIES Home warranties generally are not transferrable, except as provided . Home Roof Warranties of the California for home roof warranties Civil Code provides : n For any contract subject to this chapter that is entered into o or after January 1, 1994, the warranty obligations shall inure to the benefit of, and shall be directly enforceable by, all subsequent purchasers and transferees of the residential structure, without limitation, unless the contract contains a clear and c onspicuous provision limiting transferability of the Civil Code §1797.62 ) . warranty ( HO REGISTRATION ME IMPROVEMENT SALESPERSON , or executes home improvement Anyone who solicits, sells, negotiates the contracto r’s normal contracts for a licensed contractor outside of less of the dollar amount of the se contracts, place of business, regard must be registered with CSLB alesperson as a Home Improvement S (HIS) . Beginning January 1, 2016, the HIS registration process underwent an important change. SB 561 allow s hom e improvement salespersons to file a single registration with CSLB to , while still permitting them e employers. This the previous represent multipl new law removed requirement that an HIS register separately with CSLB for each him o r her. contractor that employed In addition to the single registration, the new law requires licensees to notify CSLB in writing prior to employing an already registered HIS, and to notify CSLB in writing when employment of a registere d HIS ends. These new notification forms are a vailable on CSLB ’s website: www.cslb.ca.gov (search: HIS forms) . registration requirement? Who is exempt from the HIS Salespersons who only sell goods or negotiate contracts at a fixed business establishment where th e goods or services are exhibited or considered home improvement salespersons. offered for sale are not The official personnel listed in CSL B’s records for the contractor license also are exempt from registration requirements. This includes individual cont qualifying individuals, partners, officers of the ractors, corporation, and responsible managing officers, members, managers or employees of an LLC . Other exemptions from the registration requirements include pe ople who contact prospective buyers for the exclusive purpose of

98 66 SECTION II. HOME IMPROVEMENT scheduling appointments for a registered home improvement bona fide service or repair people who are employ ed salesperson , and limited by a licensed contractor and whose repair or service call s are to the service or repair initially requested by the buyer. May a home improvement salesperson work for more than one contractor? allows home improvement salesperson Yes. work for any SB 561 s to while number of contractors and sell a variety of goods and services . Under the new law, licensees must using a single registration notify CSLB in writing prior to employing an already registered HIS, and . notify CSLB in writing when employment of a registered HIS ends of a contractor who employs a home improvement The license t and active. must be curren salesperson What are the qualifications for a home improvement salesperson? east 18 years of age. A home improvement salesperson must be at l educational, residency There are no requirements. , or experience How do I apply for registration? ine easy -fill “Application for Registration as a Home Complete an onl Improvement Salesperson ” by visiting www.cslb.ca.gov or obtain a copy of the application by it from www.cslb.ca. gov or by downloading (800) 321- . calling CSLB (2752) Then, do the following: F ollow all instructions on the application ; and ● ● Submit the required nonrefundable, nontransferable $83 and your application to the CSLB application fee of headquarters office. May I beg in working as a n HIS as soon as I have submitted my registration application and fee to CSLB? No. CSLB must review y a registration our application and issue legally work as a home improvement number before you may salesperson. How long will it take to beco me registered? CSLB ’s processing times vary depending on its workload, staff vacancies, etc. CSLB ’s website includes a proc essing time chart that lists , including HIS the date of documents currently being processed applications and renewals. The char t is u pdated weekly and helps keep applicants informed on current processing times. Visit www.cslb.ca.gov (search: processing times).

99 CHAPTER 5. HOME IMPROVEMENT 67 When does my HIS registration expire? years from th The HIS registration expires two e last day of the (2) month in which it was issued. CSLB will mail a renewal application to your address of record several weeks before your registration expires. Upon verification of the renewal, a new registration certificate will be mailed showing the new e xpiration date. If your address has changed since your registration was issued or last renewed, it is your responsibility to notify CSLB in writing within 90 days of the change. If you have not received an advance notification of renewal, notify . This CSLB (3) weeks before your should be done no later than three registration expires. Is a contract sold or negotiated by an unregistered salesperson enforceable? The law does not specifically state that the contract would be unenforceable, but since other facto rs involved could have a bearing on its enforceability, questions about specific contracts should be P Code s ection 7154, a referred to an attorney. According to B& contractor who employs an unregistered person to negotiate home improvement contracts is sub ject to disciplinary action by the Registrar. Furthermore, B&P Code s ection 7153 states that it is a misdemeanor for a person to act as a home improvement salesperson without b (HIS) eing registered. In addition to possible criminal action, the same section provides t hat an administrative citation may be issued to any unregistered person who engages in the HIS . occupation ections 7150 through For additional information, refer to B&P Code s 7173 in Chapter 12 of this book. REGISTRAR -APPROVED JOINT CONTROL AGRE EMENTS California Business & Professions Code provides for the use of a joint control approved by the Registrar of Contractors “covering agreement full performance and completion of the contract” as an alternative to certain contract requirements. When a j oint control is used, no schedule of payments is required in the contract. A joint control is a builder ’s construction control service , which acts as an escrow holder of a consumer ’s money. A joint control company manages the disbursement of funds to preve nt the contractor from being paid more than the value of the work already completed. A joint control also safeguards the con sumer ’s property from mechanics liens

100 68 SECTION II. HOME IMPROVEMENT by requiring the contractor to supply lien releases as progress payments are made. A joint con trol normally includes an analysis of the contract and building plans or specifications, breakdown of cost s, and the preparation of an account from which the funds will be disbursed scheduled progress payments. An addendum through ee page 69) (s must be inc orporated into joint control agreements for it to be considered approved by the Registrar . Inclusion of the addendum should help both contractors and consumers. CSLB does not license joint control c ompanies, nor does CSLB have legal jurisdiction over jo int control company activities, nor does it maintain lists of approved joint control companies nor monitor their activities. Registrar approval is implicit if the addendum is used. Responsibility for incorporating the addendum in agreements rest s the joint control companies. Contractors and consumers solely with should compare any joint control agreement with the followi ng addendum to ensure that the C ontrol supplies the services required for approval. NOTE: The last paragraph in the joint control addendum pe rtains to home improvement contracts other than swimming pool contracts. The same d own payment provisions apply to swimming poo ls as to other home improvement projects : $1,000 or 10 percent of the total contract price, whichever is less .

101 CHAPTER 5. HOME IMPROVEMENT 69 JOINT CONTROL ADD ENDUM Addendum to Control Agreement/Escrow Instructions This addendum is hereby incorporated into and becomes a part of the Control Agreement attached hereto , dated _____________. 1. Should any of the terms or provisions of the contract between Owner and C ontractor or of the contract into which this Addendum is incorporated conflict with any of the terms or provisions of this Addendum, then the terms of this Addendum shall prevail. 2. Control agrees to control and disburse funds in the following manner: a) Supplier or subcontractor submits to contractor of invoices requesting payment; duplicate copies b) If payment is justified, based on work completed, Control accepts disbursement order or voucher in favor of payee for net amount; c) After signing by the co ntractor and the payee concerned, order for payment ( together with copies of invoices, unconditional lien releases and/or other substantiating data ) is delivered or mailed to the Control for payment. 3. Prior to issuing payment, Control agrees to verify: hers have authorized signatures; a) That all vouc b) That adequate unconditional lien releases have been submitted in writing; and c) That sufficient funds are on hand to pay the specific invoice(s) submitted. 4. Prior to issuing final payment, Control agrees to verify that project has passed final inspection by local building authorities, unless the scope of the contracted project does not require a final inspection. 5. After verification of the above, checks shall be made payable to the supplier or subcontr actor, or to the prime contractor and supplier or subcontractor, jointly. 6. Control agrees that in no event shall it disburse payments in excess of 100 percent of the value of the work

102 70 SECTION II. HOME IMPROVEMENT performed on the project at any time, excluding finance charges. e funds from this account shall be used only for the 7. Th project described in the contract. Control warrants that work and material paid for by Control has been provided. 8. If this agreement is terminated for any reason prior to disbursement of all monies pay able under the contract between Owner and Contractor, all subsequent disbursements to Contractor shall conform to the requirements of Business and Professions Code section 7159. requires that all change orders NOTE: B&P Code section 7159 signed by all parties. be in writing and SO AGREED this _______ day of _____________________, 20_______. _________________________________ __________________________________ CONTROL OWNER _________________________________ __________________________________ CONTRACTOR OWNER Contractors who furnish a joint control as part of the terms of a home improvement contract should be aware that the law prohibit s them from having any financial or other interest in the joint control s responsibil ity to determine if company. Also, it is the contractor’ the above addendum is included in the control agreement. If an approved joint control or bond covering the complet e contract is not included with a home improvement contract, the contractor may not require a down payment in excess of $1,000 or 10 percent of the must contain total contract price, whichever is less. The contract also a schedule of payments stated in dol lars and cents , specifically corresponding to the work or services to be performed or the materials and equipment to be supplied. Also, no payments other than the down payment can exceed the value of the work (excluding finance charges) performed at any ti me on the project.

103 CHAPTER 5. HOME IMPROVEMENT 71 MECHANICS LIEN WARNING previously d the The “Mechanics Lien Warning” replace used “Notice to Owner.” This notice describes, in non -technical language, pertinent provisions of the state ’s mechanics lien laws that specify the rights and re sponsibilities of both the property owner and the contractor. The Mechanics Lien Warning must be a part of any home improvement contract, including swimming pool contracts. This notice is not required for a contract that meets the service and repair contra ct requirements. Anyone who helps improve property, but is not paid for performed , may record what is called a mechanic s work or supplied materials property. A mechanics lien against that lien is a claim, like a e equity loan, made against t property and mortgage or hom he recorded with the county recorder. Even if the contractor is paid in full, unpaid subcontractors, improve the property may record suppliers, and laborers who helped s liens and sue the property owner mechanic in court to foreclose a f a co lien. I could be forced urt finds the lien valid, the property owner to pay additional money or have a court officer sell the home to pay the lien. Liens also can affect personal credit records . 20- DAY PRELIMINARY NOTICE ien, each subcontractor and To preserve their right to record a l must provide the property owner with a material supplier document called a “20- Da y Preliminary Notice .” This notice is not a lien. The notice let s the property owner know that the person the notice has th e who is sending to record a lien on the right property if he or she is not paid. The Preliminary Notice can be sent up to 20 days after the subcontractor starts work or the supplier provides material. The laborers do not se nd 20 -Day Preliminary prime contractor and Notices; c on tractor law assumes the property owner already know s they are improving the property. s, subcontractors , and mater ial suppliers who A list of all contractor work on a project can be provided to the property owner to help avoid confusion . PAY ING WITH JOINT CHECKS Joint checks are a protective method to make sure the subcontractor or material supplier is paid. When the contractor tells the property owner that it is time to pay for the work of a subcontractor or supplier who has sent the property owner a Preliminary Notice, a joint check

104 72 SECTION II. HOME IMPROVEMENT payable to both the contractor and the subcontractor or material is written to confirm payment . supplier (search: For other ways to prevent liens, visit www.cslb.ca.gov (800) 321- CSLB (2752). prevent liens) or call The Notice o f Mechanics Lien must be served on the owner or person believed to be the owner of the property , on the construction lender , or on the original contractor, and a “proof of service affidavit” to that person(s) must be completed and signed by the person serv ing the Notice of Mechanics Lien. Failure to serve the mechanics lien and confirm a proof of service affidavit makes the mechanics lien unenforceabl e.

105 SECTION III. BUSINESS MANAGEMENT Chapter 6. Managing a Business Chapter 6. Managing a Business The construction industry , while one of the largest segments of the economy, includes many small businesses . This chapter will focus on business and managemen t principles that may help you manage a successful business. This chapter will show you how good management and accounting techniques can be applied to the construction industry. The numbers used in the examples were chosen to illustrate the average succ essful small contracting business. The numbers and ratios provide only a starting point for your job of managing. THE CONTRACTOR MANAGER The average contractor has knowledge and skills in many of the phases of construction learned from firsthand experience . However, when starting a business, the contractor must become a business manager , often without experience or training. Statistics show that 90 percent of bankruptcies and business closures result from poor management. The specific reasons include an inability to plan, manage, and control business affairs (managerial -the -job supervisory experience or the competence); insufficient on inability to manage employ lack of ees (people competence); and knowledge about business practices (technical competence). Hard work is not enough. The main duties of the contractor who is also a manager are to plan and direct the major activities of the business; coordinate employee work and materials; and train, direct, and advise employees in supervisory and non -supervisory positions. The key to successful business management is the ability to make informed decisions. Information must be current an d accurate. The manager is respo nsible for making sure that the information that informs these is complete and accurate. decisions 73

106 74 SECTION III. BUSINES S MANAGEMENT PRINCIPLES OF MANAGEMENT The most difficult part of changing roles from employee to manager clear understanding of what is important for may be in developing a successful management. Management theory has been divided into two different areas: functional and behavioral. The Functional Areas of Management Include: Planning ● Good planning is one of the most important, but most , management duties. neglected s of information Large amount from within the business must be put together with ide the business to schedule business information from outs activities. Planning is essential to make sure that resources, money, people , and equipment are available to the business in the right amounts and at the right time. ● Decision -Making/Delegation Employees should be tra ined and encouraged to assume responsibility for routine decision -making. The manager ’s responsibility is to make sure that these decisions fit together with the plans for the project and the business as a whole. ● Standardization ncy, it is important to sta ndardize For the greatest efficie for routine, ongoing operations. After you determine methods the best method, it should be adopted as the pattern for similar operations in the future. Standardization also makes it easier for decisions to be made at low er levels. ● Controls Controls are established to inform the manager when the is different from what was expected. actual business outcome Controls should be designed to warn the manager before the differences become too great. The manager can both check on the progr ess of the business and evaluate overall performance by comparing results with plans. Effective controls must be established and rigidly enforced. The manager can then adapt to change rather than re sist it . The functional areas of management relate mostly to the technical side of business. The people or behavioral side of busine ss is equally important and cannot be ignored.

107 CHAPTER 6. MANAGING A BUSINESS 75 The Behavioral Aspects of Management Include: Human Relations ● Management should always remember to consider each problem from the other person ’s point of view. The success or failure of a business depends largely upon the proper handling and treatment of the personnel. Cooperation ● Cooperation amon g individuals in any group must be encouraged by management. This ensures that their combined efforts, working toward a common goal, will produce far greater results than the combined total produced by each working as an individual. The spirit of cooperation is usually inspired by the conduct of the manager. Cooperation cannot be imposed; it can only be achieved by leadership. ● Responsibility Each individual in an organization should be responsible for one or more phases of operation. These responsibilities should be clearly understood, and the individual should be given the authority to carry them out and be held accountable for their completion. One of the most consistent failings of management is neglecting to instruct personn el about their responsibilities, and delegating ad equate authority to exercise these responsibilities. Communication ● Effective communication is an imp ortant part of any sound organization. All personnel are entitled to be advised about any subjects concern them individually. Good communication that improves morale and productivity. ● Executive Ability As the size of the contracting business increases, t he contractor must spend more time and energy in the role of a manager. Executive ability can be realized to the fullest extent only when the manager is relieved of all unnecessary detail or routine work. When standards of performance are established, defi nite plans and policies formulated, and adequate controls installed, the manager may focus attention on those matters that are the exception to the normal operation. Time spent on the job should be limited to cases where it is necessary. Guidelines Manager s can test their observance of the principles of management by reviewing the following questions:

108 76 SECTION III. BUSINES S MANAGEMENT Are all jobs planned carefully in advance? ● Is each worker in the right place? ● Is each worker sufficiently trained for the job assigned? ● Are the best p ossible practices established as standards for all ● routine operations? ● Is the business capable of rapid adjustment to changing conditions? Does each worker have the required materials, supplies, and ● equipment to complete the job effectively? ● Is each worker directed by one supervisor only? ● Have all overlapping authority and responsibility been eliminated? ● Does every worker clearly understand the assigned task and the start and completion schedule for the task? liminated? ● Has all duplication of effort been e Management should be able to answer “yes” to all of these questions. Any hesitancy or “no” answer puts the immediate obligation on the manager to review the situation and, if necessary, take corrective action. ESTABLISHING YOUR BUSINESS Forms of Business The legal form of the business will determine the available sources of financing, the extent of personal liability, the extent of control , and the tax liabilities. The legal form may change as the business grows and should be reviewed as financin g requirements change. A sole owner often lacks the personal capital sources necessary to sustain growth. The partnership is usually created to expand the source of funds. Continued growth and the resulting larger financing needs may lead to incorporation , which, in turn, provides access to external funds. ● Sole Ownership Sole ownership (often called personal ownership or sole proprietorship) is the simplest form of business organization and relies primarily on the financial resources available to an individual. The owner has sole responsi bility and complet e control. He or she must obtain all the financing and is personally liable for any claims against the business.

109 CHAPTER 6. MANAGING A BUSINESS 77 Sole ownership is easy to set up and is subject to minimum regulations. For tax purposes, business income is reported as personal income. Sole ownership appeals to individuals who (See Chapter value smallness, simplicity, and personal control. .) 2 for information about maintaining a sole ownership license General Partnership ● s use the financial and personal resources General partnership of two or more individuals who share in the ownership and A general partnership requires operation of the business. lawy registration of the name of the business. Consult a er to formalize the rights and responsibilities of the partners regarding management and profit -sharing. Under most circumstances, a partnership agreement terminates with the death or withdrawal of a partner or the ip agreements avoid addition of a new partner. Some partnersh termination by entering into a prior written agreement allowing the partnership to continue. Howe ver, when a contractor license is issued to a general partnership and a general partner leaves for any reason or the partnership wants to a dd another general partner, the license is cancel ed. (S ee Chapter 2 for a discussion of partnership and ways to continue as a partnership for a short period of time after cancellation.) The partnership is not an entity separate from the partners. Each par tner may be personally liable to the extent of his or her personal assets and may be legally responsible for the negligent acts of the other partner(s). For tax purposes, an individual’ s share of the partnership income is taxed as personal income. ● Limited Partnership The limited partnership allows investors to join in a partnership without taking full responsibility for the business. The limited partner risks only his or her original investment. In this case, there must be at least one general par tner who runs the business and who remains fully responsible for the liabilities of the business. (S ee Chapter 2 for a discussion of what to do if a limited partner leaves the partnership.) ● Corporation A corporation is a separate legal entity created by the government. It can make contracts, be held legally liable, and is taxed. The corporation may raise capital by selling stock to private investors or to the public. Stockholders are usually not liable for claims against the corporation beyond their orig inal

110 78 SECTION III. BUSINES S MANAGEMENT investment. Creditors may claim only the corporate assets, although corporate officers may be personally liable. Incorporation begins by filing articles of incorporation with the Secretary of State. The corporation has no fixed life. The death of a st s personal investment will not ockholder or sale of one’ disrupt the business. “S” Chapter Corporation ● “S” corporations must meet certain restrictions and can report the business income as individual income. This benefit is designed to remove ations from the decision tax consider regarding the form of business organization for the small business. The business can operate in corporate form to reduce ’s liability, but is taxed like a partnership. Since the the owner taxed separately , only an information return corporation is not be filed. For the similar to the partnership tax return needs to small business, this avoids the double taxation of corporate income that results when the corporation is taxed on earnings and the owners are taxed on dividends distribute d by the corporation. ● Limited Liability Company generally offers A California limited liability company (LLC) liability protection similar to that of a corporation but is taxed differently. Domestic LLCs may be managed by one or more managers or one or m ore members. In addition to filing the applicable documents with the Secretary of State, an operating agreement among the members as to the affairs of the LLC and the conduct of its business is required. The LLC does not file he Secretary of S tate but the operating agreement with t maintains it at the office where the LLC ’s records are kept. To form an LLC in California, Articles of Organization (Form LLC –1) must be filed with the California Secretary of State ’s office. Inventory of Resources You should cons ider many details before establishing a contracting business, beginning with the understanding that the company should be managed by individuals who have technical expertise and relevant experience. Your careful consideration of the following questions wil l help you to identify common obstacles to the suc cessful operation of a business: ● What financial resources do I have and what financial resources will be required? Funds must be available to

111 CHAPTER 6. MANAGING A BUSINESS 79 purchase equipment, rent office space , and meet payroll and personal living expenses until income is received. ● —risks that include the cost and Am I willing to take risks availability of materials and services, weather, delays because government regulation and required inspections, and of reliance on the expertise of architects? What resources do I have to attract sufficient business? Is the ● el of building activity in the area high enough to support a lev new business? What type of contracting business do I specialize in? Will it be ● custom building, speculative building, remodeling and home improvement, or general contracting? Who will handle the bookkeeping and record keeping that is ● essential for planning, coordination , and control? ● Do I have the resources to handle personnel, financial, and legal reporting requirements? the necessary resources before It is important for you to have ing to establish your business. attempt Taxes and Permits The owner(s) of the business is required to pay taxes and fees at the federal, state, and local levels. If the business is a sole ownership or partnership, estimated federal and state income taxes must be prepaid or paid quarterly. An Employer Identification Number (EIN) must be requested from the Internal Revenue Service, and the federal income and Social Security taxes withheld from employee wages must be paid quarterly, monthly , or semimonthly , as require d. The contractor must register with the Employment Development Department, obtain a state EIN, and pay state payroll and unemployment insurance taxes for employees who earn over $100 in a calendar quarter. California requires a Seller ’s Permit for busines ses that sell tangible personal property. The State Board of Equalization can require a deposit of the estimated sales tax for the first six months. The contractor must collect the required sales tax from the customer unless the tax on materials was alread y paid at the time of purchase. Before starting a job, determine if city or county permits are required . Business licenses and construction permits are a cost of doing

112 80 SECTION III. BUSINES S MANAGEMENT business, a fact that must be recognized at the outset. In addition, the contractor must be familiar with zoning laws and building codes. Bonds A requirement for bonding is generally mandatory for large jobs , such as savings and loans, financed by institutional lenders insurance companies , or commercial banks. In addition, many owners , as well as other contractors , impose bonding and len ders requirements. Bonds can be obtained from bonding companies for a percentage of the contract price, usually in the 1 to 2 percent range. This requirement is a cost of doing business that d should be recognize follows when the bid is submitted. Bonds may be classified as : Performance bonds guarantee the project ’s completion ● according to the building plans and specifications. If the job is abandoned or the work unacceptable, the bonding company has the option of hiring another contra ctor to complete the work or settling fo r damages. ● Payment bonds assure the property owner that no liens for labor and materials will be filed against the property. guarantee both job completion and payment ● Contract bonds of all labor and materials. In general, unless the bonding company has taken responsibility for completing the project, the bonding company will not have to pay more than the face amount of the bond. The new contractor should be aware that bonding requirements may exclude the new business from bidding on desired jobs. Bondin g companies will not take risks without verifying the technical and resource capabilities of the bonded contractor. It is essential to practice sound business management techniques if you hope to qualify for bonding in the future. Contractor License Bonds Contractor license bonds are different from performance, payment, and contract bonds. Each licensed contractor is required to carry a contractor bond. Unlike payment, performance , and contract bonds , which are usually written to cover specific projects, a contractor license bond is written to cover any project the contrac tor agrees to perform. As of January 1, 2016, the contractor license bond amount was raised from $12,500 to $15,000. The bond for qualifiers remains $12,500.

113 CHAPTER 6. MANAGING A BUSINESS 81 Limited Liability Company Sur ety Bond ,000 contractor bond) is A $100,000 surety bond (in addition to the $15 required for the issuance, reissuance, reinstatement, reactivation, and renewal of an LLC license for the benefit of any employee or worker damaged by the LLC ’s failure to pay wages, interest on wages, or fringe benefits, as well as other contributions. ( See B&P Code §7071.6.5. ) Insurance Liability Commercial General Just as an accident can happen to anyone, everyone makes mistakes. Many California contractors address accidents and mistakes through general commercial (CGL) i nsurance. As the International liability Risk Management Institute explains in its Guide to Construction , CGL insurance protects “the insured contractor from Insurance r than employees) for bodily liability to members of the public (othe injury, property damage, or personal injury caused by virtually any activity. ” Thus, CGL insurance can shift the risk of liability for accidents and mistakes from the contractor to the insurance company. The insurance company: ● Provides a claim -handling process ; ● Defends the contractor against insurance claims ; ● ; and Pays claims for covered damages ● Pays for immediately necessary medical treatment, even when the contracto r is not ultimately found liable . ’ state license l aw does not require contractors to carry Contractors insurance unless their business entity is a limited liability CGL company (see below ). Even though it is not universally required by licensing law, commercial property owners routinely require the contract ors they hire to carry CGL insurance . On the other hand, when a homeowner hires a contractor to perform home improvement work, the homeowner rarely requires the insurance . Most homeowner s assume contractor to carry CGL that a contractor would not work on the house without being insured. T o alert homeowners to the value of CGL insurance, the California Code of Regulations (CCR) section 872(a) t ook effect in 2002 requiring home impro vement contractors to: ● Disclose in writing if they do or do not carry comm ercial general liability insurance.

114 82 SECTION III. BUSINES S MANAGEMENT insurance , provide the homeowner with If they do carry CGL ● , in the name and telephone number of the insurance company writing , so the homeowner can verify coverage. This requirement change d under the new home improvem ent ee Chapter 5) . contract requirements , which took effect in (s SB 30 , requires contractor s to provide CGL insurance information to 2006 homeowners as part of the contract. $1 Million Liability Insurance Minimum Liability insurance with the aggregate limit of $1 million for licensees with five (5) or fewer persons listed as members of the personnel of record is required for a limited liability company; plus, an additional in insurance is required for each additional member of the $100,000 personnel of record, not to exceed $5 million total. ( See B&P Code §7071.19 .) see “Risk For more information about the risks covered by insurance, . Management” on page 107 ’ Compensation Insurance Workers The California w orkers insurance laws are ’ compensation administered by the s tate Department of Industrial Relations through the Division of Workers ’ Compensation. The following paragraphs highlight some important provisions of w orkers ’ pensation law found in the California com Labor Code. Workers ’ Compensation Defined ornia workers ’ compensation law establishes a no -fault Calif insurance plan purchased by the employer -cont ractor and tate to: administered by the s ● Limit the employer -contractor’ s liability and possibly avoid costly lawsuits; and ● ker receives prompt and Guarantee that an injured wor related complete medical treatment and specific benefits for job- injury or illness. Under some circumstances, an employer- tractor can be sued for damages. F or example, the harmed con parties may sue if an employee is injured when the employer is illegally uninsured, or if the employer conceals the existence of an employee’ s injury and its connection with employment. Check with the Department of Industrial Relations , www.dir.ca.gov, for more information. Employer Liability For a work -incurred injury or illness, a n employer -contractor is REQUIRED to provide weekly benefit payments (indemnity) and

115 CHAPTER 6. MANAGING A BUSINESS 83 necessary medical and hospital treatment. This liability of the employer extends to employed relatives on the same basis as any other employee. If the employer has one or more employees, even part -time, he or she is required to insure for w orkers ’ compensation claims. An “owner - operator” or “independent contractor” should consult an attorney to determine insurance liability and should pay particu lar attention to §2750.5. Labor Code Workers ’ Compensation Insurance Coverage The employer -contractor may provide insurance protection in one of three ways: ● ’ compensation A standard approved policy of workers ier; insurance available through any licensed carr ● Securing a permit from the Director of the s tate Department of -insurer (Labor Code Industrial Relations to become a self ; or §3700) ● Participating in a collectively bargained alternative dispute resolution program recognized by the Division of Work ers ’ Compensation (Labor Code § 3201.5) . In general, if a contractor carries compensation insurance, the compensation insurance company assumes the obligation of the orkers laws. Some exceptions contractor under the w ’ compensation include penalties based on : The contractor ’s serious and willful misconduct (Labor Code ● ; §4553) ● Injury to an illegally employed person under 16 years of age (Labor Code §4557) ; and ● Instances where the employer discriminates against an employee because an industrial injury claim was filed (Labor §132a ). Code Reporting Name of Insurer Every licensed contractor must report , in writing , the name and address of the insurer carrying workers ’ compensation on his or her employees to CSLB within 90 days after the issuance of any policy. He or she must send a copy of this report to the insurer. Failure to make such a report is a misdemeanor (Business and Professions Code §§7125- 7126) .

116 84 SECTION III. BUSINES S MANAGEMENT Reporting Occupational Injury or Illness An employer -contractor MUST file a complete report of every ● that employee ational illness occupational injury or occup results in lost time beyond the date of injury or illness, or which requires medical treatment beyond first aid, with the Department of Industrial Relations through its Division of Labor Statistics and Research or, if an ins ured employer, with (Labor Code § 6409.1) . the insurer The report filed shall be the original of the form required by eport shall be the Division of Labor Statistics and Research. A r has, or is alleged filed concerning each injury and illness that to have, arisen out of and in the course of employment, within five days after the employer obtains knowledge of the injury (5) or illness. Each report of occupational injury o r occupational illness must indicate the Social Security number of the injured ( Labor Code § 6409.1 employee . ) The insured employer must file with his or her insurer a complete report of every injury or illness to each employee. If a report is not filed wi th the insurance carrier, the Workers ’ Compensation Appeals Board may issue an order directing the insured employer to report the injury or illness within five (5) days. Failure of the employer to comply with this order may be punished a s contempt (Labor C ode § 3760) . ● In every case involving a serious injury or illness, or death, IN ADDITION TO the report described above, the employer must report immediately by telephone or email to the Division of Occupational Safety and Health (Labor Code § 6409.1) . yee Notification and Posting Requirements Emplo Every employer -contractor subject to the provisions of the w ’ orkers compensation laws MUST: ● Give every new e mployee, either at the time of hiring or by the end of his or her first pay period, written notice of th e employee’ s right to receive workers ’ compensation benefits should he or she b while working for the e injured on the job employer. The content of the notice must be approved by the Administrative Director of the Division of Workers ’ Compensation and must contain the information listed in Section 9880 of CCR Title 8. The notice shall be available in both English and Spanish when ther e are Spanish -speaking . employees ( Labor Code §3551) ● Post conspicuously, in a location frequented by employees, a Notice to Employees poster. The Notice to Employees must be

117 CHAPTER 6. MANAGING A BUSINESS 85 posted in English (and Spanish where there are Spanish - speaking employees). The Notice to Employees poster must contain the informati Title 8 or on listed in Section 9881 of CCR the employer may post the Administrative Director ’s approved Notice to Employees poster provided in Section 9881.1 of CCR Title 8 [DWC 7 (8/1/04)]. Failure to keep such a notice conspicuously posted is punishable as a misdemeanor (Labor §3550) . Code ● Post information regarding protections and obligations of employees under occupational safety and health laws, and (Labor Code § 6408) related citations (See Chapter 7 in this . book for details.) is a victim of workplace crime wri tten ● Give any employee who notification that the employee is eligible for workers ’ (Labor Code compensation . §3553) ● The contractor or his or her insurance company should notify an employee, in case of an injury, of a physician who will provide professional care. (“Physician” as used here, includes physicians and surgeons, psychologists, acupuncturists, optometrists, dentists, podiatrists, and osteopathic and chiropractic practitioners, each in his or her respective field.) hich Workers May Be Entitled Benefits to W ● Medical Tr eatment 2004, employer s have been required to Since authorize medical treatment consistent with the American College of ’s (ACOEM) Occupational and Environmental Medicine Occupational Medicine Practice Guidelines, Second Edition , or n schedule adopted by the the treatment utilizatio Administrative Director to cure or relieve the injured worker from the effects of his or her injury. Within one (1) working day of receiving the employee’ s claim form , the employer must authorize treatment for the alleged industri al injury and must continue to provide the treatment until the date that liability for the claim is either accepted or rejected by the employer. Until the date the claim is accepted or rejected, liability for medical treatment is limited to $10,000 ( Labor Code §§4600, 4604.5, 4610, 5307.27, and 5402) . ● Supplemental Job Displacement Benefit The worker may be entitled to a supplemental job displacement benefit if he or she cannot return to work for the employer within 60 days following the end of the temporary disability period. The amount of the benefit is based on the employee’ s

118 86 SECTION III. BUSINES S MANAGEMENT permanent disability level and must be used for retraining, Labor Code skill enhancement, or job placement assistance ( . §4658.5) Temporary Disability ● The worker also is entitled to temporary disability payments while recoverin g from the injury. These weekly payments begin after the third day of disability and are based upon two -thirds of the weekly earnings, up to a legal maximum . The amount of tate law. The compensation these payments is determined by s be able to provide information on insurance company should current rates. Where temporary disability extends beyond 14 days or requires overnight hospitalization, the three -day waiting period is eliminated (Labor Code §§4453, 4650, 4652 , . and 4653) Permanent Disability ● If a permanent disability arises out of an industrial injury, the worker is entitled to compensation based on the rated degree of disability. Benefits are based on the earning of the disabled worker, and the range of benefit amounts are set by s tate law (Labor Code §4453) . ● Death Benefits If the injury causes death, a benefit is payable to those dependent on the deceased for support at the time of injury. In addition, burial expenses are allowed up to a prescribed amount (Labor Code §§4701 and 4702) . Compensation for Serious and Willful Employer ● Misconduct The amount of compensation otherwise recoverable can be increased one -half, together with costs and expenses not to exceed $250, where the employee is injured by reason of the serious or willful misconduct of the employer or his or her managing representative, partner, executive, managing officer , or general superintendent. The insurance company is not liable for the increase and is not permitted to cover it under the licy (Labor Code §§4550 and 4553; Insurance Code insurance po §11661) . Penalties for Noncompliance ● Failure to secure payment of compensation as r equired by law is a misdemeanor (Labor Code §3700.5) . ● A contractor’ s license may be suspended or revoked by the Registrar of Contractors if the contractor fails to secure the

119 CHAPTER 6. MANAGING A BUSINESS 87 payment of compensation ss and Professions Code (Busine . §7110) The Department of Industrial Relations ’ Division of Labor ● Standards Enforcement also may take action against a contractor who has failed to secure the payment of compensation. This may include: ○ Issuing a “ Stop Order,” prohibiting the use of employee ( Labor Code §3710. labor until insurance is provided ; 1) ○ Obtaining a restraining order in s uperior court against the (Labor Code ; contractor §3712) Issuing a penalty assessment order ○ ay be either the (Penalties for an uninsured contractor m greater of twice the amount the contractor would have paid or in premiums during the period he or she was uninsured, $1,000 per employee employed during that same period. If ’s uninsured status is discovered following the contractor the fil ing of a claim for compensation, the penalty shall be either $2,000 for each employee employed on the date of injury in non -compensable cases, or $10,000 for each employee in compensable cases ( Labor Code ) ; or §3722 ○ Recording a lien against the real property and personal property of the contractor as a security interest ( Labor §3727). Code If a contractor willfully fails to provide compensation insurance ● an employee and an injury occurs, the contractor must pa y for the disability compensation plus a penalty of 10 percent and attorney fees. He or she must also supply all necessary medical treatment. In addition, he or she is liable for damages in a civil action, with a legal presumption that the injury was caused by the employer ’s negligence. Contributory negligenc e of the employee is no defense (Labor Code and §§3706, 3708, 4554, . 4555) Every employer, and every employee having direction, ● management control , or custody of employment of any other employee, who willfully violates any occupational safety or health standard that causes the death of any employee or the prolonged impairment o , upon f the body of any employee shall conviction , be punished by a fine and or impr isonment ( Labor Code § 6425 ) .

120 88 SECTION III. BUSINES S MANAGEMENT Additional Information Department of Industrial Relations ● Division of Workers ’ Compensation th 1515 Clay Street, 17 Floor 94612 Oakland, California (510) 286- 7100 Visit the Division ● www.dir.ca.gov/dwc . ’s website: ● Call (800) 736- 7401 for recorded messages. ’ Compensation publishes an ● The Division of Workers s Guide that Employer’ can be requested by calling one of the numbers listed above. FINANCIAL RESPONSIBILITY AND CONTROL Finance has frequently been called the “language of business.” This is because financial statements are a method of communicating business information. F inancial statements contain the information , and control. The foremost necessary for planning, coordination objective of the accounting process is to arrive at an estimate of the periodic income and expenses of a business. With this information, the owner can make the decisions th at will increase the potential for profit. In this section, an attempt is made to keep the definitions and examples as simple as possible, yet realistic enough to be useful . Records Every business must keep records. Good records are essential for effective management. They are required when seeking outside financing and, in some cases , are mandated by law. State and federal agencies frequently specify that certain records must be maintained and made available for government audits and to substantiate tax reporting. For a description of the records specifically required under contracto rs’ state license law, see Business and Professions Code section 7111. Accurate accounting records must be kept to provide the base to construct financial statements. The inform ation summarized in these statements highlight s the total operational costs, individual job costs, and other costs that affect your ability to make a profit. Accurate records also provide information on cash receipts and a basis for control of disbursement s. The contractor can, by reviewing these records, determine the cash flow requirements of other jobs that he or she has completed to help estimate the cost s of future jobs.

121 CHAPTER 6. MANAGING A BUSINESS 89 Accounting Methods Is it necessary for contractors to understand detailed accounti ng methods? In general, no ’s role is not to compile the . The manager statements, but rather to use these statements as tools of management. It is not necessary for the contractor to be an expert in , as a manager , he or she mu st understand an d be able accounting but the statement numbers . to take action based on rstand the Fundamental Terms of A Unde ccounting ● Cash Basis of Accounting Under the cash basis of accounting, revenue is recognized when h is actually received, and expenses are deductible in the cas year paid ( n in a different period to unless they should be take clearly reflect income ). A cash basis of accounting may be appropriate where no prepaid expenses (e.g., insurance, rent), depreciable assets, or inventories exist , and where revenue is received during the accounting period. Information regarding cash flow, as provided by the cash basis of accounting method, can be valuable in judging the ability of the business to pay its debts, to finance replacement of productive assets, and to expand the sco pe of business operations. However, a strict cash method neither records receivables nor payables since these items have not been received or disbursed. This failure to match income and expenses for a given accounting period restricts the able to the manager using a cash basis of information avail accounting. Additionally, where depreciation and inventories are utilized, the accrual method is necessary to accurately re flect expenses and income. For f ederal income tax purposes , the accrual method is required when inventories are utilized. The net increase or decrease in cash during a given period is not very useful in evaluating a company ’s operating performance because, although progress payments come in during the course of a job, final profit cannot be det ermined until after the job is completed. For these reasons, the cash basis of accounting is not recommended for contractors. ● Accrual Basis of Accounting The accrual basis of accounting recognizes revenues when earned and expenses when incurred, regardless of when

122 90 SECTION III. BUSINES S MANAGEMENT payment is received or made. Thus, this method allows the matching of revenues and associated expenses for individu al periods of time. In a contracting business that has qualifying long -term projects, the accrual basis of accounting is often further modified using two methods: 1) the percentage of completed contrac t . completion and 2) the The percentage of completi on method will report profits and 1) losses regularly on the basis of actual work accomplished on each job. For example, if the work performed in a given year is estimated to represent 50 percent of total performance under contract, then 50 percent of the tot al estimated revenue and profit is considered earned. 2) The completed contract method allows for the gross income and related costs for each contract to be reported in the year in contract is completed. which such a ● Financial Statements The balance she et and income statement summarize the firm ’s internal data. These statements , in turn , provide the information for ratio analysis that highlights the strengths and exposes the weaknesses of the company. ● Balance Sheet The balance sheet is a statement of financial condition of an individual business at a certain point in time. The balance sheet is often referred to as a “snap shot.” The accountant will usually provide two balance sheets, one for the current year just ending and another for the prior year. An example of a balance sheet for a corporation is shown on page 92. This balance sheet lets the reader compare where the company stood at the end of each of the past two years. The balance sheet is a statement of the company ’s resources, financial obligations , and ownership investment. The balance sheet is divided into two sides: on the left are shown the assets; on the right are shown the company ’s liabilities and stockholders ’ equity (the owners ’ investment). Both sides are always equal or in balance. T he company ’s assets include its cash, physical goods , and its financial claims on others. Liabilities represent the claims others have on the company. The stockholder ’s equity section includes the original investment of the owners. Since this example is a corporation, the equity section includes undistributed profits earned by the

123 CHAPTER 6. MANAGING A BUSINESS 91 corporation to date (additional investment of earnings held by the corporation). The following section briefly describes some of the importan t features of a balance sheet:

124 92 SECTION III. BUSINES S MANAGEMENT Typica l Construction Company, Inc. Balance Sheet 7 December 31, 201 Prior Prior Liabilities and Current Current Year Assets Stockholders ’ Equity Year Year Year Liabilities Current Assets $10,000 Cash $15,000 Current Liabilities $40,000 $80,000 $3 5,000 Accounts payable $60,000 Retention $70,000 $50,000 Notes payable $25,000 $30,000 Accounts Receivable $120,000 $100,000 Accrued expenses $20,000 Total current assets $20,000 payable Accrued payroll $20,000 $18,000 $10,000 Misc taxes pa yable $5,000 Inventories Federal income $200,000 $160,000 Construction in $30,000 $12,000 progress taxes payable $150,000 - $120,000 - $100,000 Less: partial billings $180,000 Total, current or contracts liabilities - term liabilities $80,000 $60,000 Long Costs or contracts in excess of b illings $30,000 Raw Materials Bank loan, truck $30,000 $90,000 $100,000 and equipment; 14% due Total Inventories $110,000 $90,000 Total, Liabilities $280,000 $240,000 $20,000 Prepaid Expenses $25,000 nses, (permits and lice . ) etc $250,000 $215,000 Stockholders ’ Total, Current Assets Equity Common stock, $5 $50,000 $50,000 par value, authorized, issued and outstanding Property, plant and 10,000 shares equipment Retained earnings $4,0 00 $4,000 Leasehold $70,000 $60,000 improvements $2,000 $2,000 Office furniture and fixtures Small tools $10,000 ’ $10,000 $120,000 $110,000 Total, Stockholders Equity $130,000 $154,000 Total, Liabilities Construction $400,000 $350,000 equipment and Stockholders ’ Equity - $20,000 - $15,000 Less: accumulated depreciation Net property, plant $150,000 $131,000 and equipment Other Assets $4,000 Total Assets $400,000 $350,000

125 CHAPTER 6. MANAGING A BUSINESS 93 ASSETS (left columns) e categorized as either current or fixed. Assets are listed in Assets ar order of declining liquidity. (Liquidity refers to the speed with which an item can be converted into cash or, put another way, the ability of the organization to pay its current debt .) Current assets are the first items listed on the left side of the balance sheet. These are the assets that are either cash or capable of being converted into cash in the normal course of business, generally within one (1) year from the date of the balance sheet. In addition to cash (money on hand and deposits in the bank), the other items that will be turned into cash include retentions, accounts receivable, inventories , and prepaid expenses. After current assets, the balance sheet lists fixed assets. All of thes briefly described below: e are ● Cash : Immediately available or liquid funds. : A specified amount, usually 10 percent , withheld ● Retention from progress payments to the contractor pending satisfactory completion and final acceptance of the project. This amount ven though you have not yet been you have already earned e paid. ● Accounts Receivable : The amounts due from customers (other than retentions) in payment for construction projects. ● : Includes all materials, labor, and direct and Inventory gress. (For an indirect overhead on jobs currently in pro , refer to the Inter nal example of direct and indirect costs Revenue Code Sections 263A [ capitalization and inclusion in ntory costs of certain expenses] and 451 [general rule for inve taxable year of inclusion ]). ● Prepaid Expenses : Goods or services the company buys and pays for before use. Examples are insurance premiums and office supplies. ● Property, Plant, and Equipment : Sometimes called fixed assets or plant and eq uipment, t his group of assets includes wns or acquires for use in physical resources a contractor o operations and has no intention to resell. Regardless of their current market value, fixed assets are valued at their original , cost less accumulated depreciation. Sometimes property, plant and equipment may be leased rather than owned. The value of the leased property is often included with the fixed assets and the lease payments are included with the liabilities. ● Other Assets : Resources not included under current assets, or under “Property, Plant, and Equipment ” are placed here.

126 94 SECTION III. BUSINES S MANAGEMENT Examples include scrap materials or equipment held for resale and long -term receivables. ) (right columns LIABILITIES Liabilities, like assets, are broken down into two major categories: current liabilities and long -term liabilities. Liabilities repre sent obligations to pay money, pay other assets or render future services to others. The relationship of current and fixed assets and current and -term liabilities will become apparent when you learn how to long analyze the information presented in the financial statements. Current Liabilities: This item includes debts of the company that year of the balance sheet date. Current become due within one (1) assets are the source from which these payments are usually made. Management must be aware of this relationship and maintain sufficient current assets or control the amount of current liabilities to ample, Typical avoid becoming delinquent in its bills. In our ex Construction Company, Inc. has $180,000 of current liabilities composed of the following items: Accounts Payable : ● Money owed to suppliers and subcontractors. ● Notes Payable : Balance of the principal owed on a written promissory note. ● Accrued Expenses Payable : Money owed for interest, services, insurance premiums, and other fees that are not included under accounts payable. Thus, expenses that have been incurred but are not due for payment on the date of the balance sheet are grouped under accrued expenses payable. ● Accrued Payroll : Salaries and wages that the contractor es. currently owes to employe ● Miscellaneous Taxes Payable : Amounts estimated by the accountant to have been incurred during the accounting period and are owed to local and state governmental agencies. ● Federal Income Taxes Payable : Amount of liability for taxes owed to the f al government. (Note: Different eder organizational forms will have different tax obligations.) LONG- TERM LIABILITIES Long -term liabilities are notes or mortgages due one (1) year beyond the balance sheet date. In our sample balance sheet, Typical Construction Company, Inc. owed $100,000 on a bank loan due more than a year in the future. This loan was secured by using certain equipment as collateral.

127 CHAPTER 6. MANAGING A BUSINESS 95 Stockholders ): The stockholders ’ equity ’ Equity (right column or equity, section of the balance sheet, also called net worth represents the claim of the owners on the assets of the business. Different organizational forms use different names for this section of the balance sheet, but basically this is the original investment of the owners. Our example is a corporatio n, and the stockholders ’ equity section has two accounts. : Capital Stock The total amount invested in the business by the contractor in exchange for shares of common stock at par value. Par value is arbitrarily established and need not be the same as the current market price of that share of stock. : T otal Retained Earnings corporation earnings from its beginning, minus the total dividends declared (distributions to owners) since the corporation was founded. This account represents additional investment by the owners who were willing to forego a larger distribution of the company ’s earnings. INCOME STATEMENT The income statement summarizes the operations of the company over a period of time. For the Typical Construction Company, Inc. next page ) the perio d of time is one (1) (see year. The balance sheets presented for Typical were year -end balance sheets with the income statement summarizing the operations during the intervening time period. Income statements are often prepared to cover shorter operational periods (e.g., quarter or month ). Basically, the income statement shows business revenue, expenses, and the resulting profit or loss for a given accounting period. Since the revenues are matched against the related costs and expenses, the difference between t he two is how much the corporation makes or loses. This profit or loss is often called the “bottom line” because it is an important indicator of performance, and it is also the last line of the income statement. Note, however, that this is only one perfor mance indicator that financial statements report. The relationships of the various expense categories to total revenue presented in this statement must be understood if the company is to be effectively managed.

128 96 SECTION III. BUSINES S MANAGEMENT The components of this income statement are illustrated as follows: Typical Construction Company, Inc. Income Statement 7 for the year ending December 31, 20 1 Current Year Prior Year Sales of Residences $1,250,000 $1,000,000 Cost of Operations 1,030,000 850,000 Cost of Sales 91,000 75,000 General and administrative expenses Operating expenses 23,900 22,000 Total operating expenses 1,145,000 947,000 105,000 53,000 Income Before P rovision for Federal Income Tax Provision for Federal Income Tax 30,000 12,000 Net Profit for year $75,000 $41,000 Income : The revenue amount reflects all the billings made to customers for completed projects, as well as work in progress. This is an example of the accrual basis previously discussed. In our example for Typical Constru ction Company, Inc., the sales of residences for the current year were $1,250,000, which represents amounts billed for completed projects and work in progress. Cost of Operations : Cost of operations in the contracting business is expenses associated with running the comprised of all costs and iness, with the exception that federal income taxes are shown on bus another line. By totaling all the costs of operations and subtracting these from the revenue, the operating profit of the company can be found. In our example, Typical Construction Company, Inc., the total cost of operations for the current year is $1,145,000, which, when subtracted from the net sales, leaves an operating profit of $105,000. This represents the amount of profit earned by the contractor without taking into consideration f ederal income taxes. Within the Cost of O perations section of the Income S tatement are several important amou nts: Direct Labor : The actual cost for labor payroll for all jobs worked on during the period covered by the inc ome statement.

129 CHAPTER 6. MANAGING A BUSINESS 97 The amount of direct labor and the percentage of direct labor to the total cost of any particular project should be closely monitored by management. Direct labor expense is an important variable in determining the ultimate profit of the company. The labor percentage is also a direct measurement of the efficiency of the workers and the performance of supervision. Direct Labor Burden : This i ncludes all payroll taxes, insurance , and employee benefits associated with the labor kers belong to a union, the direct labor burden payroll. If the wor will in clude union benefit assessments and, in some cases, association fees. Materials Used : This includes the cost of all materials used on the job, and is usually the largest single expense item on the inco me statement. Since materials comprise such a large part of the total cost of contracting, this account should be carefully controlled and every effort made to ensure that purchasing is done efficiently. : These costs include Other Direct Costs ther than all items, o those listed above, that are directly chargeable to individual jobs. For example, permits, bonds, insurance, and equipment rentals would be included here. General and Administrative Expenses : This figure on the income statement is comprised of al l items of expense of a general nature that cannot be specifically attributed to individual construction projects. In the example of Typical Construction Company, Inc., these expenses are summarized for the year on a separate schedule, which supplements th e income statement. Note that the items covered in our exam ple will differ somewhat among companies, depending on the type of contracting. Whether individual expenses will be listed separately or combined with others will also vary among accountants and co ntractors. Pretax Income: To get this figure, the total operating expenses were subtracted from the sales of res idences. This figure is called Income Before Provision for F Income Tax for those corporations that ederal are subject to f ederal taxation. Certain corporations , as well as sole ownerships and partnerships , do not pay taxes on income; the income is reported on the owner ’s personal tax returns. This is another example of how the organizational form the contractor initially chooses will influence the content of the financial statements. Net Profit for Year : This figure is often called net income and represents the sum of all revenues minus all expenses including

130 98 SECTION III. BUSINES S MANAGEMENT taxes , if applicable. Net profit or income is commonly referred to as ” the “bottom line. Statement of Changes in Financial Position The Statement of Changes in Financial Position, also called the Statement of Sources and Applications of F unds, is a third major financial statement. It shows how funds were obtained and where funds were used. We do not show an example of this statement because in many small operations it is not used. However, if a contracting company is going to be audited by certified public ents to accountants for the purpose of presenting financial statem creditors or others, a S tatement of Changes in Financial P osition may be necessary. Financial Analysis and Ratios While the figures listed in the financial statements are meaningful and important taken alone, they become even more valuable when red with compa r example, comparing any other information. Fo balance sheet item for the current year with the prior year immediately gives us added information. Did the figure increase? Decrease? If so, by how much in absolute dollars? How much in percentage terms? The comparison of financia l relationships is often done in three ways. 1. The first method is the comparison of current financial data , businesses will compare three to with prior years. Very often , such as revenue and net income. This five years of key items type of comparison gives the reader an idea as to the trends over time. 2. The second method is to compare the current financial data with that of other businesses within the same industry. Sources for industry data are provided by organizations , such as Robert Morris Associates, D un and Bradstreet, Inc., and Standard and Poor ’s, and are available on many websites that offer financial information s information also can be found . Thi at large local libraries and at local California State University libraries. 3. The third method used in interpreting financial statements is ratio analysis. The relationship between any two figures within the current financial data is called a ratio. For example, if current assets are $100,000 and current liabilities are $50,000, the relationship of current assets to current liabilities ($100,000/ $50,000) may be shown as 2 to 1, or 2:1 (ratio). The bank loan officer who is to recommend the establishment of a line of credit (short -term loan) would be

131 CHAPTER 6. MANAGING A BUSINESS 99 interested in the current ratio and quick ratio, as the bank would expect the contractor to repay the loan in the near term. Current Ratio One very important kind of information that can be readily determined from the balance sheet is the ability of the company to pay debts when due (sometimes referred to as liquid ity). The difference between the total current assets and the total current . working capital liabilities is called One way of looking at working capital is that it represents the amount that is free and clear if all current debts are paid off. A comfortab le amount of working capital gives a company the ability to meet its obligations and take advantage of opportunities. What is a comfortable amount of working capital? To help answer this question, the current ratio provides additional helpful information. To calculate the current ratio, divide total current assets by total current liabilities. In the example of Typical Construction Company, Inc. , the figures are: Current Assets $250,000 = 1.39 Current Liabilities $180,000 Therefore, for each $ 1 of current liabilities there is $1.39 in current assets to back it up. Quick Ratio The quick ratio is another, more conservative way of testing the adequacy of the current liquidity of the company. Instead of using tuted because these are quickly current assets, quick assets are substi converted into cash. One simple method of determining the quick assets is total current assets minus inventories. In our example: $250,000 Current Assets –Inventories –$110,000 Quick Assets $140,000 Quick Ratio: Quick Assets $140,000 = .78 CURRENT LIABILITIES $180,000 For the above analysis, we can see that we have $.78 of assets that may readily be converted into cash for each $1 of current liabilities that will require cash payments shortly.

132 100 SECTION III. BUSINES S MANAGEMENT The long -ter m creditors (banks or insurance companies) would be interested in the ratio of total liabilities to net worth. This measure ’s assets supplied indicates the relative proportions of the contractor ted on by creditors and owners. In the event that the company defaul its debts, this ratio indicates the degree of safety for the creditors. Net sales to net working capital, net sales to total assets , and net income to net worth are all measures of the efficiency of the company ’s use of its resources. These measures are important indicators to management. Net sales to net working capital (low ratio) might be attributed either to an excess of working capital or to inadequate sales. Management should examine each ratio , keeping in ness, the manager then must mind that if the ratios reflect a weak and develop possible solutions , e.g., more analyze the problem area vigorous collection effort to reduce the size of receivables. Keep in mind that the ratios also are interdependent. When the receivables are reduced, the cash g enerated by the collection effort may be used to reduce long -term liabilities and improve the debt ratio. Management must not focus its attention narrowly. The broad perspective created by knowledge of business principles is essential for success. FINANCIA L MANAGEMENT The contractor must learn to use the section about accounting control focused on the technical documents and interpretations that make up The financial management section focuses first the information flow. on the need for financial resources; second , on the sources; and , on how to best determine if those fi finally nancial resources are being fully utilized . Capitalization Capitalization refers to the total of financial resources made available to the owner. These financial resources are used t o acquire the physical assets necessary to conduct the business. As you assess your financial requirements, the more obvious needs to finance the tools, vehicles , and other equipment (physical resources) used daily in the business are recognized first. The need for additional financing of office expenses, licenses, payroll expenses, bonding, rentals, etc., because of the differences between when you must pay and when you get paid, is critical for the business. A lack of enough working capital and insufficie nt cash liquidity generally result in business failure. The amount of working capital required depends on the type of contracting business. The progress payments required under contracts for custom building and remodeling may be used to mee t payroll expens es and material costs. The typical contract provides for

133 CHAPTER 6. MANAGING A BUSINESS 101 three (3) or more payments, 90 percent during the construction phase and the final 10 percent upon completion and expiration of the lien or cannot period. This final 10 percent is the “retention.” The contract collect more than the percentage already completed. The contractor must be aware that differences in the timing of expenditures and receipts may limit his or her capacity to finance the business, particularly if the company commits itself to new jobs before final payments on completed jobs have been received. The significance of “retention” must not be underestimated. Retention usually exceeds profits and therefore represents a claim on working tor may be held capital. Retention payments to the individual contrac up through no fault of the contractor. The total project must be accepted before retentions are released. The problem is even greater for the subcontractor who completes his or her phase early in the project and must contend with a long wai ting period. Since these funds are not available for use elsewhere in the business, the contractor must often finance the costs through borrowing. Speculative builders require larger amounts of capital than custom builders. speculative builde rs often must provide Consequently, substantial financial resources to qualify f or loan commitments. Growth that is too rapid can jeopardize the company’s solvency . Financial planning will help avoid cash shortages. Sources of Financing The new business owner typically lacks the required financial resources. Two types of external financing are available — equity funds debt . Equity funds are supplied by investors who acquire and some control of the business and a share of future profits. These funds remain in the business. Debt represents borrowed dollars that require both the repayment of the original amount and periodic interest payments. The owner does not normally give up control of the business. Equity The typical sources of these funds are acquaintances of the new owne r-contractor. Equity funds are sometimes available from private venture capital companies, small business investment corporations that are funded by the federal Small Business Administration, and minority enterprise small business investment companies. The se sources are usually restricted to businesses with a proven track record in a growing industry.

134 102 SECTION III. BUSINES S MANAGEMENT DEBT Long -Term -term financing to contractors with good credit Banks may offer long ratings, technical knowledge, and capacity for repayment as evidenced by fi nancial planning in the form of projected balance sheets, income statements , and cash budgets. The Small Business Administration (SBA) does not make direct s funds by guaranteeing repayment of a loan. For loans, but provide more information, visit www.sba.gov . Term Short- The operating business may want to establish a line of credit with a bank to meet some of its short -term needs for working capital. Through the line of credit, commercial banks can provide the working capital necessary to complete the awarded contract , with the loan requiring repayment when the contractor is paid. The bank loan officer will normally require balance sheets and income statements on the business for the current period, as well as over severa l prior years. The contractor is advised to have these reports prepared by a C ertified Public Accountant so that they meet professional accounting standards. The lender will expect to be provided with information on the contract up for bid, as well as all uncompleted contracts. The loan officer will evaluate: : Includes experience with similar jobs and Character locations; business reputation with lenders, suppliers, and subcontractors; and reasonableness of bid. : Requires an evaluation of current w orkload, Capacity availability of equipment, and financial resources available to withstand any reasonable loss. The financial strengths of the awarding agency , and subcontractors and suppliers also are important considerations. Certainty : What are the chances that repayment will be affected by unexpected losses on existing business? Are completion dates realistic? Is there a chance that penalties will be assessed for delays? Bank loans to speculative builders may include funds necessary to provide offsite improvements , as well as the construction of buildings. Funding also may be arranged to acquire land for future development.

135 CHAPTER 6. MANAGING A BUSINESS 103 OPERATIONS MANAGEMENT Job Selection Job selection is the key to making a profit. The planning involved in f the general level of business job selection requires knowledge o activity in the local area, the need for new construction, costs of materials and labor, the contractor ’s current financial resources, and any new architectural or structural advances. (The goal is to select cts for which the contractor has technical expertise.) individual proje Bidding and Estimation (Planning) the enti Accurate bidding requires that the contractor map out re . The time spent on this detailed work ensures construction process ssary for the contractor to make a the accuracy of cost estimates nece profit. Careful review of the job requires on -site inspection (walk the job), review of plans and specifications, identification of equipment and the required and the financing method (purchase, lease, rental), need for s ubcontractors. Materials required are determined from takeoffs (quantity and me asurements taken from plans) that are converted to costs on the estimation form. Prices should be obtained from published price lists and quotes from suppliers and subcontracto rs. It is important to include sales tax and freight costs. Cash discounts should not be included unless the contractor is certain that sufficient financial resources will be available so that accounts payable may be repaid during the discount period. Labo r costs are calculated according to work classification. These costs include not only the hourly wage rate, but also payroll taxes, health and welfare benefits, vacation pay, and required insurance. also should be aware that wage settlements could The contractor affect these rates and that job actions could affect the availability of these workers. Other direct costs that must be examined include permits and other fees; interest, loan commitment fees, points, and other charges on wned or rented; and any additional borrowed funds; equipment o insurance that may be required. Fuel and lubricant expenses, general maintenance , and small tool s represent indirect costs that may be charged to the project and should not be overlooked. The contractor also must identify the overhead expenses. Overhead normally includes such expenses as office rental, supplies and wages, advertising, bad debts, storage charges, and any other general

136 104 SECTION III. BUSINES S MANAGEMENT administrative costs. The appropriate portion should be allocated to the job. costs have been totaled, the contractor must add profit. When all the Profit is essential to the continuation of the business and represents the return for bearing risk. The contractor will seriously jeopardize the business by omitting the allowance for profit, especi ally if the bid is low margin and there is any chance of underestimation. Insufficient profits threaten both capitalization (losses reduce (payments to vendors may exceed retained earnings) and cash flow receipts) to the extent that bankruptcy and/or disso lution may be the result. Common pitfalls that can be avoided include: bidding on projects for which the plans and specifications are not completely understood; insufficient planning so that hurried analysis becomes necessary; overextension of the manageri al and/or financial resources of the company; and bidding against the competition and not on the job. It is easier to avoid financial difficulty by not bidding on a job for which you lack the capability than to try to salvage the job after a poor bid een accepted. has b The Construction Process (Coordination and Control) The estimate that is the basis for the bid becomes a budget for the project. Without extensive planning and scheduling, lack of coordination can result in added costs that quickly reduce the profits. If the estimation has been done properly, the job was broken down into a job schedule to arrive at the number of labor hours required. Actual construction, however, requires that materials and labor be brought together at the proper time. Two met hods of production scheduling may be used to accomplish this coordination. bar chart (Figure 6.A) is a fundamental scheduling technique The that shows graphically the starting and finishing times for the individual tasks that make up the job. This scheduli ng approach is simple but overlooks some interrelated tasks. The critical path method (Figure 6.B) is a more complex tool that better -relates the tasks. This technique derives its name from inter the key path through the network that takes into account all the tasks to be completed. Any delay in one of these tasks will result in overall delay of the project. This procedure, therefore, identifies the tasks on which the manager must focus attention to ensure completion of the project on time. Since the contra ctor ’s time is a scarce resource, this approach can save on this important factor.

137 CHAPTER 6. MANAGING A BUSINESS 105 FIGURE 6.A Building a New Home: Construction Schedule

138 106 S MANAGEMENT SECTION III. BUSINES FIGURE 6.B Building a New Home: Critical Path Analysis

139 CHAPTER 6. MANAGING A BUSINESS 107 Controlling Costs Contractors typically have a small perm anent payroll that consists of a foreperson and skilled journeypersons. This force can be expanded by union hiring halls, which means that the contractor must be knowledgeable about the union ’s master labor contract. The work of the various subcontractors must be scheduled and coordinated with the overall job. The small contractor must expect to spend most of the day at the site , coordinating these activities and resolving conflicts. Subcontractors should be chosen on the basis of their ability to perform, as well as cost, since untimely delays quickly eliminate the potential savings of the lowest bid. Purchasing is an essential part of the job because of the high cost of carrying materials inventory. As with subcontractors, reliability is equally important as price. The contractor will typically develop trade relations with a limited number of suppliers. Costs are best controlled by checking with other suppliers if prices increase significantly, by verifying order quantities, by taking cash discounts when offered, and by not overstocking. Risk Management Businesses operate under conditions of uncertainty. Profits are the price charged to bear risk. Unexpected property and casualty losses ’ prospects. Insurance is a means of can severely damage the business red ucing the company ’s exposure to risk. The contractor should consult an insurance agent or broker to design a comprehensive insurance package to meet the company ’s specific needs. This package could include: ● ; Fire insurance ; ● Liability insurance Automobile insurance ; ● Workers ’ compensation insurance ; ● ● Fidelity bonds ; ● Business interruption insurance ; ● Employee health and life insurance ; and ● “Key person” insurance . Insurance costs can be minimized by obtaining a number of quotes for new or renewal policies , or by enrolling in special plans offered by trade associations.

140 108 SECTION III. BUSINES S MANAGEMENT If the contractor lacks sufficient funds for total coverage, a planned that approach to risk management becomes necessary. Principles should be followed include: ● he largest loss exposure first; p roperty and liability Covering t insurance should be reviewed yearly to reflect cha nges in valuation and take current court judgments into account Using deductibles to significantly reduce costs ● ● overage year ly to reflect changes in the business Reviewing c ing ● time to understand the implications of any changes in Tak ’s contracts the insurer Marketing Management Personal contacts represent the major source of business for the new contractor. Small and medium -sized contra cting businesses rely on referrals. The extent of the marketing effort is limited by the sources available to the contractor. Development of a formal marketing program is helpful to the contractor to ensure that continued effort and attention is placed in this vital area. Inattention to the marketing program could weaken the entire effort of the company, regardless of how strong the other areas may be. LEGAL CONSIDERATIONS AND REMEDIES A continuing relationship with an attorney familiar with the n business is helpful. Printed standard forms of constructio ’s agreements used in the industry are available from the contractor particular trade association, t he American Institute of Architects, or the Associated General Contractors of Americ a. It is a good idea to have an attorney double -check the contract for complian ce with all regulatory agency requirements. Lawyers often are located through friends, other contractors, ions, or through listings in telephone suppliers, trade associat directories . Local bar associat ions can arrange a meeting between a contractor and a practicing attorney in the area. In addition to helping with the interpretation of contracts, the attorney can help in choosing the form of business organization ; making sure all necessary documents are filed with city, county , and state governments ; and helping resolve any differences that might occur between the contractor and other business parties. There are typically four types of contractual agreements between the builder and owner with which the c ontractor should be familiar.

141 CHAPTER 6. MANAGING A BUSINESS 109 These are the lump -price, and the -sum, the cost -plus, the unit -maximum cost contract. Each of these contract types guaranteed specifies the contractor different terms and obligations with which must be familiar. he contractor has to be aware of the proper filing In addition, t methods, the number of days for filing, and other documents such as lien release notices, lien claims, and notices of completion. It is essential for the contractor to be familiar with the California Mecha s Lien Law. nic Disputes ; and A good manager will minimize the likelihood of a dispute , if involved in one, that person will have enhanced his or her chances of success. At the outset, you should be aware that there is no good lawsuit. Everyone is a loser. You will never be fully compensated for your out - of-pocket expenses, much less for the physical, emotional, and business disruption that a lawsuit can create. Therefore, you should do everything within reason to settle your differences. This can be done in a number of ways: Get It in Writing Besides the statutory requirement that certain contracts be in writing, it is extremely important that a contract of any significance at all be in writing. First, a written document will not be forgotten like a verbal agreement and is more likely to keep the parties aware of their rights and responsibilities. , if there is a dispute and an arbitrator or judge is Second asked to interpret the agreement, he or she is more likely to find in accordance with your true intent i f that intent is in writing. Extras “Changes” or “extras ” added to a contract tend to contribute to disputes. T o determine if something is an extra or outside the scope of the original agreement, you must be able to accurately determine what the original agreement states . If the original agreement is well defined and in writing, it will be much easier to determine if something is an extra. Once you determine that a request is different than what was agreed to (whether more or less), document that fact in wr iting. You should also immediately negotiate the effect of the change , such as cost and time. Tell your customer what is

142 110 SECTION III. BUSINES S MANAGEMENT going on and allow the customer to determine if the change is to the change, make worth it. If you and your customer agree rties sign the written change order. sure both pa Communication Whenever possible you should communicate with your customer and encourage your customer to communicate with -through you. Frequent “punch lists” are a good idea. A walk near the end of the job to determine the items that are left to be completed is recommended. Correct any deficiencies quickly. It is a good idea to document the progress of the project and keep your customer up -to-date. Closely allied with the communication of progress is frequent billing. By , you wil l minimize your invoicing regularly ’s cash demands while business ing your customer keep informed. Let your customer know what is going on ; and , if there is a problem, face it head -on before it becomes insurmountable. ng you could, you may still find Even if you have done everythi yourself involved in a dispute. You have various options: Settlement Lawsuits are costly, time -consuming, and disruptive. If at all possible, you should attempt to settle your differences. s rewarding than you would Fighting for principles may be les anticipate. Small Claims If you are owed money and cannot settle your dispute, you might consider filing suit in small claims court rather than courts of greater jurisdiction. Although you cannot foreclose on a mechanics lien in small claims court, you may get a ary judgment of up to $10,0 00 (see CCP§116.221) . Aside monet from the fact that if a defendant loses, he or she has an automatic right of appeal, small claims judgments are as valid and binding as courts of greater jurisdic tion. Small claims courts are fast and economical. Your claim can usually be heard within one month and the entire cost should be minimal. You and your customer must represent yourselves. Neither you nor your customer may be represented by an attorney. For information about small claims court topics, such as filing a complaint and collecting a

143 CHAPTER 6. MANAGING A BUSINESS 111 judgment , see the California Court s website: http://www.courtinfo.ca.gov/selfhelp/smallclaims . If the defendant loses in small claims court, there is an automatic right of appeal. But even that appeal is usually within a month or two. You will not have to wait for long. Arbitration ttling disputes is arbitration. CSLB has Another option for se its own arbitration program , but many contractors choose to bring their disputes to private arbitrators. The advantage of arbitration lies in its relative speed and its low cost in comparison to court proceedings. Arbitration is different from court proceedings in a number of ways. Usually , both parties must agree to arbitration and can often have a say in choosing the arbitrator. Both parties often choose an arbitrator who has some familiarity with construction. This is one of the reasons arbitration can be cost -effective. Either side may present its own case or use an attorney. Because of its more informal nature, some of the protections afforded in court, such as the rules of evidence, are not always followed. Arbitrators tend to allow much more evidence than woul d be allowed in court. Most arbitration decisions are binding ( the arbitrator . Finally, there are ’s decision is final) very few grounds for appeal of an arbitration decision. If you want potential disputes to be solved via private arbitration you must use the arbitration notice in Business ection 7191. I and Professions Code s f the parties to the contract agree to such a notice, they will not be allowed access to CSLB ’s arbitration program (unless both parties later sign a waiver of the contractual arbitrat ion clause). CSLB Arbitration Program To help resolve oard , CSLB offers two free complaints filed with the b arbitration programs —a mandatory program for disputes involving alleged damages of less than $15,000 , and a voluntary program for disputes involving alleged damages of between $ 15,000 and $50,000. When the alleged damages are less than $ 15,0 00, CSLB can order the contractor to a mandatory CSLB arbitration meeting .

144 112 SECTION III. BUSINES S MANAGEMENT To qualify for CSLB arbitration, disputes must comply with certain criteria: The cont s license must be in good standing at the time of ractor’ ● the alleged violation; ● The contractor cannot have a record of prior violations; and The parties cannot have previously agreed to private ● arbitration in the contract or elsewhere. Mechanic s Liens “stop notices in this Mechanics liens and ” are briefly touched on of the book ; these two avenues are discussed in great er detail portion . However, you should note that , as a contractor in the next portion (one who enhances the value of property), you are entitled to a lien on the property and may be entitled to a lien on any construction funds. The manner in which these liens are perfected is very technical and the time limits are short. You should be thoroughly familiar with the manner and means of perfec ting your lien rights , such as giving the preliminary notice, recording the mechanics lien, filing a stop notice, and filing suit to foreclose. These remedies are rather speedy and can be utilized by anyone who improves the property. Filing Suit Regardless of your mechanic s lien rights, as with any other bus file suit for breach of the construction inessperson, you can contract if someone does not fulfill his or her obligation. Certainly, if the customer does not pay you money when it is due , you can sue . In the event that you have been unsuccessful in resolving the dispute and have not availed yourself of the mechanics lien rights due to the strict statutory requirements, you can still file suit. The seller of any product or service is entitled to compensati on. You, as a contractor, also are entitled to your money. If you are a corporation, you cannot represent yourself in court and must obtain the services of an attorney. In the event that you are a partnership or a sole proprietor, you can represent yoursel f in court and are not required to have an attorney represent you. It is, however, a good idea to have an attorney represent you in court due to the technical requirements of the court procedure. Summar y You are normally much better off staying out of disputes. You can greatly minimize the likelihood of a dispute by documenting your agreements, meeting problems head -on, seeking solutions,

145 CHAPTER 6. MANAGING A BUSINESS 113 negotiating and documenting changes as they occur, communicating with your customer, and invoicing regularly. d yourself in a dispute, make reasonable efforts to settle it. If If you fin you can small claims court, arbitration, or ’t, you may choose among civil litigation. CALIFORNIA MECHANIC S LIENS AND STOP NOTICES Mechanic s Liens In California, mechanic s liens are provided for in Article 14, Section 3 the California Constitution: of Mechanics, persons furnishing materials , artisans, and laborers , shall have a lien upon the property upon which of every class they have bestowed labor or furnished materials for the value of suc h labor done and materials furnished; and the Legislature shall provide , by law, for the speedy and effic ient enforcement of such liens. The manner in which mechanic s lien rights are perfected is based on t mechanic s lien statutes. The California Supreme Court has held tha rights are constitutional. The list of people who may claim liens as provided by the Constitution , as well as the California Civil Code , is as follows: mechanics ; persons furnishing materials; contractors ; subcontractors ; lessors of equipm ent ; architects ; registered engineers ; ; artisans ; machinists ; teamsters ; draymen ; licensed land surveyors ; builders or bestowing skill or and all persons and laborers performing labor on to , furnishing material or leasing equipment other necessary services to be used or consumed in , or furnishing appliances, teams, or power contributing to a work of improvement. This does not mean that these people must have a contract directly with the owner. However, they must have a contract with the agent of the owner a nd every contractor, subcontractor, architect, builder, or other person having charge of a work of improvement is held to be the agent of the owner. A material supplier is not the agent of the owner , therefore, a ; and material supplier ’s supplier is not en titled to a s tatutory lien. Further, to perfect your lien, the work and/or materials, etc. must be incorporated into th e structure. That is to say, it has to be installed. Stop Notices A mechanic s lien is a lien on property. A s top notice is a lien on fund s. You may use one or the other, or both. However, it should be noted that in public works, you cannot file a mechanic s lien ; therefore, your

146 114 SECTION III. BUSINES S MANAGEMENT only remedy may be a s top notice is a lien on top notice. Since the s funds, it may be preferable to a mechanics lien in some instances. Other Remedies Even though you may be one of the people protected by the mechanic s lien laws in California, you are not precluded from other remedies. You can still sue on a contract theory or on any other legal theory s available. So, even if you have not availed yourself of the mechanic lien rights, you still have alternative legal remedies. Procedure s lien laws and s The mechanic notice requirements are relatively top complicated and must be adh isted below is a ered to very strictly. L procedural checklist that you may use to formulate an office procedure to help you complete each step necessary in a timely It is best to become thoroughly familiar with the process and manner. e procedure discuss it with your attorney before establishing your offic and training staff on these steps. s Lien and Stop Notice Checklist Mechanic I. Prior to Serving the Notices Before serving the notices, it is important to do all of the following: □ Obtain the le gal description of the property; □ Determine the name of the owner and the extent of the ’s interest in the property; owner □ Determine if the owner is the one who is requesting the (If not, what is the inter est of the person improvement. are there any others who claim an interest requesting it and in th e property, such as lenders, etc.); □ Determine if you are a prime contractor, subcontractor, labo rer, or material supplier; □ he construction lender (if any); and Determine the name of t □ Consider the effect of a bond or joint control. II. Subcontractors and Material Suppliers A. Within twenty (20) days from first furnishing labor or materials, serve a “Preliminary 20- day Notice” on the owner, the original contractor, and construction lender. No matter how many deliveries you make, or the time span over wh ich you furnish labor or materials, only one Preliminary Notice is required.

147 CHAPTER 6. MANAGING A BUSINESS 115 Under the notice, you must use specific wording to inform a property owner of a new responsibility to notify anyone who See Civil Code § Title 15 , 3097 served a Preliminary Notice. ( Works of Improvement , in the Appendix.) day Notice with NOTE: You may also file the Preliminary 20- county recorder in the county in whic h the property is the ounty located. The c recorder will then notify you when a Notice of Completion or Notice of Cessa tion is recorded on the property. The most common method for serving a notice is to use first class certified or registered mail, return receipt requested, postage prepaid, addressed to the residence or place of business of the person being served, or at t he address shown by the building permit, or at an address contained on a recorded mortgage or trust deed. Be sure to keep post office receipts for later use if you need to file a claim and prove it in court. A Preliminary Notice also may be served by perso nal delivery or by leaving it with a “ person in charge” at the residence or place of business of the person you wish to serve (must be an adult). B. After the work is completed or ceases , the following apply: 1. If the owner records a Notice of Completion after completion of work of improvement (this requires ’s agent), you should not do signature of owner or owner nder the contract. (While this n otice additional work u provision is designed to primarily protect the owner, it might serve to increase the funds accessible to satisfy your claim and indicate that you have performed your contractual obligations.) days before the 2. Labor must have ceased for at least 30 owner is entitled to record a Notice of Cessation. If the owner files a Notice of Cessation of l abor or a Notice of Completion, then: (a) Within 30 days of the owner recording either a Notice of Cessation or Completion, the subcontractor must record a Claim of Lien with the County Recorder. Also at this time, serve stop notices (see below). Note : A n owner who files a Notice of Cessat ion or a Notice of Completion must notify any potential lien claimants within 10 days of recording the notices. This notification is designed to let you, the potential lien claimant, know that the time for filing a Claim of

148 116 SECTION III. BUSINES S MANAGEMENT Lien has been reduced. This provision does not apply or fewer units. to a residential property of four (4) 90 within (b) File Lien Foreclosure Action days of l is pendens at recording a Claim of Lien, and record a the same time. You must also file an ac tion on the stop notice at this time , if applicable. If you want more than 90 days in which to foreclose, then after the recording days elapses, give lien, but before 90 credit to the owner and record a notice of the fact and day terms of credit. Within 90 s after your offer expires, you must foreclose. You can keep granting extensions by the above procedure, but you must foreclose within one (1) year after work is completed. The action should be brought to trial within two (2) years after commencement. 3. If no Notice of Completion or Notice of Cessation is : recorded and either (a) Labor ceases and the owner or agent uses work of improvement, or (b) The owner or agent accepts improvement, then : (1) Within 90 days of any of the above acts, record a Claim of L ien. Also at this time, serve s notices top . (see below) Within 90 days of recording the lien, file a Lien (2) Action and record a l is pendens at the Foreclosure same time. If you want to extend the time in which to file a foreclosure action, after you record the Claim of Lien, but before 90 days elapse, give credit to the owner and record a notice of the fact and terms of credit. The extension will be for 90 days after the credit expires, but even with extensions you must foreclose within one year after the (1) work is completed. The action should be brought to trial within two (2) years after commencement. 4. Stop Notices: (a) Serve stop notices on the owner, bonded s top notice on the construction lender, or anyone holding funds. (b) If no mechanic s lien ha s been recorded, and a surety payment bond has been recorded, then the notice must be served on the surety.

149 CHAPTER 6. MANAGING A BUSINESS 117 (c) File suit on the notice at the same time that you Foreclosure Action. file a L ien III. Prime Contractors A. Within may record a Notice of days after completion, you 10 Completion. (While this notice provision is designed to primarily protect the owner, it might serve to increase the funds accessible to satisfy your claim and indicate that you have performed your contractual obligations.) Do not do additional work under the contract. This notice requires the ’s agent. signature of the owner or the owner B. Within 60 days of recording the above, record the Claim of Lien. 90 days of recording the lien, file a Lien Foreclosure C. Within Action and record a l is pendens at the same time. If you want to extend the time in which to file a foreclosure action, after laim of L ien, but before 90 days elapse, give you record the C credit to the owner and record a notice of the fact and terms of credit. The extensi on will be for 90 days after the credit expires, but even with extensions you must foreclose within one (1) year after the work is completed. The action should be brought to trial within two (2) years after commencement. Cessation of Labor or a Notice D. If the owner records a Notice of of Completion, do the following: NOTE: Labor must have ceased for at least 30 days before the owner is entitled to record the Notice of Cessation. 60 days of recording a Notice of Cessation or a 1. Within Notice of Completion, the contractor must record a Claim of Lien. 2. Within 90 days of recording the Claim of Lien, file a Lien Foreclosure Action, and record a l is pendens . If you want more than 90 days in which to foreclose, then after recording the l ien, but before the fi rst 90 days elapse, give credit to the owner and record a notice of fact and terms of credit. Within 90 days after your “offer” expires, you must foreclose. You can keep granting extensions by the above procedure, but you must foreclose within one (1) year after work is completed. The action should be brought to trial two (2) years after commencement.

150 118 SECTION III. BUSINES S MANAGEMENT E. If no Notice of Completion or Cessation is recorded, and either; 1. Labor ceases and owner or agent uses the work of ; improvement or 2. Owner or agent acce pts improvement, then: (a) Within 90 days of any of the above acts, record a Claim of Lien. (b) File Lien Foreclosure Action within days of 90 l at recording Claim of Lien and record a is pendens days in the same time. If you want more than 90 which to fore lien, but close, then after recording the before the first 90 days elapse, extend credit to the owner and record a notice of the fact and terms of credit. Within 90 days after your offer expires, you must foreclose. You can keep granting extensions by the above procedure, but you must foreclose within one (1) year after work is completed. The action should be brought to trial within two (2) years after commencement. NOTE: Per AB 457 , which took effect in 2011, the definitions of “claim of lien” and “mechanics lien” are the same. This law also requires that a Notice of Mechanics Lien be served on the owner or person believed to be the owner of the property or on the construction that a “proof of service affidavit” to lender or original contractor, and the ab ove mentioned party or parties be completed and signed by the person serving the Notice of Mechanics Lien. Failure to serve the mechanics lien and confirm a proof of service affidavit will cause the mechanics lien to be unenforceable. These requirements are detailed http://www.le ginfo.ca.gov/pub/09- at the following link: 10/bill/asm/ab_0451- 0500/ab_457_bill_20090806_chaptered.html

151 CHAPTER 6. MANAGING A BUSINESS 119 FIGURE 6.C Mechanic s Lien and Stop Notice Process (See also the Mechanic s Lien and Stop Notice Checklist, page 114 )

152 120 SECTION III. BUSINES S MANAGEMENT GLOSSARY OF TERMS ASSOCIATED WITH MECHANIC S LIENS is the owner or the agent of the owner who Awarding Authority awards an original building or construction contract, also known as the prime contract. This term is usually used with public works. accompanies a s Bonded Stop Notice notice to a is a bond that top -1/4 times the construction lender and must be in a sum equal to 1 top notice, must be amount of the claim. The bond, along with the s delivered by certified or registered mail or in person, to the persons responsible for administering or holding construc tion funds. Should the claimant lose his/her action (lawsuit on the bond), then the claimant must pay all costs that may be awarded against the owner or contractor or construction lenders. This is the reason for the bond on the s top notice. is the Claimant person who is claiming or asserting the right or demand (the person who is claiming m echanic s lien or stop notice rights). Claim of Lien (m echanic s lien) is a written statement signed and verified by the claimant or by the claimant ’s agent that must state the following: ’s demand (after deducting credits and 1. The amount of claimant offsets) ; ; 2. The name of the owner or reputed owner, if known 3. The kind of labor, services, equipment, or materials furnished ; by the claimant 4. The name of the person who employed the claimant or to whom the claimant furnished the labor, services, equipment, or materials (the contractor who hired you if you are a subcontractor or the owner who hired you if you are the prime contractor) ; and, 5. A description of the sit e sufficient for identification see Civil ( §3084 Code . ) Defendant is the person who defends him/herself or who denies a claim. A defendant is the person against whom relief or recovery is sought in an action or suit. Lien Foreclosure Action is a lawsuit to fore close the m echanic s lien. Lis Pendens is a notice that a lawsuit is pending and that the lawsuit affects real property. It warns everyone who might acquire

153 CHAPTER 6. MANAGING A BUSINESS 121 the property that he or she may be bound by an a dverse judgment §3146 . see Civil Code ) ( Notice of Cessation is a written notice, signed and verified by the owner or his/her agent, stating: 1. Approximate date when labor on the job stopped ; that no further labor has been performed since 2. Confirmation the recording of th e notice ; 3. Name and address of t he owner ; 4. Nature of the interest or estate of the owner ; 5. Street address of the site, if any, or a description of the site ; and sufficient for identification 6. Name of the original contractor, if any, for the work of improvement. The Notice of Cessat ion must be recorded in the O ffice of the C ounty Recorder of the county in which the site is located and will be effective only if labor has ceased continuously for at least 30 days prior to the recording ( see Civil Code §3092 ) . Notice of Completion is a w ritten notice, signed and verified by the owner or his/her agent , stating: 1. Date that the job was finished; ; 2. Name and address of the owner ; 3. Nature of the interest or estate of the owner 4. Street address of the site, if any, or a description of the site ; and sufficient for identification 5. Name of the original contractor, if any, for the contract covering the portion of the work of improvement completed. The Notice of Completion must be recorded in the O ffice of the County Recorder of the county in which the site is located within 10 days af ter completion of the project ( see Civil Code §3093 ). If the Notice of Completion is recorded, then t he time within that you have lien is 60 days if you are a prime contractor to record your mechanics 30 days if you are a subcontractor. If this n otice is not filed in a and timely manner, you have a 90- day period within which to record the claim. Notice of Non -Responsibility is a written notice , as described below , which is signed and verified by a person or that person ’s agent who owns or claims to have an interest in the property that is being

154 122 SECTION III. BUSINES S MANAGEMENT improved and who has not caused the work of improvement. For example, the owner completes this notice when his/her tenant is ’s direction. requiring the work of improvement without the ow ner This notice must contain: 1. Description of the site sufficient for identification ; 2. Name and nature of the title or interest of the person giving ; the notice 3. Name of the purchaser or person holding the lease (lessee), if ; and known 4. Statement by the person giving the notice that he/she will NOT be responsible for any claims arising from the work of improvement. Within 10 days of discovering the work of improvement, the person asserting non -responsibility must POST this notice in a c onspicuous place on the site AND must RECORD the notice in the Office of the County Recorder of the county in ( see Civil which the site is located Code §3094 ) . Original Contractor , also known as prime contractor, is usually a general contractor. includes any person(s) having some title or interest in a Owner parcel of real property. Payment Bond is a bond that is usually procured by the owner or contractor that is in an amount sufficient to pay all claims of claimants. The bond gives the claimant the right to recover in any suit brought on the bond. Usually the bond is used to protect against s liens and substitutes the bond as security instead of the mechanic real property. Prime Contractor see “Original Contractor” above. Stop Notice is a written notice , signed and verified by the claimant or the claimant , that puts a lender or anyone else holding ’s agent construction funds on notice that there is money due and owing to the claimant. It must state the following: 1. Type of labor, services, equipment, or materials furnished or agreed to be furnished by the claimant ; 2. Name of the person to or for whom the labor, services, etc. were furnished; and 3. Amount , based on value as near as possible, of the work or equipment already completed or furnished and the amo unt of the whole work agreed to be done or furnished.

155 CHAPTER 6. MANAGING A BUSINESS 123 If involving a private work of improvement, the notice must be delivered to the owner personally or left at his/her residenc e or place ct, if person in charge or delivered to his/her archite of business with a ; and, if the notice is served upon a construction lender holding any construction funds and maintaining branch offices, it must be delivered to the manager or other responsible person at the office or branch administering or holding the construction funds. If involving any public work for the state, the notice must be filed initiated the contract. with the director of the department that If involving any other public work, the notice must be filed in the blic disbursing officer office of the controller, auditor, or other pu whose duty it is to make payments under the provisions of the contract or with the commissioners, managers, trustees, officers, board of supervisors, board of trustees, common council, or other body by whom the contract was awarded. Any stop notice may be served by registered or certified mail with the ( see Civil Code §3103 same effect as personal service ). The stop notice obligates the person holding construction funds to withhold sufficient funds to satisfy the amount in the s top notice. If the person holding the funds does not withhold sufficient funds to satisfy the stop notice, then the lender or whoever else is holding the funds may be responsible to the claimant directly. top onded. The To bind a construction lender, the s notice must be b bond that accompanies a s top notice to any construction lender must be in the s 1/4 times the amount of the claim. The bond um equal to 1- must be delivered along with the s top notice in person or by certified or registered mail to the persons res ponsible for administering or holding the construction funds. Should the claimant lose in his/her action (lawsuit on the bond), then the claimant must pay all costs that may be awarded against the owner or contractor or construction lender. That is the rea son for the bond on the s top notice ( see Civil Code § 3083 ) . Subcontractor is any person who does not have a contract directly with an owner. The subcontractor has a contract with and from the prime contractor or another subcontractor. A subcontractor is us ually a specialty contractor, but can also be a general contractor.

156 124 SECTION III. BUSINES S MANAGEMENT EXPERT ADVISORS The new contractor must be prepared to seek out and utilize the expertise of specialists in business affairs, just as the contractor has come to rely upon skilled specialists in the building trades. If the business is to be organized as a partnership or corporation, an attorney, preferably one who specializes in drawing up partnership agreements or incorporation papers, should be consulted. The local bar association may be a good source for recommendations. ecords should be prepared by a certified public The accounting r accountant (CPA) whose practice specializes in building trade industry clients, if at all possible. The CPA or tax lawyer should be tax problems. consulted for specialized The U.S. Small Business Administration (SBA) along with its resource partners , Service Corps of Retired Executives (SCORE), , and Small Business Small Business Development Centers (SBDC) ices to Information Centers (BIC), offer a wide variety of serv wanting to start or expand their business. Services individuals include one -on-one counseling, workshops, training, business seminars , and SBA ’s guaranteed loan programs designed to help with your business financing needs. Contact them at: U.S. Sma ll Business Administration (800) U ASK SBA (827- 5722) www.sba.gov Email: [email protected] BIDDING ON GOVERNMENT CONTRACTS Contractors bidding in California should know that there are a , an d local governmental agencies, as well as variety of federal, state , which may require a bidder public utilities and private corporations to take specific steps to achieve established minority, women , and disabled veteran business enterprise (DVBE) goals. For information on fulfill ing these goals on bids for certain government contracts, check with the following agencies: California Department of General Services, Procurement Division Office of Small Business and DVBE Certification (OSDC) 707 Third Street, 1st Floor, Room 400 West S acramento, CA 95605 Phone: (916) 375- 4940 Email: [email protected] Website: http://www.dgs.ca.gov/pd/Programs/OSDS.aspx

157 CHAPTER 6. MANAGING A BUSINESS 125 .S. Department of Comm erce Minority Business Development The U (MBDA) provides direct business development services to Agency minority businesses through a network of Minority Business Development Centers (MBDCs) located in most major cities throughout the country. Services may inclu de identification of contracting opportunities, preparation of bid proposals, identification of lending sources, preparation of loan applications, etc. As per Presidential Executive Order 11625, the following ethnic groups are among those el igible for assi stance from MBDA -funded organizations: -Americans , Puerto Ricans, Spanish -speaking African Americans, Native American s, Eskimos, Aleuts, Hasidic Jews, Asian - Pacific Islanders , and Asian Indians. For more information, visit http://www.mbda.gov .

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159 SECTION IV. DS AND CONSTRUCTION STANDAR SAFETY REGULATIONS Chapter 7. Safety and Health in Construction 8. Regional Notification Centers: Underground Service Alert 9. Preservation of Native American Remains 10. Construction of Wells Chapter 7. Safety and Health in Construction According to the California Division of Labor Statistics and Research, the construction industry has one of the highest occupational injury rates of any major industry in the state. A substantial portion of these injuries could be pr evented if employers complied with occupational safety and health standards. Following is a description of many of the general safety and health requirements and practices that affect contractors in California. In requirements that apply addition, there are many safety and health to specific construction trades and activities. It is your responsibility to be informed about the local, state, and fe deral laws and regulations that affect your business, as well as which regulatory agencies have or share jurisdi ction in your area. RESPONSIBLE AGENCIES Regulatory and advisory roles pertaining to construction safety and health in California are performed by several state agencies. The following agencies are those with whom contractors and their employees are most l ikely to be involved. California Department of Industrial Relations, Division of Occupational Safety and Health (DOSH) DOSH , within the Department of Industrial Relations , is given the authority to implement and enforce the Cal/OSHA program according to th e provisions of California Labor Law. The Cal/OSHA program is , and partially funded by f ederal OSHA in approved, monitored accordance with the Federal Occupational Safety and Health Act 127

160 128 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS (OSHA) of 1970. To ensure that working conditions are safe and healthf ul and that employers meet their obligations to provide such conditions, the DOSH Enforcement Unit enforce s occupational safety and health regulations, responds to employees ’ complaints, makes routine inspections of workplaces, and investigates serious and fatal job -related injuries and illnesses. DOSH works to ensure safe and healthful working conditions for California employees through standards enforcement, consultation service to employers, occupational safety and health research , and by info providing rmation and publications. Cal/OSHA Consultation Service -site The Cal/OSHA Consultation Service provides free on consultation. Its goal is to help employers develop solutions to their occupational safety and health problems so that they can voluntarily comply with safety and health standards. The Consultation Service ace hazards and helps employers develop and staff identifies workpl improve the company , ’s Injury and Illness Prevention Program (IIPP) as per Title 8 California Code of Regulations ( T8 CCR §3203 ) . When the Consultation Service staff visits a job site and reviews the contractor’ s IIPP, they not only identify occupational hazards, but also point out areas where the safety orders require specific actions and recommend ways to achieve compliance. In contrast to DOSH Enforcement, the Consultation Service staff does not issue citations or penalties. Instead, they give the contractor a report that outlines the conditions found and describe s the need for corrective action. Occupational Safety and Healt h Standards Board The Occupational Safety and Health Standards Board adopts, amends , or repeals California safety and health standards. (State standards must be at least as strict as the f ederal OSHA standards.) The Standards Board also has the authority t o grant petitions to adopt or amend regulations, and to grant variances to e mployers. Anyone may exercise their say in standards development by participating at the Standards Board ’s public hearings or as members of advisory committees. To keep current on any proposed or new construction safety orders , such as washing facilities at construction job sites ( T8 CCR §1 527 ) and fall protection for residential- type framing activities ( T8 CCR §1716.2 ) , visit the w ebsite at www.dir.ca.gov/OSHSB .

161 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 129 Occupational Safety and Health Appeals Board The Occupational Safety and Health Appeals Board hears and makes , and decisions on appeals concerning citations, orders, civil penalties oyers, abatement dates issued by DOSH Enforcement. Empl employees, and employee representatives may participate in proceedings of the Appeals Board. Other Agencies Share Responsibility The following agencies share additional responsibilities in the area of hazardous substances: California Department of P ublic Health; ; California Environmental Department of Toxic Substances Control Protection Agency; State Allocation Board, Office of Public School Construction; Department of Resources Recycling and California ; Department of Fish and Game; Californ Recovery ia Highway Patrol; Department of Forestry and Fire Protection ; U.S. California Environmental Protection Agency; and regional control air emissions boards. NOTE: CSLB may take action against a contractor who has violated regulations under the jurisdiction o f other agencies. CONSTRUCTION SAFETY LEGAL REQUIREMENTS Every employer and employee must comply with all applicable occupational safety and health standards, rules, regulations, and orders. The bulk of the legal requirements governing employer responsibil ities and employee rights can be found in the California Labor Code and Title 8 of the California Code of Regulations (CCR). Title 8 regulations that pertain to most construction contractors can be found in the Construction Safety Orders (beginning with s ection 1500) and the General Industry Safety Orders (beginning with also include many other safety section 3200). Title 8 regulations orders that encompass regulations that govern more limited trades and activities, such as the Electrical Safety Orders and Compressed Air Safety Orders. Title 8 include s requirements for permits, safe work practices, operations , and equipment. In some cases, detailed specifications, which apply to construction work, are included. Many of the employer responsibilities and emplo yee rights are detailed in the Cal/OSHA poster, Safety and Health Protection on the Job . Each construction contractor is required to post at least one copy of this poster and the Code of Safe Practices at each location where employees report to work each d ay, or, if the employees do not usually work at or report to a single establishment, the notice shall be posted at the location(s) from which the employees operate to carry out their activities ( Labor Code §6 408(a); T8 CCR

162 130 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS §340 ). The notice must be posted in a conspicuous place where notices to employees are customarily posted. MULTI EMPLOYER WORK SITES PLE sites may have multiple Construction and non -construction work T8 CCR § §336.10- 336.11 ) . When multiple employers are ( employers ed the following enforcement criteria to involved, DOSH has develop categorize employers into four types: : the employer whose employees were ● Exposing Employer exposed to the hazard; Creating Employer : the employer who actually created the ● hazard; ● Controlling Employer : the employer who was responsible, by contract or who has the authority for ensuring tha t the hazardous condition is corrected; or ● Correcting Employer : the employer who had the responsibility for actually correcting the hazard. : DOSH may cite the creating, c , or correcting NOTE ontrolling employers regardless of whether or not their own empl oyees were exposed to the hazard. DOSH may determine if the available information indicates that the exposing e (5) criteria for an mployer meets each of the following five affirmative defense: 1) The employer did not create the hazard; 2) The employer did not have the responsibility or the authority to have the hazard corrected; 3) The employer did not have the ability to correct or remove the hazard; monstrate that the c reating, controlling 4) The employer can de , and/ or correcting employers, as appropriate , were specifically notified or were aware of the hazards to which the employees were exposed; and 5) The employer took appropriate feasible steps to protect the employees from the hazard; instructed them to recognize the hazard; and, where necessary, info rmed them of how to avoid dangers associated with it, including removing the employees from the job if the hazard was extreme and there was no other way to protect them from the hazard.

163 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 131 INJURY AND ILLNESS PREVENTION PROGRAM (IIPP) Accidents are costly. The se costs may include: Productive time lost by the injured employee; ● Productive time lost by employees and supervisors attending to ● the accident victim; ● Clean -up and start -up of operations interrupted by the accident; Time to hire or to retrain other individuals to replace the ● injured employee until his or her return; ● Time and costs for repair or replacement of any damaged equipment or materials; ● Costs of continuing all or part of the employee ’s wages, in addition to compensation; Reduced moral e among employees, and perhaps lower efficiency; ● ● Increased workers ’ compensation insurance rates; ● Costs of completing paperwork generated by the incident; and ● Costs of legal representation in civil and criminal cases. required to provide a safe and In California, every employer is healthful workplace for his or her employees by doing everything reasonably necessary to protect their lives, safety, and health ( Labor Code §§6400, 6401, 6401.7, 6402, and 6403 ). The key to ining a safe and healthful workplace accomplishing this goal of mainta uirement that every employer have and maintain an is the req effective IIPP. Senate Bill 198 placed strict guidelines for such a program into law in 1989. The regulations required by that law, and other related laws, can be found in T 8 CCR §§1509, 1510, 1511, 1512, 1514 , and 3203 . Professional consultants from the Cal/OSHA Consultation Service are available to provide free assistance to employers and employees on how to set up an effective IIPP at your site. These con sultants can also provide saf ety and health training job to site. employees at your job Required IIPP Elements Your IIPP must be a WRITTEN PLAN that includes procedures and is PUT INTO PRACTICE and DOCUMENTED. Some of the requirements are : ● Management commitment to safety and health This commitment should be evident from strong organizational policies, procedures, incentives , and disciplinary actions that

164 132 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS ensure employee compliance with safe and healthful work also is demonstrated by practices. Management commitme nt and —financial, material, the allocation of company resources —for identifying and controlling hazards, purchasing personnel protective equipment , and training employees in safety and health. Identify the person(s ) with program i ● mplementation authority and responsibili ty ● System for communicating with employees in a way readily understan dable Communicate with employees by all affected employees to occupational on matters related safety and health. Employees should be encoura ged t o report unsafe conditions with the assurance that management will take action to correct the problem and that the employee need not fear reprisal for reporting the problem. ○ As part of this communication system, every construction written Code of Safe Practices. contractor must adopt a The contents must include language equivalent to the applicable general statements included in Plate A -3 of the appendix to the Construction Safety Orders in Title 8. In addition, each employer should include other safety guidelines that fit the operations more exactly. The Code of Safe Practices must be posted at a conspicuous location at each job site office or be provided to each supervisory employee, who shall have it readily available. ● System for identifying, evaluating and controlling existing or potential workplace hazards ○ No employee shall be required or knowingly permitted to work in an unsafe place, unless for the purpose of making s have been it safe, and then, only after proper precaution taken to protect the employee while doing such work. ○ Prior to starting work, the employer must survey the job site to determine what hazards may be involved and what safeguards will be necessary to ensure that the work is performed safely. ○ Periodic, scheduled inspections must be conducted to identify unsafe conditions and work practices. The frequency of inspections should be determined by the type and magnitude of the hazards, the proficiency of the employees, how recently any changes in eq uipment or

165 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 133 procedures were introduced, and the history of workplace injuries and illnesses. Occupational illnesses and accidents must be ○ investigated. The investigatory procedures must include a written report of each event. The employer shall permit only qualified persons to ○ operate equipment and machinery. Every employer must provide and require employees to ○ use safety devices. Employers must adopt and require the use of methods and procedures that are reasonably adequate to make the work and workplace safe. Develop, maintain , and docu ment training programs for ● supervisors and employees Every employer program should provide information about general safe work practices, plus specific ins truction with regard to hazards unique to a job assignment. ○ When employees are first hir ed, they must be given instructions regarding job hazards, safet y precautions, ’s Code of Safe Practices. and the employer ○ Employees given new job assignments must be given training for this work. Supervisors must conduct “toolbox” or “tailgate” safety ○ meetings with their crews at least every ten (10) working days. ○ Where employees may be subject ed to known or new job site hazards, such as flammable liquids, gases, poisons, caustics, harmful plants and animals, toxic materials, confined spaces, etc., they must be instructed in the recognition of the hazard, in the procedures for protecting themselves from injury, and in the first aid procedure in the event of injury. (NOTE: Specific requirements pertaining to exposure to hazardous substances are discussed below.) ○ Employees need instruction whenever new protective equipment or different work practices are to be used for existing hazards.

166 134 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS Ensure the availability of emergency medical services ● employees for suitable number of appropriately Every employer must have a to render first aid. A first aid kit trained and available staff must be present at each workplace. Keep in mind that safety regulations and codes establish minimum standards. It is up to each contractor to implement a comprehensive safety program that goes above and beyond these safety standards. EMPLOYEE COMPLAINT RIGHTS AND PROTECTIONS Employees or their representatives who believe that unsafe or unhealthful conditions exist in their workplace have the right to file a office. DOSH complaint with any DOSH Enforcement Unit Enforcement must investigate good faith complaints of serious violations within three (3) working days of receiving the complaint. -serious violations must be investigated within 14 Complaints of non Labor Code §6 309 ). calendar days ( The name of the person making the complaint will be kept confidential by DOSH ( Labor Code §6 309 ). Employees may not be fired or otherwise punished for filing a good faith complaint with DOSH or for cooperating in any investigation of unsafe working Labor Code §6 ). Employees have a conditions or work practices ( 310 right to refuse to perform work that would violate any Labor Code provision or occupational safety or health regulation, where the violation would create a real and apparent hazard to the employee or other employees. No employee may be laid off or disch arged for refusing to perform such work ( Labor Code §6 311 ). INJURY AND ILLNESS REPORTING AND RECORDKEEPING REQUIREMENTS In addition to the documentation of safety inspections and employee training described above, employers must file reports and maintain records of occupational injuries or illnesses. There are specific requirements for the form and content of this information. Reporting Requirements ● Employers must report immediately by telephone or other method to the nearest DOSH district office any wor k-related fatality or serious injury or illness suffered by an employee. “Immediately” means as soon as practically possible, but not longer than eight ( 8) hours after the employer knows of, or,

167 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 135 with diligent inquiry would have known of, the incident ( T 8 ). “Serious injury or illness,” in general, means any §342 CCR -related injury or illness that requires inpatient employment hospitalization for a period in excess of 24 hours for other than medical observation, or in which an employee suffers a loss of any m ember of the body or suffers any serious degree of permanent disfigurement ( 330 ). T 8 CCR § Employers must file a complete report of every occupational ● injury or illness that results in absence from work for a full day y or illness, or which or shift beyond the date of the injur Labor Code requires medical treatment beyond first aid ( a); Labor Code § T8 CCR § 14001 ). §5401( 6409.1; The report must be made within five (5) days of the incident, Employer using Form 5020, “ ’s Report of Occupational Injury or Illness ,” published by the Department of Industrial Relations, Division of Labor Statistics and Research. In the event an employer has filed a report of injury or illness, and the employee subsequently dies as a result of the reported injury or illness, the emplo yer must file an amended report, which indicates the death. This amended report must be filed within five (5) days after the employer is notified or learns of the death. Self -insured employers shall report directly to the Division. Employers who are insure d by ’ compensation insurance carrier shall file the report a workers with the carrier. NOTE: Insured employers are required to file a report with their carriers of EVERY work -related illness or injury ( Labor Code ). §3760 Recordkeeping Requirements of accidents, work -related injuries, illnesses , and property Records losses serve a valuable purpose. As stated above, occupational illnesses, accidents , and near misses must be investigated. S tandard investigatory procedures must include a written report of each incident. Records of scheduled periodic hazard identification inspections must be maintained, as well as safety training that employees and supervisors have received. When all of these records are reviewed together, causes of the injuries and accidents can be identified. need s different or An employer may determine he or she additional inspection and/or training practices that will more likely prevent similar illnesses or accidents from recurring. Employers must keep records when injuries or illnesses occur on the Cal/OSHA Form 300, “ Log of Work -Related Injuries and Illnesses . ” The only exception applies to employers who had no more than ten (10) employees for all shifts combined during any 24- hour period

168 136 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS during the previous calendar year. Employees, former employees, and . their representatives shall have access to the Form 300 l og s 14300– , see Title 8 CCR Section For more details on this regulation 14300.48. PERMITS Permits must be obtained from the DOSH Enforcement Unit before owing kinds of work ( T8 CCR § 341 ): an employer undertakes the foll Construction of trenches or excavations which are five (5) feet ● or more deep, into which a person is required to descend; or ● Construction of any building, structure, falsework, scaffolding more than three (3) stories high ( One story is 12 feet in heigh t. A tower crane erected on a construction project is considered, for the purposes of these requirements, to be a .); structure ● Demolition of any building, structure, or the dismantling of falsework, or scaffolding more than three (3) stories high or the equivalent height (36 feet) ; and ● rground use of diesel engines for work in mines and Unde . tunnels act the local DOSH Enforcement Unit The contractor should cont office to obtain information regarding who must obtain the permit, when the permit must be obt ained, the fees charged to obtain the permit, and any additional requirements the employer must comply with before the permit can be granted. Annual permits may be obtained for the erection and dismantling of and construction of scaffolds, falsework, vertical shoring systems, excavations or trenches ( T8 CCR § 341.1 ). The DOSH Enforcement Unit may conduct an investigation or require a safety conference prior to issuance of the permit. Employees or their representatives are to be included in any required pre -job safety conference ( T8 CCR § 341.1 ). Permits must be posted at or near each place of employment requiring a permit ( T8 CCR § 341.4 ). An employer who is denied a permit by DOSH Enforcement Unit the may appeal that denial to the Director of the Department of Industrial Relations ( T8 CCR §341.2 ). The DOSH Enforcement Unit may at any time, upon a showing of good cause and after notice and an opportunity to be heard, revoke or

169 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 137 suspend a permit ( 341.5 ). The employer may appeal the T 8 CCR § revocation or suspension to the Director. VARIANCES Permanent Variance An employer may apply to the Standards Board for a permanent variance from a California occupational safety and health standard, order, or special order, if the employer demonstrates that an , device, or process ca n be used that will provide equivalent method equal or better safety for employees. Applications are considered at variance hearings conducted by the Standards Board. Rules of procedure are contained in Chapter 3.5 of Title 8 of the California Code of Regulations. Temporary Variance DOSH may grant a temporary variance to employers if the employer files a proper application and establishes that Labor Code § 6450– ( §6457 ): ● He or she is unable to comply with a standard by its effective date because of the unavailability of professional or technical personnel or of materials and equipment needed to comply with the standard or because necessary construction or alter ation of facilities cannot be completed by the effective date; ● is taking all available steps to safeguard employees He or she against the hazards covered by the standard; and ● He or she has an effective program for coming into compliance with the standard as quickly as it can be put into practice . A temporary variance of up to one (1) year may be granted only after notice is given to employees and a hearing is held by DOSH. The temporary order may be renewed up to two (2) times, for a maximum of 180 days each time. Anyone adversely affected by the granting or denial of a temporary variance may ap peal that action to the Standards Board. INVESTIGATIONS OF UNSAFE CONDITIONS Employers may be subject to an inspection (without advance notice) in response to one or more of the DOSH criteria: imminent danger, fatality or serious accident, investigations o f serious injuries or illness, employee complaint, public complaint, high hazards list, permits, etc. Also, firms in industries with higher -than -average potential risk are scheduled for

170 138 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS inspections. During the inspection, employees may be interview ed and photographs may be taken. An employee representative must have an opportunity to accompany a nvestigator on work site inspections DOSH i 6314 ). ( Labor Code § from having to reveal trade secrets as a otected The employer is pr result of an inspection or subsequ ent proceedings ( Labor Code § §6322 ). and 6396 nion of the DOSH Enforcement o When, in the opi fficer, a place of employment or piece of equipment is in a dangerous condition, is not properly guarded, or is dangerously placed so as to constitute an azard to employees, DOSH may prohibit entry into the imminent h area or use of the equipment (other than, with DOSH approval, to eliminate the dangerous co ndition). The DOSH Enforcement o fficer will attach a conspicuous notice stating the limitations. The notice remain in place until must removed by a DOSH Enforcement officer after the area or equipment is made safe and the required safeguards or safety devices are provided ( Labor Code § 6325 ). As a result of the investigation, the employer may receive a citation, noti ce, special order, information memorandum, or an order to take special action for any alleged violation of standards, rules, orders , or regulations. Violations will be classified as serious, general, or regulatory, and may be designated as repeat or willfu l. Citations will have financial penalty assessments. Any citation (or copy of a citation) issued for safety and health violations must be posted at or near the place of violation where it is readily observable by affected employees for a period of three ( 3) working days or until the condition is corrected, whichever is longer Labor Code § 6318; T8 CCR ( ). §332.4 The employer may contest any citations, penalties, and abatement (correction) requirements through both formal and informal proceedings ( Labor Code § 6319 ). Penalties will be determined , based on the gravity and severity of the violation ( 319, §6423- 6435 ). Labor Code §6 Penalties may be adjusted, based on: ● The size of the business; ● The good faith of the employer, including timely abatement; and Th e employer ’s history of previous violations. ●

171 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 139 Employers who do not have an Injury and Illness Prevention Program shall receive no adjustment for either good faith or a positive history 6428 ( Labor Code § ). The law contains other misdemeanor provisions related to such matters as revealing trade secrets and unauthorized advance notice of an inspection. If, after inspection or investigation, the DOSH Enforcement Unit issues a citation for a serious violation, it may conduct a re inspection d fixed for abatement of the violation ( Labor at the end of the perio §6320 Code ). HAZARDOUS SUBSTANCES Information and Training All employers who use hazardous substances and whose employees might be exposed under either normal work conditions or reasonably conditions resulting from workplace foreseeable emergency operations (e. g., equipment failure, rupture of containers, failure of control equipment, etc.) must provide their employees with information and training about these substances, the hazards of these substances, and how to handle these substances under normal and emergency conditions. Manufacturers of these substances must prepare Material Safety Data Sheets (MSDS), and the manufacturers or sellers of these substances must provide the MSDS to anyone who purchases them. Employers and employees can find out what hazards are associated with particular substances or chemicals in the workplace, the recommended exposure levels, and the precautions to take in using these substances or chemicals by writing to: SIS (Hazard Evalu ation System and HE Information Service) 850 Marina Bay Parkway rd Bldg. P, 3 Floor Richmond , CA 94804 (510) 620- 5757 www.cdph.ca.gov/programs/hesis/Pages/default.aspx When you contact H ESIS, include the following information: ● Your name; ● Job title; ● Mailing address;

172 140 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS Phone number (include area code); ● Chemical name (not just the product name); ● ● How the chemical is used; How any exposure to the chemical occurred; and ● When the exposure occurred. ● California residents may also call the following numbers: WORKPLACE HAZARD HELPLINE HESIS ... System (English) 282- 5516 (866) ublications ... (866) 627- 1586 Free p on workplace hazards ... (510) 620- 5743 Fax Employers must notify any employee who has been or is being exposed to toxic subs tances or harmful physical agents in concentrations at levels exceeding those prescribed by applicable standards, orders, or special orders, and inform any employee so exposed of corrective action being taken ( Labor Code § 6408(e) ). Employers must allow emp loyees to observe monitoring or measuring Labor Code § ). of exposure to hazards ( 6408(c) Employees must have access to their medical records and exposure records to potentially toxic materials or harmful physical agents Labor Code § 6408(d ); T8 CCR §3204 ( ). Hazardous Substance Removal Work and Remedial Actions NOTE: The removal of hazardous substances and related remedial actions do not include asbestos -related work, as defined in Labor Code §6501.8, or work related to a hazardous substance spill on a highway ( B&P Code §7058.7 ). As of 1988, a contractor must have passed an approved hazardous emoval certification exam before removing hazardous substance r substances or taking related remedial actions (as defined in Chapter 6.8 of Division 20 of the Health and Safety Code) in cases that involve digging into the surface of the earth and removing the material from: ● A site listed pursuant to Section 25356 of the Health and Safety Code; ● A site listed as a hazardous waste site by the Department of Toxic Substances Control ; or ● A site listed on the National Priorities List compiled pursuant to the Comprehensive Envi ronmental Response,

173 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 141 Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.). may require currently certified licensees to pass additional CSLB updated, approved hazardous substance r s emoval certification exam based on new public or occupat ional health and safety information ( §7058.7; Labor Code § 142.7 ). B&P Code Hazardous Waste Operations Contractors must also comply with the “ ” ( Labor Code § 142.7; and Emergency Response Standards T8 CCR §5192 ). These require: ● Specific work practices; ● The certification of employees and supervisors involved in hazardous substance removal work; ● The designation of a qualified person who shall be responsible for scheduling any air sampling, laboratory calibration of sampling e quipment, evaluation of soil or other contaminated materials sampling results, and for conducting any equipment testing and evaluating the results of the tests; and ● Holding a safety and health conference for all hazardous substance removal jobs before th e start of actual work. The conference shall include representatives of the owner or contracting agency, the contractor, the employer, employees, and employee representatives. It shall include a discussion of e means that the employer ’s safety and health program and th the to provide a safe and healthy place employer intends to use of employment. hazardous substance work Any contractor who engages in , or any contractor or employer who either knowingly or negligently enters to do hazardous substance work, into a contract with another person when that person is required to be but is not certified pursuant to B&P §7058.7, is subject to penalty ( B&P Code §7028.1 and Code 7118.6 ). Lead in Construction Work This section applies to all construction work where an em ployee may be exposed to lead. Construction work, in general, is defined as work for construction, alteration , and/or repair, including painting and decoration ( T8 CCR § 1532.1 ). Lead is defined as metallic lead, all inorganic lead compounds, and organic le ad soaps. Employers shall provide a written lead -work pre -job notification to the nearest DOSH District office as per T 8 CCR § 1532.1 (p)(1) to (p)(4) when work is planned that includes any of the tasks listed in

174 142 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS subsection (d)(2). Also , employers are responsible for being knowledgeable about the permissible exposure limit (PEL) ; exposure assessment; ; respiratory protection ; protective methods of compliance work clothing and equipment ; housekeeping procedures ; and hygiene facilities, practices, and establish ing regulated areas. The employer must also know the medical surveillance program and medical removal protection practices. Lastly, the employer is to display appropriate signs and allow employees to observe monitoring procedures. The employer is required to provide employee information, training, T8 CCR § and certification as per 8 CCR 1532.1(l). As required by T §1532.1(l) (3), the employer shall ensure that all employees and -related construction work are supervisors that perform any lead dited training provider and are then certified by trained by an accre the California Department of Health Services. CARCINOGEN CONTROL Employers in California must meet strict standards for the occupational health and safety of employees who handle carcinogenic (cancer -causi ng) substances on their jobs —for example, asbestos. These standards are part of the “ Construction Safety Orders and General Industry Safety Orders ” in Title 8 of the California Code of Regulations. Due to the extent and complexity of the many code requirem ents, contractors are urged to read the regulations themselves. Regulated carcinogen means a recognized cancer- causing substance, compound, mixture, or product regulated by Sections 1529, 1532, 1535, 8358, or Article 110 S ections 5200- 5220. Registration Required for Carcinogen Use Businesses involved in the use of carcinogens must inform DOSH as per 5203. Report of Use must be mailed to: T8 CCR § Occupational Carcinogen Control Unit Division of Occupational Safety and Health 1515 Clay Street, Suite 1901 Oakland , CA 94612 Requirements for Asbestos -Related Work Asbestos is the most common carcinogen in construction and demolition work. Persons engaged in insulation, plasterboard, siding , and ceiling plaster work risk higher -than -usual exposure to asbestos. Failu re to adopt safe work practices for handling asbestos has caused many employees to develop asbestos -related disabilities and fatal diseases. It is your responsibility to familiarize yourself with the laws pertaining to asbestos.

175 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 143 The owner of a commercial o r industrial building or structure, an - employer, or a contractor who engages in, or contracts for, asbestos asbestos is related work must make a good faith effort to determine if present before work begins . The contractor or employer must first ask the own er of a building or structure built prior to 1978 if asbestos is penalty ( Labor Code present. Failure to do so may result in a §§6501.9 and 6505.5 ). Similar requirements exist in T8 CCR Communic ation of Hazards and Duties of § 1529(k)(1) and (2), “ Buildin g and Facility O wners. ” If DOSH has reasonable cause to believe that any workplace contains asbestos, and if there appears to be inadequate protection for airborne asbestos employees at that workplace from the hazards of ibiting use ( fibers, DOSH may issue an order proh Labor Code ). §6325.5 “Asbestos -related work” means any activity which , by disturbing asbestos- containing construction materials , may release asbestos fibers into the air and which is not related to its manufacture, the -bearing ore or materials, or the mining or excavation of asbestos installation or repair of automotive materials containing asbestos ( 6501.8 ). Labor Code § “Asbestos -containing construction material” means any manufactured construction materi al which contains more than one -tenth o f one percent (0.1%) asbestos by weight ( T8 CCR § 341.6 ). Asbestos Abatement -related work that involves A contractor may not engage in asbestos 100 square feet or more of surface area of asbestos -containing materials unless the qualifier for the license h olds an asbestos C-22 Asbestos Abatement classification and is certification or a registered by DOSH . Exceptions include contractors involved with the installation, maintenance, and repair of asbestos cement pipe or sheets, vinyl asbestos floor materials, or asbestos bituminous or resinous materials ( B&P Code §§7058.5 and , and T16 CCR § 7065.01 7058.5 ). Any contractor who engages in asbestos -related work , or any contractor or employer who either knowingly or negligently enters into a contract with another p -related work, when erson to do asbestos that person is required to be but is not certified pursuant to B&P Code or does not hold the C -22 Asbestos Abatement license §7058.5, pursuant to T16 CCR § 832.22 , or is not registered by DOSH, is subject to penalty ( B&P Code §§7028.1 and 7118.5 ). A contractor who is not certified for asbestos -related work or does not hold the C -22 Asbestos Abatement license may bid on a project involving this work

176 144 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS if a contractor who is properly certified or licensed by CSLB and -related work. regi stered by DOSH performs the asbestos Registration Abatement Asbestos All contractors who engage in asbestos -related work that involves 100 square feet or more of surface area of asbestos -containing material at site must tered by DOSH , as well as CSLB a single work be regis certified or licensed in the C -22 Asbestos Abatement classification . A site” includes all buildings, structures, premises, “single work fixtures, machinery , or other areas where asbestos -containing be handled during the course of the work construction material will , whether pursuant to single or for which the employer has contracted multiple contracts with the same hirer ( La bor Code §6501.5; T8 CCR ). §341.6 REGISTRATION. All THERE ARE NO EXEMPTIONS FROM DOSH contractors who pe rform asbestos -related work must be registered with DOSH. In addition, the State of California, a city, city and county, county, district, or public utility subject to the jurisdiction of the Public Utilities Commission shall be required to apply for a reg istration through the designated chief executive officer of that body. No registration fees shall be required, however, of any public agencies ( 6508.5). Labor Code § DOSH registration applications, applications for renewal, and information can be obtained f ’ Registration rom Asbestos Contractors Unit (ACRU) at: ACRU -DOSH P.O. Box 420603 , CA 94 142 San Francisco Email: [email protected] Notification and Posting of Asbestos -Related Work When an employer will be conducting separ ate jobs or phases of work that require asbestos removal registration, or where the work process may differ or is performed at noncontiguous locations, written notice must be provided t o the nearest DOSH Enforcement d istrict office prior to commencement of any work ( 6501.5; T8 CCR Labor Code § §341.7 ). Furthermore, the employer must post a sign readable at 20 feet at the location where any asbestos -related work is to be conducted that states “Danger –Asbestos. Cancer and Lung Hazard. Keep Out.” Asbestos -Rel ated Work in Schools When asbestos- related work is done in elementary or secondary schools, either public or private, additional standards must be met as

177 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 145 per , Code of Federal Regulations ( CFR) Part 763, Asbestos Title 40 Hazard Emergency Response Act (AHERA). Local education agencies are required to use only AHERA -accredited persons to perform the following tasks: -containing materials in school ● Inspecting for asbestos buildings; Preparing management plans concerning the presence of ● containing materials in schools; asbestos- ● Designing and drafting specifications for asbestos abatement projects; and Supervising and conducting the abatement work. ● Persons seeking accreditation must complete a training course approved by DOSH and pass an examination for that course. There are separate course requirements for inspectors, management planners, project designers, asbes tos abatement contractors and supervisors, and for asbestos abatement workers. NOTE: For schools to receive funding for asbestos abatement programs, they must comply with the rules and regulations of the State Allocation Board, Office of Public School Cons truction (OPSC). Since prompt payment to the contractor may be closely related to the school ’s receipt of OPSC funding, it is important that the contractor be aware of and encourage compliance with the OPSC requirements. Renovation and Demolition Work vation and demolition jobs are subject to the National Emission Reno Standards for Hazardous Air Pollutants (NESHAP), which are enforced by the f ederal Environmental Protection Agency and local air quality and air pollution districts. Before a renovation or demolition job begins on a site that may include asbestos -containing materials, one of these agencies must be notified. There are strict penalties for violations of the NESHAP requirements. Disposal of Asbestos The California Department of Toxic Substances Control, Hazardous Waste Management Branch, enforces the requirements governing the disposal of waste that contains asbestos. These requirements include the following ( Health and Safety Code § 25143.7 ): ● If a landfill is used, it must meet waste disposal requirements issued by the regional w ater quality control board that allow s the disposal of such waste; and

178 146 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS must be handled and disposed of in accordance with The waste ● Public ( §94-469 ) and all the Toxic Substances Control Act Law other applicable laws and regulations. CONFINED SPACES Safety and health practices for confined spaces are outlined in Title 8 of the California Code of Regulations S ections 5156, 5157, and 5158 8 CCR Labor Code § ). A permit -required confined space ( ( 142.3 T §5157 ) is defined as a space large enough and so configured that an employee can bodily enter and perform assigned work; has limited or restricted means for entry or exit; and is not designed for continuous employee occupancy . In other confined space operations ( T 8 CCR §5158 ) , confined space is defined by the concurrent existence of conditions where the existing ventilation is insufficient to remove dangerous air contamination, oxygen enrichment and/or oxygen that may exist or develop ; and where ready access or egress deficiency for the removal of a suddenly disabled employee is difficult due to the location or size of the openings. EXCAVATIONS AND TRENCHES For regulations relating to permits for excavations and trenches, refer to the California Code of Regulations Title 8, Chapter 3.2, Article 2, Section 341 of the California Occupational Safety and Health Regulations (Cal/OSHA). For definitions, general requirements, and information pertaining to excavations and trenching saf ety orders, see Title 8 of the California Code of Regulations, § 1504, 1539– 1547 and Labor Code § 142.3.

179 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 147 HOW TO OBTAIN ADDITIONAL INFORMATION WHERE TO GET IT WHAT YOU NEED Browse and order free DOSH www.dir.ca.gov/dosh/puborder.asp publications Barcl ays Official CA Code of Regulations California Occupational Safety and Health Standards — Title 8 California P.O. Box 2006 Code of Regulations, Industrial San Francisco, CA 94126 . The entire Title 8 and the Relations 3600, or, 888- (800) Safety Orders for each industry are www.dir.ca.gov . available for purchase Information concerning California Cal/OSHA Consultation Services Offices on the next page) or order posters (see list Occupational Safety and Health requirements online at: www.dir.ca.gov/wpnodb.html Free on -site consultation to discuss particular problems and obtain assistance and advice DOSH workplace posters Department of Industrial Relations Recordkeeping and Reporting of Labor Statistics and Research Division Requirements P.O. Box 420603 Log and Summary of Occupational San Francisco, CA 94142 Injuries and Illnesses (OSHA F orm 300) (415) 703- 3020 — California Work Injuries and Illnesses Annual Report Quarterly Work Injuries and Illnesses— Report

180 148 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS Ca l/OSHA Enforcement Branch Regional and District Offices 3419 Broadway Street, Suite H8 3700 American (707) 649- American Canyon, CA 94503 3712 Canyon Fax (707) 649- [email protected] 7718 Meany Avenue (661) 588- 6400 Bakersfield Bakersfield, CA 93008 6428 Fax (661) 588- [email protected] Foster City 5 East Hillsdale Blvd., Suite 110 (650) 573- 3812 106 Fax (650) 573- 3817 Foster City, CA 94404 [email protected] 39141 Civic Center Dr., Suite 310 (510) 794- Fremont 2521 -5818 Fax (510) 794- 3889 Fremont, CA 94538 [email protected] 2550 Mariposa Street, Room 4000 (559) 445- 5302 Fresno Fax (559) 445- 5786 Fresno, CA 93721 [email protected] 3939 Atlantic Avenue (31 0) 516- 3734 Long Beach Long Beach, CA 90807 Fax (562) 426- 8341 [email protected] 320 West 4th Street, Suite 670 (213) 576- 7451 Los Angeles Los Angeles, CA 90013 Fax (213) 576- 7461 [email protected] Modesto 4206 Technology D rive, Suite 3 (209) 545- 7310 Modesto, CA 95356 Fax (209) 545- 7313 [email protected] 750 Royal Oaks Drive, Suite 104 (regional office) (626) 471- 9122 Monrovia a, CA 91016 Fax (626) 471- 9133 Monrovi [email protected] 1515 Clay Street, Suite 1303 (510) 622- Oakland 2916 Fax (510) 622- 2908 Oakland, CA 94612 .gov [email protected] 381 Hemsted Drive (530) 224- 4743 Redding Redding, CA 96002 Fax (530) 224- 4747 [email protected] Sacramento 2424 Arden Way, Suite 300 (regional office) (916) 263- 2803 Sacramento, CA 95825 Fax (916) 263- 282 4 [email protected] 464 W. 4th Street, Suite 332 (909) 383- 4321 San Bernardino San Bernardino, CA 92401 Fax (909) 383- 6789 [email protected] San Diego 757 5 Metropolitan Dr ive, Suite 207 (619) 767- 2280 Fax (619) 767- 2299 San Diego, CA 92108 [email protected] San Francisco 455 Golden Gate Avenue, Room 9516 (regional office) (415) 557- 0100 San Francisco, CA 94102 Fax (415) 557- 0123 [email protected]

181 CHAPTER 7. SAFETY & HEALTH IN CONSTRUCTI ON 149 Santa Ana (regional office) (714) 558- 4451 2000 E. McFadden Avenue, Suite 122 2035 Santa Ana, CA 92705 Fax (714) 558- [email protected] 615 0 Van Nuy s Boulevard, Suite 405 (818) 901- 5403 Van Nuys 5578 Van Nuys, CA 91401 Fax (818) 901- [email protected] High Hazard Compliance Unit 1515 Clay Street, Suite 1303 (510) 62 2-3009 Oakland Oakland, CA 94612 Fax (510) 622- 3025 2000 E. McFadden Ave., Suite 111 (714) 567- 7100 Santa Ana Santa Ana, CA 92705 Fax (714) 567- 6074 —Consultation Cal/OSHA Consultation Service Area Offices 9424 Toll- Free Number (800) 963- 2424 Arden Way, Suite 410 Northern California (916) 263- 0704 Sacramento, CA 95825 1515 Clay Street, Suite 1103 San Francisco Bay Area Oakland, CA 94612 (510) 622- 2891 Central Valley 1901 North Gateway Blvd., Suite 102 Fresno, CA 93727 (559) 454- 1295 6150 Van Nuys Blvd., Suite 307 San Fernando Valley Van Nuys, CA 9140 1 (818) 901- 5754 Los Angeles /Orange 1 Centerpointe Drive, Suite 150 La Palma, CA 90623 (714) 562- 5525 464 W. 4th San Bernardino Street, Suite 339 4567 San Bernardino, CA 92401 (909) 383- 757 5 Metropolitan Drive, Suite 204 San Diego San Diego, CA 92108 (619) 767- 2060 HQ Process Safety Management Unit Concord 0 Civic Court, Suite 550 (925) 602- 2665 145 Concord, CA 94520 Fax (925) 602- 2668 [email protected] Santa Ana 2000 E. McFadden Ave., Suite 111 (714) 567- 7100 Santa Ana, CA 92705 Fax (714) 567- 6074 Mining and Tunneling (916) 574- 2540 Sacramento 2424 Arden Way, Suite 125 Fax (916) 574- 2542 Sacramento, CA 95825 DOSHM%[email protected] San Bernardi no 464 West 4th Street, Suite 354 (909) 383- 6782 Fax (909) 388- 7132 San Bernardino, CA 92401 [email protected] Van Nuys 615 0 Van Nuys Boulevard, Suite 310 (818) 901- 5420 Van Nuys, CA 91401 Fax (818) 901- 55 79 [email protected]

182 150 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS Other Resources Occupational Safety & Health Standards B oard (916) 274- 5721 2520 Venture Oaks Way, Suite 350 Sacramento, CA 95833 [email protected] Occupational Safety & Health Appeals B oard 300 (916) 274- 5751 2520 Venture Oaks Way, Suite Sacramento, CA 95833 [email protected] DOSH Asbestos Contractors Registration Unit P.O. Box 420603 San Francisco , CA 94142 [email protected] 574- 2993 (916) Department of Toxic Substances Control 1001 I Street, P.O. Box 806 Sacramento, CA 95812 (800) 728- 6942 State Allocation Board/Office of Public School Construction rd 707 3 Str eet, P.O. Box 980610 (916) 376- 5000 West Sacramento, CA 95605

183 Chapter 8. Regional Notification Centers: Underground Service Alert What is a Regional Notification Center? A regional notification center is an association of owners and operators of subsurface installations (water, gas, electric, telephone, ines, etc.). Damage to these sewer, oil l underground structures may result in the disruption of essential public services and pose a threat to workers, the public, and environmental safety. The purpose of the center is to provide a single telephone number that excavat ors can use to give the center ’s members advance notification of their intent to excavate. The operators of the underground installations are then responsible for providing information about the locations of the facility, or marking or staking the approxim ate location of their facility, or advising the excavator of clearance. O perat ors are only responsible for facilities they own; operators are not responsible for facilities they do not own. Contacting a Regional Notification Center is a R equirement — Not an O ption. California Government Code § 4216- 4216.9 require anyone planning to excavate to contact the appropriate regional notification center at (2) least two working days ( 14 calendar days) but not more than before beginning to excavate. The center will iss ue an inquiry identification number to the excavator as confirmation of the call. NOTE : An excavation permit is not valid without this identification number. Who Must Comply: Any person or entity who plans to disturb the surface of the ● by digging, drilling, boring, etc. ground Exempt Persons: ● An owner of private property who contracts with a California state for an excavation -licensed contractor or subcontractor project tha t does not require an excavation per mit; ● An owner of private property (who is not a licens ed contractor or subcontractor) who , as a part of improving his or her n principal residence , does work that does not require a . excavation permit 151

184 152 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS ether or not an equipment operator is Regardless of wh ● provided for that piece of equipment, any person or private -operated or power entity that leases or rents power -driven excavating or boring equipment to a contractor or ontractors ’ state subcontractor licensed pursuant to c license , if the signed rental agreement between the person or law private entity and the contractor or subcontractor contains the following provision: “It is the sole responsibility of the lessee or renter to follow the requirements of the regional notification center law pursuant to Article 2 (commencing with Section 4216) of Chapter 3.1 of Division 5 of Title 1 of the Government Code. By signing this contract, the lessee or renter accepts all liabilities and responsibilities contained in the regional notification center law.” Steps Required for Compliance: Every contractor or s ● ubcontractor excavating at a job site must have his or her own Underground Service Alert (USA ) identification (ticket) number for the excavation work he or she is performing. ● Excluding emergency situations, parties planning excavation activities must contact the appropriate regional notification center not less than two (2) working days, nor more than 14 calendar days, prior to the start of work. NOTE: THE REGIONAL NOTIFICATION CENTER CALL IS FREE: 811/ (800) 227- 2600. Upon notification, the center will issue an identification (ticket) ● number. The ticket number will be valid for 28 calendar days. If work is to continue past 28 calendar days, the ticket number must be revalidated by again notifying the center before the ticket numb er expires. ● At the site, excavators must clearly mark the boundaries of the work area, usually with white paint . ● Within these boundary markings, operators of underground installations must then provide information about their facilities, mark or stake the location of their lines clearly using the appropriate color to show what type of installation is present, or advise of clearance. ● If, during the course of the job, the operator ’s markings become no longer visible, the excavator must contact the regional cen ter a nd request that the operator re -mark the lines within two (2) working days.

185 CHAPTER 8. REGIONAL NOTIFICATION CENTERS 153 ’s markings, an excavator must determine Using the operator ● or a the exact location of underground facilities with hand tools vacuum device before any power equipment may be used. Helpful Hints Provide the beginning date and time of your excavation. ● Give your name, company ’s name, company ’s mailing address, ● email address, telephone number where you can be contacted, nature of work (grading, drilling, etc.), who m the work is being done for, name of the foreman, permit name and number, if excavation in white paint , and a description has been outlined of the excavation site. your excavation site, giv e the address or ● When describing description where you will be digging (including side of street, corner, footage, and total distances or other the intersection -in measurements), and nearest intersecting street, city , and tie county . Penalties ● Any operator or excavator who NEGLIGENTLY violates any portion of Government Code s ection –4216.9 is subject to s 4216 a fine not to exceed $10,000. Any operator or excavator who KNOWINGLY AND ● any portion of Government Code s ection s WILLFULLY violates 4216 –4216.9 is subject to a fine not to exceed $50,000. ● An excavator also may be subject to t hird party claims for damages arising from the excavation work. ● Violation of Government Code s ections 4216 –4216.9 could result in disciplinary action and possible revocation of your contractor license by CSLB . REGIONAL NOTIFICATION CENTERS Underground Se rvice Alert of Northern California and Nevada: 811/ (800) 227- 2600 www.usasnorth.org Serves the following counties in Northern California: Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte , El Dorado, Fresno, Glenn, Humboldt, Kern, Kings, Lake, Lassen, Madera, Marin, Mariposa, Mendocino, Merced, Modoc, Mono, Monterey, Napa, Nevada, Placer, Plumas, Sacramento, San Benito, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Clara,

186 154 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, , and Yuba. Sutter, Tehama, Trinity, Tulare, Tuolumne, Yolo . Serves the entire state of Nevada nday –Friday, 6 a.m. –7 p.m. , excluding holidays Service: Mo Underground Service Alert of Southern C alifornia— 811/ 2600 (800) 227- www.digalert.org Serves the following counties in Southern California: Imperial, Inyo, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura Service: Monday –Friday, 6 a.m. –7 p.m., excluding holidays

187 Chapter 9. Preservation of Native American Remains California has one of the largest Native American populations in the d States. With approximately 115 feder ally recognized tribes Unite more applying for recognition, California Native American lands and include reservations and rancherias in over half of California’s counties. H istorically, Native American land holdings encompassed the entire s tate of California. There has been an increasing rate of vandalism and inadvertent , and destruction of Native American burial grounds, human remains associated grave goods. Several laws provide for the protection and sensitive treatment of these human remains and associated burial goods (Health and Safety Code s ection 7050.5; Public Resources Code sections 5097.9- 5097.991 ). The intent of the law is to provide protection to Native American burials and associated grave goods from vandalism and inadvertent destruction. REPORTING REQUIREMENT In the event of discovery or recognition of any human remains in any er than a dedicated cemetery, there shall be no further location oth excavation or disturbance of the site or nearby area. Upon the discovery of human remains or burial artifacts at any site other than a dedicated cemetery, the following actions MUST BE TAKEN LY: IMMEDIATE Stop work immediately at that site and any nearby area 1. reasonably suspected to have remains, and contact the c ounty coroner. 2. The coroner has two (2) working days to examine the remains after being notified by the person responsible for the excava tion. If the remains are Native American, the coroner has 24 hours to notify the Native American Heritage Commission. 3. The Native American Heritage Commission will immediately notify the person it believes to be the most likely descendant of Native American. the deceased 4. The most likely descendant has 24 hours to make recommendations to the owner, or representative, for the 155

188 156 SECTION IV. CONSTRUCTION STANDARDS & SAFETY REGULATIONS treatment and disposition, with proper dignity, of the remains and grave goods. commendations, If the owner doesn’t accept the descendant’s re 5. the owner or the descendant may request mediation by the Native American Heritage Commission. 6. If mediation fails to provide measures acceptable to the landowner, the landowner or his or her authorized -inter the hum an remains and items representative shall re ed with Native American burials associat ropriate , with app in a location on the property dignity, and not subject to further subsurface disturbance. PENALTIES It is a felony to obtain or possess Native American remains or associated grave go ods. (See Public Resource Code s ections 5097.94, 5097.98, and 5097.99.) Any person who knowingly or willfully removes, obtains , or possesses any Native American remains or associated burial artifacts, without authority of law, is guilty of a felony, punishable state prison. by imprisonment in ADDITIONAL INFORMATION To learn more about the protection and preservation of Native American burial grounds, human remains , and associated grave goods, contact the Native American Heritage Commission at: Native A merican Heritage Commission 1550 Harbor Boulevard, Suite 100 West Sacramento , CA 95691 (916) 373- 3710 Email: [email protected] Website: www.nahc.ca.gov

189 Chapter 10. Construction of Wells LICENSE REQUIRED FOR WATER WELLS Section 13750.5 of the California Water Code states: No person shall undertake to dig, bore, or drill a water well, cathodic protection well, groundwater monitoring well, or geothermal heat exchange well, to deepen or re- perforate such a well, or to abandon or destroy such a well, unless the person responsible for that construction, alteration, destruction, or abandonme nt possesses a C -57 Water Well contractor ’s license. REPORTING REQUIREMEN TS Water Wells, Cathodic Protection Wells , and Monitoring Wells California Water Code s ections 13751 through 13754, requires persons who construct, alter, (including, but not limited to, drilling, deepening, re -perforation, or abandonment), or destroy a wa ter well, cathodic protection well, monitoring well, or geothermal heat exchange well, to file a report of completion, called the “ Well Completion Report ” with the California Department of , DWR 188, Water Resources (DWR) within 60 days after completion of the work. Earlier versions of the form were called “ ’s Report .” Water Well Driller ’s logs.” All of these reports are also called “well logs” or “driller —f or use as a This requirement also applies to persons who convert water well, cathodic protec or monitoring well —a ny oil or tion well, gas well originally constructed under the jurisdiction of the California Department of Conservation. The State of California and other agencies use the information hese reports to evaluate ground water resources, to provided by t protect ground water quality , and to conserve water supplies. In addition, the Water Code was amended in 2002 to require that certain specifics be included in groundwater management plans adopted by local water management agencies. Knowledge of the con struction details of wells and the local geology will be useful in developing such plans. NOTE: Failure to file the Well Completion Report is a Water Code §13754 ) and constitutes cause for misdemeanor ( 157

190 158 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS disciplinary action against your license ( Business contractor and Professions Code s ection 7110 ). here to file How and w The De provide s the proper forms to file partment of Water Resources a report and pertinent sections of the California Water Code. You ct offi ces listed may obtain hard copies from any of the DWR distri below or you can download a blank copy of the “ Well Completion Report ” from DWR ’s web site listed below. If you download the form , be sure to obtain the unique sequential number at the top of the form before downloading. DWR staff uses this numbe r to enter the information into the database. http://www.water.ca.gov/groundwater/wells/well_completion_reports.c fm A number of county health departments also have paper copies available. The How to Fill Out a Well Completion Report - Instruction Pamphlet also can be downloaded from the w ebsite above, as well as several other publications relating to groundwater. Software that rt on your computer and allows you to fill in the Well Completion Repo store it in digital format can be purchased from several firms. Submit your completed reports to the DWR district office that has juris diction over the county where the well is located. For the appropriate office address, find the c ounty and its corresponding district office in the table on the following page .

191 CHAPTER 10. CONSTRUCTION OF WELLS 159 CALIFORNIA DEPARTMENT OF WATER RESOURCES REGIONAL OFFICES Butte, Colusa, Del Norte, Glenn, Northern Region Office Humboldt, Lake, Lassen, 2440 Main Street Modoc, Plumas, Shasta, Red Bluff, CA 96080 Siskiyou, Tehama and Trinity (530) 529- 7300 Alameda, Alpine, Amador, Central North Region Office Calaveras, Contra Costa, El 3500 Industrial Blvd. Dorado, Marin, Mendocino, West Sacramento, CA 95691 Mono (North), Napa, Nevada, (530) 529- 7370 Placer, Sacramento, San Francisco, San Joaquin, San Mateo, Santa Clara, Sierra, So lano, Sonoma, Sutter, Tuolumne, Yolo and Yuba Fresno, Kern (Valley), Kings, South Central Region Office Madera, Mariposa, Merced, 3374 E. Shields Avenue Monterey, San Benito, Santa 6913 Fresno, CA 93726- Cruz, Stanislaus and Tulare (559) 230- 3300 Imperial, Inyo, Kern (Desert), Region Office Southern Los Angeles, Mono (South), Fairmont Avenue 77 Orange, Riverside, San Glendale, CA 91203- 1035 Bernardino, San Diego, San 4600 543- (818) Luis Obispo, Santa Barbara and Ventura

192 160 SECTION IV. CONSTRUCTION STANDARDS & SAF ETY REGULATIONS WELL STANDARDS Standards for construction, modification, rehabilitation, and , and cathodic protection destruction of water wells, monitoring wells are published by DWR in Bulletin 74- 90, supple ment to Bulletin wells California Well Standards: Water Wells, Monitoring 74- 81, entitled . Copies can be obtained from: Wells, Cathodic Protection Wells Publications/Department of Water Resources P.O. Box 942836 0001 Sacramento, CA 94236- (916) 653- 1097 a Well Standards, Californi tandards for the construction, and s rehabilitation , and destruction of geothermal heat exchange wells (also called ground source heat pumps) in California Laws for Wells ( March 2003 ) can be viewed on DWR ’s w ebsite: http://www.water.ca.gov/groundwater/wells/standards.cfm . Counties and other local government jurisdictions that have been designated local enforcing agencies may have adopted standards in as statewide standards contained in Bulletin 74 -90. addition to the These local agencies should be contacted whenever work on a well is being planned to ensure compliance with local ordinances. Many of these local agencies require permits for any work on a well, and charge a fee for that permit. For information, contact the local agency, which is usually the c ounty Department of E nvironmental Health. Questions about well standards should be directed to the local enforcing agency, to the DWR d istrict offices listed above, or t o DWR ’s Division of Planning and Local Assistance Headquarters at (916) 65 4- 1324 .

193 SECTION V. THE DEPARTMENT OF CO NSUMER AFFAIRS Chapter 11. Laws Governing the Department of Consumer Affairs Chapter 11. Laws Governing the Department of Consumer Affairs The Department of Consumer Affairs includes 40 regulatory ent i- ties —among them the Con tractors State License Board —which reg u- late various services and industries in the state. Some of the other boards and bureaus under the department ’s purview include the Me d- ical Board of California, the Structural Pest Control Board, and the ’s mission, through its Bureau of Auto motive Repair. The department to promote and protect the interests of Califor- regulatory boards, is “ nia consumers by serving as guardian and advocate for their health, ipa- safety, privacy, and economic well being; enhancing public partic tion in regulatory decision -making; promoting legal and ethical standards of professional conduct; identifying marketplace trends so that the Department’ s programs and policies are contemporary, rel e- vant, and responsive; partnering with business and co nsumer groups in California and the nation; and working with law enforcement to combat fraud and enforce consumer protection laws vigorously and fair ly. ” The laws governing the department and the CSLB are part of California’ s Business and Professions Code. What follows are selected sections from the codes that relate, in general or in specifics, to the . purpose and function of the department BUSINESS & PROFESSIONS CODE GENERAL PROVISIONS § 7.5. “Conviction ”; When action by board following establishment of conviction may ction be taken; Prohibition against denial of licensure; Application of se 161

194 162 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 8. Governing provisions § 9. Effect of headings Authority of deputies § 10. § 12.5. a- Violation of regulation adopted pursuant to code provision; Issuance of cit tion § 14.1. Legislative intent 2. “Spouse” to include registered domestic partner § 14. § 22. “Board ” “Director ” § 23.5. § 23.6. ” “Appointing power “License § 23.7. ” “Licentiate ” § 23.8. Licensing eligibility of prison releasees § 23.9. § 26. ulations regarding building standards Rules and reg § 27. Information to be provided on Internet; Entities in Department of Consumer Affairs required to comply § 29.5. Additional qualifications for licensure § 30. Provision of federal employer identification number or social security number by licensee (First of two; Repealed July 1, 2018) Provision of federal employer identification number or social security number § 30. of two; Operative July 1, 2018) by licensee ( Second § 31. Compliance with judgment or order for support upon issuance or renewal of license Provision in rules and regulations for evaluation experience obtained in § 35. armed services i- § 40. State Board of Chiropractic Examiners or Osteopathic Medical Board of Cal fornia expert consultant agreements “ Conviction ”; When action by board following § 7.5. establishment of conviction may be taken; Prohibition against denial of licensure; Application of section A conviction within the meaning of this code means a plea or ve r- ollowing a plea of nolo contendere. Any dict of guilty or a conviction f action which a board is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal or when an ting probation is made suspending the imposition of se n- order gran tence, irrespective of a subsequent order under the provisions of Sec- tion 1203.4 of the Penal Code. However, a board may not deny a li- cense to an applicant who is otherwise qualified pursuant to subdiv i- sion (b) of Section 480. Nothing in this section shall apply to the licensure of persons pu r- suant to Chapter 4 (commencing with Section 6000) of Division 3. Added Stats 1979 ch 876 § 1. § 8. Governing provisions Unless the context otherwise requires, th e general provisions her e- inafter set forth shall govern the construction of this code. Enacted Stats 1937.

195 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 163 § 9. Effect of headings Division, part, chapter, article and section headings contained her e- in shall not be deemed to govern, limit, modify, or in any manner a f- fect the scope, meaning, or intent of the provisions of this code. Enacted Stats 1937. § 10. Authority of deputies Whenever, by the provisions of this code, a power is granted to a public officer or a duty imposed upon such an officer, the power may be exercised or duty performed by a deputy of the officer or by a pe r- son authorized pursuant to law by the officer, unless it is expressly otherwise provided. Stats 1937. Enacted § 12.5. Violation of regulation adopted pursuant to code provision ; Issuance of citation Whenever in any provision of this code authority is granted to issue a citation for a violation of any provision of this code, that authority also includes the authority to issue a citation for the violation of any regulation adopted pursuant to any provision of this code. Added Stats 1986 ch 1379 § 1. § 14.1. Legislative intent The Legislature hereby declares its intent that the terms “ man ” or “men ” where appropriate shall be deemed “ ” or “persons ” and person erms ” or “men ” in sections of this code be any references to the t “man person ” or changed to “ ” when such code sections are being “persons amended for any purpose. This act is declaratory and not amendatory of existing law. Added Stats 1976 ch 1171 § 1. § 14. 2. “Spouse” to incl ude registered domestic partner “Spouse” includes “registered domestic partner,” as required by Se c- tion 297.5 of the Family Code. Added Stats 2016 ch 50 § 1 (SB 1005), effective January 1, 2017. § 22. “ Board ” “Board, ” as used in any provision of this code, refers to the board in which the administration of the provision is vested, and unless ot h- erwise expressly provided, shall include “ bureau, ” “commission, ”

196 164 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS “committee, ” “examining committee, ” “pro- ” “department, ” “division, “agency. ” and ” gram, § 1; Stats 1980 ch 676 § 1; Stats 1991 Enacted Sta ts 1937. Amended Stats 1947 ch 1350 § 1 (SB 1306); Stats 2004 ch 33 § 1 (AB 1467), § 1 (AB 1893); Stats 1999 ch 656 ch 654 1 (AB 2130), effective January 1, 2011. effective April 13, 2004; Stats 2010 ch 670 § “ Director § 23.5. ” ” unless otherwise defined, refers to the Director of Con- “Director, sumer Affairs. Wherever the laws of this state refer to the Director of Professional and Vocational Standards, the reference shall be construed to be to the Director of Consumer Affairs. Added Stats 1939 ch 30 § 2. § 2. Amended Stats 1971 ch 716 § 23.6. “ Appointing power ” “Appointing power, ” unless otherwise defined, refers to the Director of Consumer Affairs. Added Stats 1945 ch 1276 § 1. Amended Stats 1971 ch 716 § 3. “ ” § 23.7. License Unless otherwise expressly provided, “ license ” means license, certi f- icate, registration, or other means to engage in a business or profes- sion regulated by this code or referred to in Section 1000 or 3600. Added Stats 1994 ch 26 § 1 (AB 1807), effective March 30, 1994. § 23.8. “ Licentiate ” “Licentiate ” means any person authorized by a license, certificate, registration, or other means to engage in a business or profession regulated by this code or referred to in Sections 1000 and 3600. Added Stats 1961 ch 2232 § 1. § 23.9. Licensing eligibility of prison releasees Notwithstanding any other provision of this code, any individual who, while imprisoned in a state prison or other correctional instit u- tion, is trained, in the course of a rehabilit ation program approved by the particular licensing agency concerned and provided by the prison or other correctional institution, in a particular skill, occupation, or profession for which a state license, certificate, or other evidence of proficiency is required by this code shall not, when released from the prison or institution, be denied the right to take the next regularly scheduled state examination or any examination thereafter required to obtain the license, certificate, or other evidence of profici ency and

197 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 165 shall not be denied such license, certificate, or other evidence of prof i- ciency, because of his imprisonment or the conviction from which the imprisonment resulted, or because he obtained his training in prison or in the correctional institution, if the licensing agency, upon reco m- u- mendation of the Adult Authority or the Department of the Youth A thority, as the case may be, finds that he is a fit person to be l icensed. § 1, as B & P C § 23.8. Amended and Renumbered by Stats Added Stats 1967 ch 1690 1. 1971 ch 582 § Rules and regulations regarding building sta § 26. ndards Wherever, pursuant to this code, any state department, officer, board, agency, committee, or commission is authorized to adopt rules ich are building and regulations, such rules and regulations wh standards, as defined in Section 18909 of the Health and Safety Code, shall be adopted pursuant to the provisions of Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code u n- less the provisions of Sections 18 930, 18933, 18938, 18940, 18943, 18944, and 18945 of the Health and Safety Code are expressly e x- cepted in the provision of this code under which the authority to adopt the specific building standard is delegated. Any building stan d- ard adopted in violation of this section shall have no force or effect. Any building standard adopted prior to January 1, 1980, pursuant to this code and not expressly excepted by statute from such provisions of the State Building Standards Law shall remain in effect only until January 1, 1985, or until adopted, amended, or superseded by prov i- c- sions published in the State Building Standards Code, whichever o curs sooner. Added Stats 1979 ch 1152 § 1. § 27. Information to be provided on Internet; Entities in Department of Consumer Affairs required to comply (a) Each entity specified in subdivisions (c), (d), and (e) shall pr o- vide on the Internet information regarding the status of every license issued by that entity in accordance with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of T i- tle 1 of the Government Code) and the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code). The public information to be provide d on the Internet shall include information on suspensions and revoc a- tions of licenses issued by the entity and other related enforcement action, including accusations filed pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) taken by the entity relative to persons, businesses, or facilities subject to licensure or

198 166 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS regulation by the entity. The information may not include personal o- information, including home tel ephone number, date of birth, or s ’s address of cial security number. Each entity shall disclose a licensee record. However, each entity shall allow a licensee to provide a post office box number or other alternate address, instead of his or her e- home addre ss, as the address of record. This section shall not pr clude an entity from also requiring a licensee, who has provided a post office box number or other alternative mailing address as his or r res i- her address of record, to provide a physical business address o dence address only for the entity ’s internal administrative use and s address of record or disclosure on not for disclosure as the licensee’ the Internet. (b) In providing information on the Internet, each entity specified in subdivisions (c) and (d) shall comply with the Department of Co n- sumer Affairs ’ guidelines for access to public records. (c) Each of the following entities within the Department of Co n- sumer Affairs shall comply with the requirements of this section: ngineers, Land Surveyors, and G e- (1) The Board for Professional E ologists shall disclose information on its registrants and lice nsees. (2) The Bureau of Automotive Repair shall disclose info rmation on its licensees, including auto repair dealers, smog stations, lamp and brake stations, sm og check technicians, and smog inspection certific a- tion stations. h- (3) The Bureau of Electronic and Appliance Repair, Home Furnis n- ings, and Thermal Insulation shall disclose information on its lice sees and registrants, including major appliance repair dealers, co m- bination dealers (electronic and appliance), electronic repair deal ers, service contract sellers, and service contract administrators. (4) The Cemetery and Funeral Bureau shall disclose info rmation on its licensees, including cemetery brokers, ceme tery salespersons, cemetery managers, crematory managers, cemetery authorities, crematories, cremated remains disposers, embalmers, funeral esta b- lishments, and funeral directors. (5) The Professional Fiduciaries Bureau shall disclose info rmation on its lic ensees. (6) The Contractors rmation ’ State License Board shall disclose info on its licensees and registrants in accordance with Chapter 9 (co m- mencing with Section 7000) of Division 3. In addition to info rmation related to licenses as specified in subdivision (a), the board shall also disclose information provided to the board by the Labor Commissio n- er pursuant to Section 98.9 of the Labor Code. (7) The Bureau for Private Postsecondary Education shall di sclose information on private postsecondary institution s under its jurisdi c- tion, including disclosure of notices to comply issued pursuant to Se c- tion 94935 of the Education Code.

199 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 167 (8) The California Board of Accountancy shall disclose info rmation on its licensees and registrants. (9) The California Architects B oard shall disclose information on its licensees, including architects and landscape architects. (10) The State Athletic Commission shall disclose information on its licensees and registrants. (11) The State Board of Barbering and Cosmetology shall disclos e information on its licensees. (12) The State Board of Guide Dogs for the Blind shall disclose i n- formation on its licensees and registrants. n- (13) The Acupuncture Board shall disclose information on its lice sees. rmation on (14) The Board of Behavioral Sciences shall disclose info its licensees, including licensed marriage and family therapists, li- censed clinical social workers, licensed educational psycholo gists, and licensed professional clinical counselors. (15) The Dental Board of California shall disclose information on its licensees. (16) The State Board of Optometry shall disclose information r e- garding certificates of registration to practice optometry, stat ements of licensure, optometric corporation registrations, branch office l i- censes, and fictitio us name permits of its licensees. (17) The Board of Psychology shall disclose information on its lice n- sees, including psychologists, psychological assistants, and regis tered psychologists. (18) The Veterinary Medical Board shall disclose information on its licensees, registrants, and permitholders. (d) The State Board of Chiropractic Examiners shall disclose info r- mation on its licensees. (e) The Structural Pest Control Board shall disclose information on atives, and oper a- its licensees, including applicators, field represent tors in the areas of fumigation, general pest and wood destroying pests and organisms, and wood roof cleaning and treatment. (f) The Bureau of Medical Cannabis Regulation shall disclose i n- formation on its licensees. (g) “Internet” for the purposes of this section has the meaning set forth in paragraph (6) of subdivision (f) of Section 17538. Added Stats 1997 ch 661 § 1 (SB 492). Amended Stats 1998 ch 59 § 1 (AB 969); Stats 1999 ch 655 § 1 (SB 1889); Stats 2001 ch 159 § 1 (SB 1 (SB 1308); Stats 2000 ch 927 § 662); Stats 2003 ch 849 § 1 (AB 1418); Stats 2009 ch 308 § 1 (SB 819), effective January 1, 2010, ch 310 § 1.5 (AB 48), effective January 1, 2010; Stats 2011 ch 381 § 2 (SB 146), effective January 1, 2012, ch 712 § 1 (SB 706), effective January 1, 2012; Stats 2014 ch 316 1 (AB 266), effective § 1 (SB 1466), effective January 1, 2015; Stats 2015 ch 689 § January 1, 2016; Stats 2016 ch 32 § 1 (SB 837), effective June 27, 2016; Stats 2016 ch 489 § 1 (SB 1478), effective January 1, 2017; Stats 2017 ch 429 § 1 (SB 547), effective January 1, 2018.

200 168 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 29.5. Additional qualifications for licensure In addition to other qualifications for licensure prescribed by the various acts of boards under the department, applicants for licensure and licensees renewing their licenses shall also comply with Section 17520 of the Family Code. § 1 (SB 1161). Amended Stats 2003 ch 607 § 1 (SB 1077). Added Stats 1991 ch 542 —See Family Code Section 17520, Compliance with Support Orders by Applicants for icenses, in Appendix. Professional L § 30. Provision of federal employer identification number or social security number by licensee (First of two; Repealed July 1, 2018) (a) (1) Notwithstanding any other law, any board, as defined in Se c- tion 22, and the State Bar and the Bureau of Real Estate shall, at the time of issuance of the license, require that the applicant provide its federal employer identification number, if the applicant is a partne r- ship, or the applicant’s social security number for all other applicants. (2) No later than January 1, 2016, in accordance with Section 135.5, a board, as defined in Section 22, and the State Bar and the Bureau of Real Estate shall require either the individual taxpayer identific a- tion number or social security number if the appli cant is an individ u- al for purposes of this subdivision. (b) A licensee failing to provide the federal employer identification number, or the individual taxpayer identification number or social Fra n- security number shall be reported by the licensing board to the chise Tax Board. If the licensee fails to provide that information after notification pursuant to paragraph (1) of subdivision (b) of Section 19528 of the Revenue and Taxation Code, the licensee shall be subject to the penalty provided in paragraph (2 ) of subdivision (b) of Section 19528 of the Revenue and Taxation Code. (c) In addition to the penalty specified in subdivision (b), a licensing board shall not process an application for an initial license unless the applicant provides its federal employe r identification number, or in- dividual taxpayer identification number or social security number where requested on the application. (d) A licensing board shall, upon request of the Franchise Tax Board or the Employment Development Department, furnish to th e board or the department, as applicable, the following information with respect to every licensee: (1) Name. (2) Address or addresses of record. (3) Federal employer identification number if the licensee is a par t- nership, or the licensee’s individual taxpayer identification nu mber or social security number for all other licensees.

201 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 169 (4) Type of license. (5) Effective date of license or a renewal. (6) Expiration date of license. (7) Whether license is active or inactive, if known. (8) Whether license is new o r a renewal. (e) For the purposes of this section: (1) “Licensee” means a person or entity, other than a corporation, authorized by a license, certificate, registration, or other means to eferre d engage in a business or profession regulated by this code or r to in Section 1000 or 3600. u- (2) “License” includes a certificate, registration, or any other a thorization needed to engage in a business or profession regulated by this code or referred to in Section 1000 or 3600. (3) “Licensing board” means any board, as defined in Section 22, the State Bar, and the Bureau of Real Estate. t- (f) The reports required under this section shall be filed on magne ic media or in other machine -readable form, according to standards furnished by the Franchise Tax Board or the Emplo yment Develo p- ment Department, as applicable. (g) Licensing boards shall provide to the Franchise Tax Board or the Employment Development Department the information required by this section at a time that the board or the department, as appli- cable, may requ ire. (h) Notwithstanding Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code, a federal employer identification number, individual taxpayer identification number, or ection shall not be social security number furnished pursuant to this s deemed to be a public record and shall not be open to the public for inspection. (i) A deputy, agent, clerk, officer, or employee of a licensing board described in subdivision (a), or any former officer or employee or other individual w ho, in the course of his or her employment or duty, has or has had access to the information required to be furnished under this section, shall not disclose or make known in any manner that info r- mation, except as provided pursuant to this section to the Fr anchise Tax Board, the Employment Development Department, or the Office of the Chancellor of the California Community Colleges, or as provi d- ed in subdivision (k). (j) It is the intent of the Legislature in enacting this section to ut i- lize the federal emplo yer identification number, individual taxpayer identification number, or social security number for the purpose of establishing the identification of persons affected by state tax laws, for purposes of compliance with Section 17520 of the Family Code, and for purposes of measuring employment outcomes of students who participate in career technical education programs offered by the Cal- ifornia Community Colleges and, to that end, the information fu r-

202 170 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS nished pursuant to this section shall be used exclusively for those purposes. (k) If the board utilizes a national examination to issue a license, and if a reciprocity agreement or comity exists between the State of California and the state requesting release of the individual taxpayer identification number or social security number, any deputy, agent, clerk, officer, or employee of any licensing board described in subdiv i- sion (a) may release an individual taxpayer identification number or social security number to an examination or licensing entity, only for the pur pose of verification of licensure or examination status. l ( ) For the purposes of enforcement of Section 17520 of the Family c- Code, and notwithstanding any other law, a board, as defined in Se t the tion 22, and the State Bar and the Bureau of Real Estate shall a time of issuance of the license require that each licensee provide the individual taxpayer identification number or social security number of each individual listed on the license and any person who qualifies subdivision, “licensee” means for the license. For the purposes of this an entity that is issued a license by any board, as defined in Section 22, the State Bar, the Bureau of Real Estate, and the Department of Motor Vehicles. (m) The department shall, upon request by the Office of the Cha n- cellor of the California Community Colleges, furnish to the chance l- lor’s office, as applicable, the following information with respect to every licensee: (1) Name. t- (2) Federal employer identification number if the licensee is a par nership, or the licensee’s individual taxpayer identification nu mber or social security number for all other licensees. (3) Date of birth. (4) Type of license. (5) Effective date of license or a renewal. (6) Expiration date of license. (n) The department shall make available informatio n pursuant to subdivision (m) only to allow the chancellor’s office to measure e m- ployment outcomes of students who participate in career technical education programs offered by the California Community Colleges and recommend how these programs may be impro ved. Licensure i n- formation made available by the department pursuant to this section shall not be used for any other purpose. (o) The department may make available information pursuant to subdivision (m) only to the extent that making the information avai l- able complies with state and federal privacy laws. (p) The department may, by agreement, condition or limit the availability of licensure information pursuant to subdivision (m) in order to ensure the security of the information and to protect the pr i- vacy rights of the individuals to whom the information pertains.

203 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 171 (q) All of the following apply to the licensure information made available pursuant to subdivision (m): m- (1) It shall be limited to only the information necessary to acco plish the purpose authoriz ed in subdivision (n). (2) It shall not be used in a manner that permits third parties to personally identify the individual or individuals to whom the info r- mation pertains. (3) Except as provided in subdivision (n), it shall not be shared with ted to any other party or entity without the consent of the or transmit individual or individuals to whom the information pe rtains. c- (4) It shall be protected by reasonable security procedures and pra tices appropriate to the nature of the information to protect that i n- formation from unauthorized access, destruction, use, modification, or disclosure. (5) It shall be immediately and securely destroyed when no longer needed for the purpose authorized in subdivision (n). (r) The department or the chancellor’s office may sh are licensure i n- formation with a third party who contracts to perform the function described in subdivision (n), if the third party is required by contract to follow the requirements of this section. (s) This section shall remain in effect only until July 1, 2018, and as of that date is repealed. Added Stats 1986 ch 1361 § 1. Amended Stats 1988 ch 1333 § 1, effective September 24, 1988; Stats 1991 ch 542 § 2 (SB 1161), ch 654 § 1.5 (AB 1893); Stats 1994 ch 1135 § 1 (AB 3302); Stats 1997 ch 17 § 1 (SB 947) ( 1 (SB 1106), ch 604 prevails), ch 604 § ctive October 3, 1997, ch 605 § 1.5 (SB 240); Stats effe § 1 (AB 1040); Stats 1999 ch 652 2006 ch 658 § 1 (SB 1476), effective January 1, 2007; Stats 2013 ch 352 § 1 (AB 1317), ctive September 26, 2013, operative July 1, 2013; Stats 2014 ch 752 § 1 (SB 1159), effe ctive January 1, 2015; Stats 2015 ch 389 § 1 (SB 560), effective January 1, 2016; effe Stats 2016 ch 770 § 2 (SB 66), effective January 1, 2017. Stats 2017 ch 828 § § 1, 1.5 (SB 173), effective January 1, 2018, repealed July 1, 2018. § 30. Provision of federal employer identification number or social security number by licensee (Second of two; Operative July 1, 2018) (a) (1) Notwithstanding any other law, any board, as defined in Se c- tion 22, and the State Bar and the Department of Real Estate shall, at the time of issuance of the license, require that the applicant pr o- vide its federal employer identification number, if the applicant is a partnership, or the applicant’s social security number for all other applic ants. (2) No later than January 1, 2016, in accordance with Section 135.5, a board, as defined in Section 22, and the State Bar and the Depar t- ment of Real Estate shall require either the individual taxpayer ide n- tification number or social security number if the applicant is an i n- dividual for purposes of this subdivision.

204 172 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (b) A licensee failing to provide the federal employer identification number, or the individual taxpayer identification number or social n- security number shall be reported by the licensing b oard to the Fra chise Tax Board. If the licensee fails to provide that information after notification pursuant to paragraph (1) of subdivision (b) of Section 19528 of the Revenue and Taxation Code, the licensee shall be subject to the penalty provided in paragraph (2) of subdivision (b) of Section 19528 of the Revenue and Taxation Code. (c) In addition to the penalty specified in subdivision (b), a licensing board shall not process an application for an initial license unless the applicant provides its fede ral employer identification number, or in- dividual taxpayer identification number or social security number where requested on the application. (d) A licensing board shall, upon request of the Franchise Tax Board or the Employment Development Department, fu rnish to the board or the department, as applicable, the following information with respect to every licensee: (1) Name. (2) Address or addresses of record. (3) Federal employer identification number if the licensee is a par t- nership, or the licensee’s indi vidual taxpayer identification nu mber or social security number for all other licensees. (4) Type of license. (5) Effective date of license or a renewal. (6) Expiration date of license. (7) Whether license is active or inactive, if known. (8) Whether licen se is new or a renewal. (e) For the purposes of this section: (1) “Licensee” means a person or entity, other than a corporation, authorized by a license, certificate, registration, or other means to engage in a business or profession regulated by this code or re ferred to in Section 1000 or 3600. (2) “License” includes a certificate, registration, or any other a u- thorization needed to engage in a business or profession regulated by this code or referred to in Section 1000 or 3600. (3) “Licensing board” means any board, as defined in Section 22, the State Bar, and the Department of Real Estate. (f) The reports required under this section shall be filed on magne t- ic media or in other machine -readable form, according to standards furnished by the Franchise Tax Boa rd or the Employment Develop- ment Department, as applicable. (g) Licensing boards shall provide to the Franchise Tax Board or the Employment Development Department the information required by this section at a time that the board or the department, as appli- cable, may require.

205 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 173 (h) Notwithstanding Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code, a federal employer identification number, individual taxpayer identification number, or suant to this section shall not be social security number furnished pur s- open to the public for inspection, is confidential, and shall not be di closed except as required to administer the licensing program, the requirements of this section, or as otherwise required by California b- e or federal court order. This subdivision does not prohi law or a stat it the disclosure of aggregate data that does not reveal personally identifying information. (i) A deputy, agent, clerk, officer, or employee of a licensing board described in subdivision (a), or an y former officer or employee or other individual who, in the course of his or her employment or duty, has or has had access to the information required to be furnished under this r- section, shall not disclose or make known in any manner that info mation, exc ept as provided pursuant to this section to the Franchise Tax Board, the Employment Development Department, or the Office of the Chancellor of the California Community Colleges, or as provi d- ed in subdivision (k). (j) It is the intent of the Legislature in enacting this section to ut i- lize the federal employer identification number, individual taxpayer identification number, or social security number for the purpose of establishing the identification of persons affected by state tax laws, for purposes of compliance with Section 17520 of the Family Code, and for purposes of measuring employment outcomes of students who participate in career technical education programs offered by the Cal- r- ifornia Community Colleges and, to that end, the information fu nished purs uant to this section shall be used exclusively for those purposes. (k) If the board utilizes a national examination to issue a license, and if a reciprocity agreement or comity exists between the State of California and the state requesting release of the individual taxpayer identification number or social security number, any deputy, agent, clerk, officer, or employee of any licensing board described in subdiv i- sion (a) may release an individual taxpayer identification number or social security number to an examination or licensing entity, only for the purpose of verification of licensure or examination status. ( l ) For the purposes of enforcement of Section 17520 of the Family Code, and notwithstanding any other law, a board, as defined in Se c- tion 22, and t he State Bar and the Department of Real Estate shall at the time of issuance of the license require that each licensee provide the individual taxpayer identification number or social security nu m- ber of each individual listed on the license and any person w ho quali- fies for the license. For the purposes of this subdivision, “licensee” means an entity that is issued a license by any board, as defined in

206 174 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Section 22, the State Bar, the Department of Real Estate, and the Department of Motor Vehicles. n- rtment shall, upon request by the Office of the Cha (m) The depa l- cellor of the California Community Colleges, furnish to the chance lor’s office, as applicable, the following information with respect to every licensee: (1) Name. (2) Federal employer identification numb er if the licensee is a par t- nership, or the licensee’s individual taxpayer identification nu mber or social security number for all other licensees. (3) Date of birth. (4) Type of license. (5) Effective date of license or a renewal. (6) Expiration date of l icense. (n) The department shall make available information pursuant to m- subdivision (m) only to allow the chancellor’s office to measure e ployment outcomes of students who participate in career technical education programs offered by the California Commun ity Colleges and recommend how these programs may be improved. Licensure i n- formation made available by the department pursuant to this section shall not be used for any other purpose. (o) The department may make available information pursuant to subdivisio n (m) only to the extent that making the information avai l- able complies with state and federal privacy laws. (p) The department may, by agreement, condition or limit the availability of licensure information pursuant to subdivision (m) in he security of the information and to protect the pr i- order to ensure t vacy rights of the individuals to whom the information pertains. (q) All of the following apply to the licensure information made available pursuant to subdivision (m): e information necessary to acco m- (1) It shall be limited to only th plish the purpose authorized in subdivision (n). (2) It shall not be used in a manner that permits third parties to personally identify the individual or individuals to whom the info r- mation pertains. (3) Except as provided i n subdivision (n), it shall not be shared with or transmitted to any other party or entity without the consent of the individual or individuals to whom the information pe rtains. (4) It shall be protected by reasonable security procedures and pra c- tices appr opriate to the nature of the information to protect that i n- formation from unauthorized access, destruction, use, modification, or disclosure. (5) It shall be immediately and securely destroyed when no longer needed for the purpose authorized in subdivision (n). (r) The department or the chancellor’s office may share licensure i n- formation with a third party who contracts to perform the function

207 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 175 described in subdivision (n), if the third party is required by contract to follow the requirements of this section . (s) This section shall become operative on July 1, 2018. Added Stats 2017 ch 828 § § 2, 2.5 (SB 173), effective January 1, 2018, operative July 1, 2018. § 31. Compliance with judgment or order for support upon issuance or renewal of license (a) As used in this section, “board” means any entity listed in Se c- tion 101, the entities referred to in Sections 1000 and 3600, the State Bar, the Bureau of Real Estate, and any other state agency that i s- on to en- sues a license, certificate, or registration authorizing a pers gage in a business or profession. (b) Each applicant for the issuance or renewal of a license, certif i- cate, registration, or other means to engage in a business or profes- sion regulated by a board who is not in compliance with a jud gment or order fo r support shall be subject to Section 17520 of the Family Code. (c) “Compliance with a judgment or order for support” has the meaning given in paragraph (4) of subdivision (a) of Section 17520 of the Family Code. ppears on a list of the (d) Each licensee or applicant whose name a 500 largest tax delinquencies pursuant to Section 7063 or 19195 of the Revenue and Taxation Code shall be subject to Section 494.5. (e) Each application for a new license or renewal of a license shall indicate on the application that the law allows the State Board of r- Equalization and the Franchise Tax Board to share taxpayer info mation with a board and requires the licensee to pay his or her state tax obligation and that his or her license may be suspended if the state tax obligatio n is not paid. (f) For purposes of this section, “tax obligation” means the tax i m- posed under, or in accordance with, Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), Part 1.6 (commen c- ing with Section 7251), Part 1.7 (commenc ing with Section 7280), Part 10 (commencing with Section 17001), or Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code. Added Stats 1991 ch 110 § 4 (SB 101). Amended Stats 1991 ch 542 § 3 (SB 1161); Stats 2010 ch 328 § 1 (SB 1330), effective January 1, 2011; Stats 2011 ch 455 § 1 (AB 1424), effective January 1, 2012; Stats 2013 ch 352 § 2 (AB 1317), effective September 26, 2013, operative July 1, 2013.

208 176 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 35. Provision in rules and regulations for evaluation experience o btained in armed services It is the policy of this state that, consistent with the provision of high -quality services, persons with skills, knowledge, and experience obtained in the armed services of the United States should be permi t- ning and contribute to the employment needs of ted to apply this lear the state at the maximum level of responsibility and skill for which they are qualified. To this end, rules and regulations of boards pr o- a- vided for in this code shall provide for methods of evaluating educ tion , training, and experience obtained in the armed services, if appl i- cable to the requirements of the business, occupation, or profession regulated. These rules and regulations shall also specify how this e d- ucation, training, and experience may be used to me et the licensure requirements for the particular business, occupation, or profession regulated. Each board shall consult with the Department of Veterans Affairs and the Military Department before adopting these rules and regulations. Each board shall perfo c- rm the duties required by this se tion within existing budgetary resources of the agency within which the board operates. Added Stats 1994 ch 987 § 1 (SB 1646), effective September 28, 1994. Amended Stats 1995 ch 91 § 1 (SB 975); Stats 2010 ch 214 § 1 (AB 2783), effective January 1, 2011. § 40. State Board of Chiropractic Examiners or Osteopathic Medical Board of California expert consultant agreements v- (a) Subject to the standards described in Section 19130 of the Go ection 22, the State Board of ernment Code, any board, as defined in S Chiropractic Examiners, or the Osteopathic Medical Board of Califo r- nia may enter into an agreement with an expert consultant to do any of the following: -related matters, i n- (1) Provide an expert opinion on enforcement cluding providing testimony at an administrative hearing. (2) Assist the board as a subject matter expert in examination d e- velopment, examination validation, or occupational analyses. (3) Evaluate the mental or physical health of a licensee or an appli- cant for a license as may be necessary to protect the public health and safety. (b) An executed contract between a board and an expert consultant shall be exempt from the provisions of Part 2 (commencing with Se c- tion 10100) of Division 2 of the Public Contract Code. (c) Each board shall establish policies and procedures for the sele c- tion and use of expert consultants. (d) Nothing in this section shall be construed to expand the scope of practice of an expert consultant providing services pursuant to this section.

209 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 177 Added Stats 2011 ch 339 § 1 (SB 541), effective September 26, 2011. DIVISION 1 DEPARTMENT OF CONSUMER AFFAIRS Chapter 1 The Department § 100. Establishment Composition of department (First of two; Repealed July 1, 2018) § 101. Composition of department § 101. of two; Operative July 1, 2018 ) (Second . [Section repealed 2011.] § 101.1 . Purpose § 101.6 § 101.7. Meetings of boards; Regular and special Assumption of duties of board created by initiative § 102. . Interagency agreement to delegate duties of cert § 102.3 ain repealed boards; Technical committees for regulation of professions under delegated authority; R enewal of agreement Compensation and reimbursement for expenses § 103. § 105.5 . Tenure of members of boards, etc., within department Removal of boa rd members § 106. . Removal of member of licensing board for disclosure of examination § 106.5 ation inform § 107. Executive officers . Official seals § 107.5 § 108. Status and powers of boards § 108.5 . Witness fees and expenses § 109. Review of decisions; Investig ations § 110. Records and property Commissioners on examination § 111. Publication and sale of directories of authorized persons § 112. Conferences; Traveling expenses § 113. Reinstatement of expired license of licensee serving in military § 114. Waiver of fees and requirements for active duty members of armed forces and § 114.3. national guard Military service; Posting of information on Web site about application of mil § 114.5. i- tary experience and training towards licensure Applicability of Section 114 § 115. § 115. 4. Licensure process expedited for honorably discharged veterans of Armed Forces § 115.5. Board required to expedite licensure process for certain applicants; Adoption of regulations § 118. on, forfeiture, etc., of Effect of withdrawal of application; Effect of suspensi license Misdemeanors pertaining to use of licenses § 119. § 121. Practice during period between renewal and receipt of evidence of renewal § 121.5 . Application of fees to licenses or registrations lawfully inactivated § 122. Fee f or issuance of duplicate certificate § 123. Conduct constituting subversion of licensing examination; Penalties and da mages § 123.5 . Enjoining violations § 124. Manner of notice § 125. Misdemeanor offenses by licensees

210 178 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 125.3 . Direction to licentiate vio lating licensing act to pay costs of investigation and enforcement § 125.5 . Enjoining violations; Restitution orders § 125.6 . Unlawful discrimination by licensees § 125.7 . Restraining orders § 125.8 . Temporary order restraining licensee engaged or about to engage in vi olation of law § 125.9 . System for issuance of citations to licensees; Contents; Fines Submission of reports to Governor § 126. Submission of reports to director § 127. Sale of equipment, supplies, or services for use in violation of li censing § 128. ements requir § 128.5 . Reduction of license fees in event of surplus funds Handling of complaints; Reports to Legislature § 129. § 130. Terms of office of agency members Maximum number of terms § 131. Proration of license fees § 134. Reexami nation of applicants § 135. § 135.5 . Licensure and citizenship or immigration status § 136. Notification of change of address; Punishment for failure to comply § 137. Regulations requiring inclusion of license numbers in advertising, etc. § 138. Notice that pract itioner is licensed; Evaluation of licensing examination y- § 139. Policy for examination development and validation, and occupational anal sis § 140. Disciplinary action; Licensee ’s failure to record cash transactions in pa yment of employee wages § 141. Disc iplinary action by foreign jurisdiction; Grounds for disciplinary action by state licensing board Proof of license as condition of bringing action for collection of compens § 143. ation hibited; Ado Provision in agreements to settle certain causes of action pro p- § 143.5. tion of regulations; Exemptions Requirement of fingerprints for criminal record checks; Applicability § 144. Chapter 2 The Director of Consumer Affairs Designation § 150. § 151. Appointment and tenure; Salary and traveling expenses partmental organization § 152. De § 152.5 . Extension of renewal dates . Establishment of license periods and renewal dates § 152.6 § 153. Investigations § 154. Matters relating to employees of boards § 154.5 . Legal assistance for experts aiding in investigations of l icensees § 155. Employment of investigators; Inspectors as employees or under contract § 156. Contractual authority § 156.1. Retention of records by providers of services related to treatment of alc ohol or mpairment drug i . Leases for examination or meeting purposes § 156.5 § 157. Expenses in criminal prosecutions and unprofessional conduct proceedings § 158. Refunds to applicants § 159. Administration of oaths § 159.5. Division of Investigation; Appointments; Health Quality Investigation Unit § 161. Sale of copies of public records § 162. Evidentiary effect of certificate of records officer as to license, etc. § 163. Fee for certification of records, etc.

211 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 179 § 163.5 . Delinquency fees; Reinstatement fees § 163.6 . [Section repealed 1992.] rity Form and content of license, certificate, permit, or similar indicia of autho § 164. § 165. Prohibition against submission of fiscal impact analysis relating to pending legislation with out prior submission to director for comment Development of guidelines for mandator § 166. y continuing education programs Chapter 3 Funds of the Department § 200.1 . Fund accruals exempt from transfer Levy for administrative expenses § 201. § 202.5 . Itemized statement of services and changes from Department of Justice Professions and Voc (First of two; Operative until July 2, 2018) § 205. ations Fund Professions and Vocations Fund (Second of two; Operative July 1, 2018) § 205. Dishonored check tendered for payment of fine, fee, or penalty § 206. § 210. Contract with vendor of BreEZe system after written notification to certain b- committees of the Legislature; Term; Amount; Submission of report (Su division (b) inoperative December 1, 2018; Subdivision (c) operative term contingent) Chapter 4 Consumer Affairs Article 1 General Provisions and Defi nitions Citation of chapter § 300. Declaration of intent § 301. Definitions § 302. Division of Consumer Services; Chief [Repealed] § 303. Article 2 Director and Employees Administration of chapter § 305. § 306. Employment matters § 307. Experts and consu ltants Article 3 Powers and Duties Director ’s powers and duties § 310. § 311. Interdepartmental committee § 312. Report to Governor and Legislature § 313.2 . Adoption of regulations in conformance with Americans with Disabilities Act § 313.5 . Publication of consumer information bibliography Article 3.6 Uniform Standards Regarding Substance -Abusing Healing Arts Licensees § 315.2. Cease practice order

212 180 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 315.4. Cease practice order for violation of probation or diversion program Article 4 Representation of Consumers § 320. Intervention in administrative or judicial proceedings Commencement of legal proceedings § 321. Article 5 Consumer Complaints § 325. Actionable complaints . Consumer complaints on paging services § 325.3 § 326. complaint Proceedings on receipt of Article 7 Personal Information and Privacy Protection § 350. [Section repealed 2008.] [Section repealed 2008.] § 352. Chapter 6 Public Members § 450. Qualifications generally § 450.3 . Conflicting pecuniary interests § 450.4 . [Section repealed 2003.] § 450.5 . Prior industrial and professional pursuits . Age § 450.6 Delegation of duties § 451. “Board ” § 452. Chapter 7 Licensee § 460. Powers of local governmental entities § 461. Asking applicant to reveal arrest record prohibited § 462. Inactive category of licensure § 464 . Retired category of licensure Chapter 8 Dispute Resolution Programs Article 1 Legislative Purpose § 465.5 . Legislative intent Article 3 Establishment and Administration of Programs § 467. Dispute Resolution Advisory Counci l § 467.1 . Contract requirements; County programs

213 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 181 § 467.2 . Eligibility for program funding . Provision of written statement to parties; Contents § 467.3 . Agreements resolving disputes; Enforcement; Admissibility in evidence; § 467.4 tations Tol ling statute of limi § 467.5 . Communications during mediation proceedings § 467.6 . Statistical records; Anonymity of parties § 467.7 . Withdrawal from dispute resolution; Criminal complaints; Waiver of right to counsel Article 4 Application Procedures § 468.1 . Select ion of programs . Applications; Required information § 468.2 § 468.3 . Funding priorities; Criteria Article 6 Funding § 470.1 . Acceptance of funds by grant recipients § 470.2 . County ’s share of funding § 470.3 . [Section repealed 2006.] § 470.5. Monthly dis tributions from filing fees for support of dispute resolution programs Carry over of moneys and fees § 470.6. Article 7 Rules and Regulations . Statewide uniformity with guidelines contained in rules and regulations § 471.3 § 471.5 tatistical data . Annual provision of s Chapter 1 The Department § 100. Establishment There is in the state government, in the Business, Consumer Se r- vices, and Housing Agency, a Department of Consumer Affairs. Enacted Stats 1937. Amended Stats 1969 ch 138 § 5; Stats 1971 ch 716 § 4; Stats 1984 1. See this section as modified in Governor's Reorganization Plan No. 2 § 1 of ch 144 § 2012. Amended Stats 2012 ch 147 § 1 (SB 1039), effective January 1, 2013, operative July 1, 2013 (ch 147 prevails). § 101. nt (First of two; Repealed Composition of departme July 1, 2018) The department is comprised of the following: (a) The Dental Board of California. (b) The Medical Board of California.

214 182 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (c) The State Board of Optometry. (d) The California State Board of Pharmacy. (e) The Veterinary Medical Board. (f) The California Board of Accountancy. (g) The California Architects Board. (h) The Bureau of Barbering and Cosmetology. (i) The Board for Professional Engineers, Land Surveyors, and G e- ologists. (j) The Contractors’ State License Board. (k) The Bureau for Private Postsecondary Education. ( l h- ) The Bureau of Electronic and Appliance Repair, Home Furnis ings, and Thermal Insulation. (m) The Board of Registered Nursing. (n) The Board of Behavioral Sciences. (o) The State Athletic Commission. (p) The Cemetery and Funeral Bureau. (q) The State Board of Guide Dogs for the Blind. (r) The Bureau of Security and Investigative Services. (s) The Court Reporters Board of California. (t) The Board of Vocational Nursing and Psychiatric Techn icians. (u) Th e Landscape Architects Technical Committee. (v) The Division of Investigation. (w) The Bureau of Automotive Repair. (x) The Respiratory Care Board of California. (y) The Acupuncture Board. (z) The Board of Psychology. (aa) The California Board of Podiatric Medicine. (ab) The Physical Therapy Board of California. (ac) The Arbitration Review Program. (ad) The Physician Assistant Committee. -Language Pathology and Audiology and Hearing (ae) The Speech Aid Dispensers Board. nal Therapy. (af) The California Board of Occupatio (ag) The Osteopathic Medical Board of California. (ah) The Naturopathic Medicine Committee. (ai) The Dental Hygiene Committee of California. (aj) The Professional Fiduciaries Bureau. (ak) The State Board of Chiropractic Examiners. (a l ) The Bu reau of Real Estate. (am) The Bureau of Real Estate Appraisers. (an) The Structural Pest Control Board. (ao) The Bureau of Medical Cannabis Regulation. (ap) Any other boards, offices, or officers subject to its jurisdiction by law. (aq) This section shall remain in effect only until July 1, 2018, and as of that date is repealed.

215 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 183 Enacted Stats 1937. Amended Stats 1939 ch 651 § 1; Stats 1947 ch 1350 § 2; Stats 1953 1; Stats 1961 ch 1095 § 1, ch 1323 § 1; Stats 1955 ch 965 § ch 966 1; Stats 1968 ch 444 § § 1; Stats 1969 ch 1249 § 5; Stats 1971 ch 716 § 5, ch 1578 § 1, ch 1593 § 23.1, operative § 2; Stats 1973 ch 122 § 2.2, effective June July 1, 1973; Stats 1972 ch 749 § 1, ch 1396 § 1; Stats 1977 ch 141 1; Stats 1974 ch 546 ne 29, 29, 1973, ch 863 § § 1, effective Ju § 1; Stats 1987 ch 925 § § 1; Stats 1985 ch 1230 1977; Stats 1983 ch 150 1, effective September 22, 1987; Stats 1989 ch 886 § 1; Stats 1990 ch 1256 § 1 (AB 2649); Stats 1 (AB 1332), ch 654 § 2 (AB 1893); Stats 1993 ch 1263 § 1991 ch 359 § ; Stats 1 (AB 936) 1994 ch 26 § 1 (SB 2039), ch 1275 § 1 3 (AB 1807), effective March 30, 1994, ch 1274 § § 1 (SB 42), effective July 6, 1995; Stats 1997 ch 758 (SB 2101); Stats 1995 ch 60 § 1 (SB 1346), ch 759 § 1.5 (SB 827); Stats 1998 ch 59 § 2 (AB 969); Stats 1999 ch 655 § 1.1 (SB 1308); Stats 2000 ch 697 § 1 (SB 1046); Stats 2001 ch 615 § 1 (SB 26), effective 1.5 (AB 1409); Stats 2003 ch 485 § 1 (SB 907); Stats 2008 ch October 9, 2001, ch 687 § 31 § 1 (SB 853), effective January 1, 2009; Stats 2009– ss ch 18 § 1 (AB 2010 4th Ex Se § 2 (SB 819), effective January 20XXXX), effective October 23, 2009; Stats 2009 ch 308 § 1 (AB 1535), effective January 1, 2010, ch 310 § 2.7 (AB 48), effective 1, 2010, ch 309 January 1, 2010. See this section as modified in Governor ’s Re organization Plan No. 2 § 2 of 2012; Amended Stats 2013 ch 352 § 3 (AB 1317), effective September 26, 2013, operative July 1, 2013; Stats 2015 ch 689 § 2 (AB 266), effective January 1, 2016; Stats 2 (SB 837), effective June 27, 2016. Stats 2017 ch 828 § 3 (SB 173), effe 2016 ch 32 § c- tive January 1, 2018, repealed July 1, 2018, by its own terms. § 101. (Second of two; Operative Composition of department July 1, 2018) The department is comprised of the following: (a) The Dental Board of California. (b) The Medical Board of California. (c) The State Board of Optometry. (d) The California State Board of Pharmacy. (e) The Veterinary Medical Board. (f) The California Board of Accountancy. (g) The California Architects Board. (h) The Bureau of Barbering and Cosme tology. (i) The Board for Professional Engineers, Land Surveyors, and G e- ologists. (j) The Contractors’ State License Board. (k) The Bureau for Private Postsecondary Education. l ( ) The Bureau of Electronic and Appliance Repair, Home Furnis h- ings, and Therma l Insulation. (m) The Board of Registered Nursing. (n) The Board of Behavioral Sciences. (o) The State Athletic Commission. (p) The Cemetery and Funeral Bureau. (q) The State Board of Guide Dogs for the Blind. (r) The Bureau of Security and Investigative S ervices. (s) The Court Reporters Board of California. (t) The Board of Vocational Nursing and Psychiatric Techn icians. (u) The Landscape Architects Technical Committee.

216 184 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (v) The Division of Investigation. (w) The Bureau of Automotive Repair. (x) The Respira tory Care Board of California. (y) The Acupuncture Board. (z) The Board of Psychology. (aa) The California Board of Podiatric Medicine. (ab) The Physical Therapy Board of California. (ac) The Arbitration Review Program. (ad) The Physician Assistant Committ ee. -Language Pathology and Audiology and Hearing (ae) The Speech Aid Dispensers Board. (af) The California Board of Occupational Therapy. (ag) The Osteopathic Medical Board of California. (ah) The Naturopathic Medicine Committee. (ai) The Dental Hygiene Co mmittee of California. (aj) The Professional Fiduciaries Bureau. (ak) The State Board of Chiropractic Examiners. (a l ) The Bureau of Real Estate Appraisers. (am) The Structural Pest Control Board. (an) The Bureau of Medical Cannabis Regulation. (ao) Any ot her boards, offices, or officers subject to its jurisdiction by law. (ap) This section shall become operative on July 1, 2018. Added Stats 2017 ch 823 § 4 (SB 173), effective January 1, 2018, operative July 1, 2018. [Section repealed 2011.] § 101.1. d Stats 1994 ch 908 § 2 (SB 2036). Amended Stats 1999 ch 983 § 1 (SB 1307). R e- Adde pealed Stats 2010 ch 670 § 2 (AB 2130), effective January 1, 2011. The repealed section related to legislative intent regarding existing and proposed consumer -related boards. § 101.6. Purpose The boards, bureaus, and commissions in the department are esta b- lished for the purpose of ensuring that those private businesses and professions deemed to engage in activities which have potential i m- pact upon the public health, safety, and welfare are adequately reg u- lated in order to protect the people of California. To this end, they establish minimum qualifications and levels of competency and license persons desiring to engage in the occup a- tions they regulate upon determining that such pe rsons possess the requisite skills and qualifications necessary to provide safe and e f- fective services to the public, or register or otherwise certify persons in order to identify practitioners and ensure performance according to set and accepted professional standards. They provide a means for redress of grievances by investigating allegations of unprofe s-

217 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 185 sional conduct, in competence, fraudulent action, or unlawful activity brought to their attention by members of the public and institute n against persons licensed or registered under the disciplinary actio provisions of this code when such action is warranted. In addition, they conduct per iodic checks of licensees, registrants, or otherwise certified persons in order to ensure compliance with the relevant sections of this code. Added Stats 1980 ch 375 § 1. Meetings of boards; Regular and special § 101.7. (a) Notwithstanding any other provision of law, boards shall meet at least three times each calendar year. Boards shall meet at least once each calendar ye n- ar in northern California and once each cale dar year in southern California in order to facilitate participation by the public and its licensees. The director at his or her discretion may exempt any board from (b) showing of good cause that the requirement in subdivision (a) upon a the board is not able to meet at least three times in a ca lendar year. (c) The director may call for a special meeting of the board when a board is not fulfilling its duties. Added Stats 2007 ch 354 § 1 (SB 1047), effective Janu ary 1, 2008. Assumption of duties of board created by initi § 102. ative Upon the request of any board regulating, licensing, or controlling any professional or vocational occupation created by an initiative act, the Director of Consumer Affairs may take over the duties of the board under the same conditions and in the same manner as provided in this code for other boards of like character. Such boards shall pay a proportionate cost of the administration of the department on the same basis as is charged ot her boards included within the depar t- ment. Upon request from any such board which has adopted the pr o- visions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code as rules of procedure in proceedings before it, the director shall assign hearing officers for such proceedings in accordance with Section 110.5. Enacted Stats 1937. Amended Stats 1945 ch 869 § 1; Stats 1971 ch 716 § 6. § 102.3. Interagency agreement to delegate duties of cer tain repealed boards; Technical committees for regulation of professions under delegated authority; Renewal of agree ment (a) The director may enter into an interagency agreement with an appropriate entity within the Department of Consumer Affairs as provided for in Section 101 to delegate the duties, powers, purposes,

218 186 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS responsibilities, and jurisdiction that have been succeeded and vested with the department, of a board, as defined in Section 477, which b e- came inoperative and was repealed in accordance with Chapter 908 of tutes of 1994. the Sta (b)(1) Where, pursuant to subdivision (a), an interagency agreement is entered into between the director and that entity, the entity recei v- ing the delegation of authority may establish a technical committee to tity, the profession subject to the a u- regulate, as directed by the en thority that has been delegated. The entity may delegate to the tec h- nical committee only those powers that it received pursuant to the interagency agreement with the director. The technical committee shall have only th ose powers that have been delegated to it by the entity. e- (2) Where the entity delegates its authority to adopt, amend, or r peal regulations to the technical committee, all regulations adopted, amended, or repealed by the technical committee shall be subje ct to the review and approval of the entity. r- (3) The entity shall not delegate to a technical committee its autho ity to discipline a licentiate who has violated the provisions of the ap- plicable chapter of the Business and Professions Code that is subject to the director ’s delegation of authority to the entity. (c) An interagency agreement entered into, pursuant to subdivision (a), shall continue until such time as the licensing program admini s- oint tered by the technical committee has undergone a review by the J Committee on Boards, Commissions, and Consumer Protection to evaluate and determine whether the licensing program has demo n- strated a public need for its continued existence. Thereafter, at the director’ s discretion, the interagency agreement may be renewed. Added Stats 1997 ch 475 2 (AB 1467), effe c- § 1 (AB 1546). Amended Stats 2004 ch 33 § tive April 13, 2004. § 103. Compensation and reimbursement for expenses Each member of a board, commission, or committee created in the various chapters of Divisio n 2 (commencing with Section 500) and Division 3 (commencing with Section 5000), and in Chapter 2 (co m- mencing with Section 18600) and Chapter 3 (commencing with Se c- tion 19000) of Division 8, shall receive the moneys specified in this section when authorize d by the respective provisions. Each such member shall receive a per diem of one hundred dollars ($100) for each day actually spent in the discharge of official duties, and shall be reimbursed for traveling and other expenses necessarily incurred in the pe rformance of official duties. The payments in each instance shall be made only from the fund from which the expenses of the agency are paid and shall be subject to the availability of money.

219 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 187 Notwithstanding any other provision of law, no public officer or e m- ployee shall receive per diem salary compensation for serving on those boards, commissions, committees, or the Consumer Advisory Council on any day when the officer or employee also received com- pensation for his or her regular public employment. ats 1959 ch 1645 § 1. Amended Stats 1978 ch 1141 § 1; Stats 1985 ch 502 § 1; Added St § 1; Stats 1993 ch 1264 § 1 (SB 574). Stats 1987 ch 850 § 105.5. Tenure of members of boards, etc., within department er of a Notwithstanding any other provision of this code, each memb board, commission, examining committee, or other similarly const i- tuted agency within the department shall hold office until the a p- pointment and qualification of his successor or until one year shall which he was a p- have elapsed since the expiration of the term for pointed, whichever first occurs. Added Stats 1967 ch 524 § 1. § 106. Removal of board members The Governor has power to remove from office at any time, any member of any board appointed by him for continued neglect of duties a- required by law, or for incompetence, or unprofessional or dishonor ation ble conduct. Nothing in this section shall be construed as a limit or restriction on the power of the Governor, conferred on him by any other provision of law, to remove any member of any board. Stats 1937. Amended Stats 1945 ch 1276 Enacted § 3. § 106.5. Removal of member of licensing board for di sclosure of examination information Notwithstanding any other provision of law, the Governor may r e- move from office a member of a board or other licens ing entity in the department if it is shown that such member has knowledge of the ’s next examin a- specific questions to be asked on the licensing entity tion and directly or indirectly discloses any such question or que s- tions in advance of or during the exam ination to any applicant for that examination. The proceedings for removal shall be conducted in accordance with the provisions of Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code, and the Governor shall have all the powers gran t- ed there in. Added Stats 1977 ch 482 § 1.

220 188 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 107. Executive officers r- Pursuant to subdivision (e) of Section 4 of Article VII of the Califo nia Constitution, each board may appoint a person exempt from civil e- service and may fix his or her salary, with the approval of the D partment of Human Resources pursuant to Section 19825 of the Go v- ernment Code, who shall be designated as an executive officer unless the licensing act of the particular board designates the person as a registrar. Enacted Stats 1937. Amended Stats 1984 ch 47 § 2, effective March 21, 1984; Stats 2. See this section as modified in Governor's Reorganization Plan No. 1 1987 ch 850 § 1 (SB 1308), effective January 1, 2013. § 1 of 2011. Amended Stats 2012 ch 665 § Official seals § 107.5. If any board in the department uses an official seal pursuant to any State of Cal i- provision of this code, the seal shall contain the words “ ” and “Department of Consumer Affairs ” in addition to the title fornia of the board, and shall be in a form approved by the director . Added Stats 1967 ch 1272 § 1. Amended Stats 1971 ch 716 § 7. § 108. Status and powers of boards Each of the boards comprising the department exists as a separate unit, and has the functions of setting standards, holding meetings, eof, preparing and conducting examinations, and setting dates ther passing upon applicants, conducting investigations of violations of laws under its jurisdiction, issuing citations and holding hearings for the revocation of licenses, and the imposing of penalties following thos e hearings, insofar as these powers are given by statute to each respective board. Enacted Stats 1937. Amended Stats 2008 ch 179 § 1 (SB 1498), effective January 1, 2009. § 108.5. Witness fees and expenses In any investigation, proceeding or hearing whic m- h any board, co mission or officer in the department is empowered to institute, co n- duct, or hold, any witness appearing at such investigation, proceeding or hearing whether upon a subpoena or voluntarily, may be paid the sum of twelve dollars ($12) per day for every day in actual attendance at such investigation, proceeding or hearing and for his actual, nece s- sary and reasonable expenses and such sums shall be a legal charge against the funds of the respective board, commission or officer; pr o- vided further, that no witness appearing other than at the instance of the board, commission or officer may be compensated out of such fund.

221 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 189 The board, commission or officer will determine the sums due any such witness and enter the amount on its minutes. § 1. Amended Stats 1957 ch 1908 § 1. 43 ch 1035 Added Stats 19 § 6; Stats 1970 ch 1061 § 109. Review of decisions; Investigations (a) The decisions of any of the boards comprising the department with respect to setting standards, conducting examinations, passing candid ates, and revoking licenses, are not subject to review by the d i- rector, but are final within the limits provided by this code which are ction. applicable to the particular board, except as provided in this se (b) The director may initiate an investigation o f any allegations of x- misconduct in the preparation, administration, or scoring of an e l- amination which is administered by a board, or in the review of qua ifications which are a part of the licensing process of any board. A request for investigation shall be made by the director to the Div i- sion of Investigation through the chief of the division or to any law ement agency in the jurisdiction where the alleged misconduct enforc occurred. (c) The director may intervene in any matter of any board where an invest igation by the Division of Investigation discloses probable cause to believe that the conduct or activity of a board, or its members or employees constitutes a violation of criminal law. intervene, The term “ ” as used in paragraph (c) of this section may include, but is not limited to, an application for a restraining order or injunctive relief as specified in Section 123.5, or a referral or request for criminal prosecution. For purposes of this section, the director shall be deemed to have standing under Se ction 123.5 and shall seek representation of the Attorney General, or other appropriate counsel in the event of a conflict in pursuing that action. Enacted Stats 1937. Amended Stats 1991 ch 1013 § 1 (SB 961). § 110. Records and property The department sh all have possession and control of all records, books, papers, offices, equipment, supplies, funds, appropriations, —real or personal —now or hereafter held for land and other property the benefit or use of all of the bodies, offices or officers comprising t he department. The title to all property held by any of these bodies, of- fices or officers for the use and benefit of the state, is vested in the State of California to be held in the possession of the department. E x- cept as authorized by a board, the depart ment shall not have the po s- session and control of examination questions prior to submission to applicants at scheduled examinations. Enacted Stats 1937. Amended Stats 1996 ch 829 § 1 (AB 3473).

222 190 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 111. Commissioners on examination p- ly provided, any board may, with the a Unless otherwise express proval of the appointing power, appoint qualified persons, who shall be designated as commissioners on examination, to give the whole or any portion of any examination. A commissioner on examination need a- not be a memb er of the board but he shall have the same qualific tions as one and shall be subject to the same rules. § 3; Stats 1978 ch 1161 § 1. Added Stats 1937 ch 474. Amended Stats 1947 ch 1350 Publication and sale of directories of authorized § 112. persons withstanding any other provision of this code, no agency in the Not department, with the exception of the Board for Professional Eng ineers h- and Land Surveyors, shall be required to compile, publish, sell, or ot s it nece ssary to erwise distribute a directory. When an agency deem compile and publish a directory, the agency shall cooperate with the director in determining its form and content, the time and frequency of its publication, the persons to whom it is to be sold or otherwise di s- tributed, and its price if it is sold. Any agency that requires the a p- proval of the director for the compilation, publication, or distribution of a d irectory, under the law in effect at the time the amendment made to s this section at the 1970 Regular Session of the Legislature become c- effective, shall continue to require that approval. As used in this se “directory ” means a directory, roster, register, or similar compil a- tion, tion of the names of persons who hold a license, certificate, permit, re g- istration, or similar indicia of auth ority from the agency. Added Stats 1937 ch 474. Amended Stats 1968 ch 1345 § 1; Stats 1970 ch 475 § 1; Stats 1998 ch 59 § 3 (AB 969). § 113. Conferences; Traveling expenses Upon recommendation of the director, officers, and employees of the department, a nd the officers, members, and employees of the boards, committees, and commissions comprising it or subject to its jurisdi c- tion may confer, in this state or elsewhere, with officers or employees of this state, its political subdivisions, other states, or t he United States, or with other persons, associations, or organizations as may be of assistance to the department, board, committee, or commission in the conduct of its work. The officers, members, and employees shall be entitled to their actual traveling expenses incurred in pursuance hereof, but when these expenses are incurred with respect to travel outside of the state, they shall be subject to the approval of the Gov- ernor and the Director of Finance.

223 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 191 Added Stats 1937 ch 474. Amended Stats 1941 ch 885 § 1; Stats 2000 ch 277 § 1 (AB 2 (SB 662). 2697); Stats 2001 ch 159 § Reinstatement of expired license of licensee serving in § 114. military (a) Notwithstanding any other provision of this code, any licensee or registrant of any board, commission, or bur eau within the depar t- ment whose license expired while the licensee or registrant was on active duty as a member of the California National Guard or the United States Armed Forces, may, upon application, reinstate his or her license or registration without examination or penalty, provided that all of the following requirements are satisfied: (1) His or her license or registration was valid at the time he or she entered the California National Guard or the United States Armed Forces. The application for r einstatement is made while serving in the (2) California National Guard or the United States Armed Forces, or not later than one year from the date of discharge from active service or return to inactive military status. (3) The application for reinstatement is accompanied by an affidavit showing the date of entrance into the service, whether still in the se r- vice, or date of discharge, and the renewal fee for the current renewal period in which the application is filed is paid. (b) If application for reinstateme nt is filed more than one year after discharge or return to inactive status, the applicant, in the discretion of the licensing agency, may be required to pass an examination. (c) If application for reinstatement is filed and the licensing agency determines that the applicant has not actively engaged in the practice of his or her profession while on active duty, then the licensing age n- cy may require the applicant to pass an examination. (d) Unless otherwise specifically provided in this code, any licensee or registrant who, either part time or full time, practices in this state the profession or vocation for which he or she is licensed or registered shall be required to maintain his or her license in good standing even though he or she is in military service. For the purposes in this section, time spent by a licensee in recei v- ing treatment or hospitalization in any veterans’ facility during which he or she is prevented from practicing his or her profession or voc a- tion shall be excluded from said period of one year. Added Stats 1951 ch 185 § 2. Amended Stats 1953 ch 423 § 1; Stats 1961 ch 1253 § 1; Stats 2010 ch 389 § 1 (AB 2500), effective January 1, 2011; Stats 2011 ch 296 § 1 (AB 1023), effective January 1, 2012.

224 192 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 114.3. Waiver of fees and requirements for active duty members of armed forces and national guard (a) Notwithstanding any other provision of law, every board, as de- enewal fined in Section 22, within the department shall waive the r fees, continuing education requirements, and other renewal requir e- ments as determined by the board, if any are applicable, for any li- censee or registrant called to active duty as a member of the United States Armed Forces or the California National Guard if all of the following requirements are met: (1) The licensee or registrant possessed a current and valid l icense uty. with the board at the time he or she was called to active d (2) The renewal requirements are waived only for the p eriod during rvice. which the licensee or registrant is on active duty se (3) Written docume ntation that substantiates the licensee or regi s- trant's active duty service is provided to the board. s- (b) (1) Except as specified in paragraph (2), the licensee or regi trant shall not engage in any activities requiring a license during the period that the waivers provided by this section are in effect. (2) If the licensee or registrant will provide services for which he or she is licensed while on active duty, the board shall convert the l i- cense status to military active and no private practice of any type shall be permitted. i- (c) In order to engage in any activities for which he or she is l censed once discharged from active duty, the licensee or registrant shall meet all necessary renewal requirements as determined by the board within six months from the l icensee's or registrant's date of di s- charge from active duty service. (d) After a licensee or registrant receives notice of his or her di s- charge date, the licensee or registrant shall notify the board of his or her discharge from active duty within 60 days of receiving his or her notice of discharge. (e) A board may adopt regulations to carry out the provisions of this section. (f) This section shall not apply to any board that has a similar l i- cense renewal waiver process statutorily authorized for that boa rd. Added Stats 2012 ch 742 § 1 (AB 1588), effective January 1, 2013. § 114.5. Military service; Posting of information on Web site about application of military experience and training towards licensure (a) Each board shall inquire in every application for licensure if the individual applying for licensure is serving in, or has previously served in, the military.

225 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 193 (b) If a board’s governing law authorizes veterans to apply military experience and training towards licensure requirements, that board l- shall p ost information on the board’s Internet Web site about the abi ity of veteran applicants to apply military experience and training towards licensure requirements. Added Stats 2013 ch 693 § 1 (AB 1057), effective January 1, 2014. Amended Stats 2016 ch 174 § 1 (SB 1348), effective January 1, 2017. § 115. Applicability of Section 114 The provisions of Section 114 of this code are also applicable to a li- censee or registrant whose license or registration was obtained while in the armed services. 51 ch 1577 Added Stats 19 § 1. § 115.4 . Licensure process expedited for honorably discharged veterans of Armed Forces (a) Notwithstanding any other law, on and after July 1, 2016, a i- board within the department shall expedite, and may assist, the in tial licensure proce ss for an applicant who supplies satisfactory ev i- dence to the board that the applicant has served as an active duty member of the Armed Forces of the United States and was honorably discharged. (b) A board may adopt regulations necessary to administer this sec- tion. § 1 (SB 1226), effective January 1, 2015. Added Stats 2014 ch 657 § 115.5. Board required to expedite licensure process for certain applicants; Adoption of regulations o- (a) A board within the department shall expedite the licensure pr cess for a n applicant who meets both of the following requir ements: (1) Supplies evidence satisfactory to the board that the appl icant is married to, or in a domestic partnership or other legal union with, an active duty member of the Armed Forces of the United Stat es who is assigned to a duty station in this state under official active duty mil i- tary orders. (2) Holds a current license in another state, district, or terr itory of the United States in the profession or vocation for which he or she seeks a license from the board. (b) A board may adopt regulations necessary to administer this se c- tion. Added Stats 2012 ch 399 § 1 (AB 1904), effective January 1, 2013.

226 194 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 118. Effect of withdrawal of application; Effect of suspension, forfeiture, etc., of license thdrawal of an application for a license after it has been (a) The wi filed with a board in the department shall not, unless the board has consented in writing to such withdrawal, deprive the board of its a u- thority to institute or continue a proceeding against the applicant for the denial of the license upon any ground provided by law or to enter an order denying the license upon any such ground. (b) The suspension, expiration, or forfeiture by operation of law of a suspension, forfe i- license issued by a board in the department, or its ture, or cancellation by order of the board or by order of a court of law, or its surrender without the written consent of the board, shall not, during any period in which it may be renewed, restored, reissued, or reinstated, deprive the n- board of its authority to institute or conti ue a disciplinary proceeding against the licensee upon any ground provided by law or to enter an order suspending or revoking the l i- cense or otherwise taking disciplinary action against the licensee on any such ground. (c) As used in this section, “board ” includes an individual who is au- thorized by any provision of this code to issue, suspend, or revoke a l i- cense, and “ license ” includes “certificate, ” “registration, ” and “permit. ” Added Stats 1961 ch 1079 § 1. Misdemeanors pertaining to use of licenses § 119. Any person who does any of the following is guilty of a misdemea n- or: (a) Displays or causes or permits to be displayed or has in his or her possession either of the following: (1) A canceled, revoked, suspe nded, or fraudulently altered l icense. (2) A fictitious license or any document simulating a license or pu r- porting to be or have been issued as a license. (b) Lends his or her license to any other person or knowingly pe r- mits the use thereof by another. (c) Displays or represents any license not issued to him or her as b e- ing his or her license. (d) Fails or refuses to surrender to the issuing authority upon its lawful written demand any license, registration, permit, or certificate which has been suspended, revoked, or canceled. (e) Knowingly permits any unlawful use of a license issued to him or her. (f) Photographs, photostats, duplicates, manufactures, or in any way reproduces any license or facsimile thereof in a manner that it could be mistaken for a valid license, or displays or has in his or her

227 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 195 possession any such photograph, photostat, duplicate, reproduction, or facsimile unless authorized by this code. (g) Buys or receives a fraudulent, forged, or counterfeited license forged, or counterfeited. For purposes knowing that it is fraudulent, fraudulent ” means containing any misreprese n- of this subdivision, “ tation of fact. ” includes “certificate, ” “permit, ” license As used in this section, “ ” and “registration ” or any other indicia giving autho riz a- “authority, tion to engage in a business or profession regulated by this code or referred to in Section 1000 or 3600. § 1. Amended Stats 1990 ch 350 e- Added Stats 1965 ch 1083 § 1 (SB 2084) (ch 1207 pr vails), ch 1207 § 1 (AB 3242); Stats 1994 ch 1206 § 1 (SB 1775); Stats 2000 ch 568 § 1 (AB 2888). Practice during period between renewal and r eceipt of § 121. evidence of renewal No licensee who has complied with the provisions of this code rela t- ing to the renewal of his or her license prior to expiration of such l i- cense shall be deemed to be engaged illegally in the practice of his or her business or profession during any period between such renewal and receipt of evidence of such renewal which may occur due to delay not the fault of the applicant. ction, “license ” includes “certificate, ” “permit, ” As used in this se ” and “registration, “authorization, r- ” or any other indicia giving autho ization, by any agency, board, bureau, commission, committee, or e n- tity within the Department of Consumer Affairs, to engage in a bus i- ness or profession regulated by this code or by the board referred to in the Chiropractic Act or the Osteopathic Act. Added Stats 1979 ch 77 § 1. § 121.5. Application of fees to licenses or registrations lawfully inactivated Except as otherwise provided in this code, the application of deli n- quency fees or accrued and unpaid renewal fees for the renewal of expired licenses or registrations shall not apply to licenses or regi s- trations that have lawfully been designated as inactive or retired. Added Stats 20 01 ch 435 § 1 (SB 349). § 122. Fee for issuance of duplicate certificate Except as otherwise provided by law, the department and each of the boards, bureaus, committees, and commissions within the d e- partment may charge a fee for the processing and issuan ce of a dupl i- cate copy of any certificate of licensure or other form evidencing lice n-

228 196 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS sure or renewal of licensure. The fee shall be in an amount sufficient to cover all costs incident to the issuance of the duplicate certificate or -five dollars ($25). other form but shall not exceed twenty Added Stats 1986 ch 951 § 1. § 123. Conduct constituting subversion of licensing examination; Penalties and damages It is a misdemeanor for any person to engage in any conduct which subverts or attempts to subvert any l icensing examination or the ad- ministration of an examination, including, but not limited to: i- (a) Conduct which violates the security of the examination mater erials als; removing from the examination room any examination mat horized reproduction by any means without authorization; the unaut of any portion of the actual licensing examination; aiding by any means the unauthorized reproduction of any portion of the actual l i- censing examination; paying or using professional or paid examin a- -takers for the purpose of reconstructing any portion of the licen tion s- ing examination; obtaining examination questions or other examin a- tion material, except by specific authorization either before, during, or after an examination; or using or purporting to use any examin a- tion qu estions or materials which were improperly removed or taken from any examination for the purpose of instructing or pr eparing any applicant for examination; or selling, distributing, buying, receiving, or having unauthorized possession of any portion of a fu ture, current, or previously administered licensing examination. n- (b) Communicating with any other examinee during the admi istration of a licensing examination; copying answers from another examinee or permitting one’ s answers to be copied by another exam i- ’s possession during the administration of the l nee; having in one i- censing examination any books, equipment, notes, written or printed mat erials, or data of any kind, other than the examination materials distributed, or otherwise authorized to be in one’ s possession during the examination; or impersonating any examinee or having an impe r- sonator take the licensing examination on one ’s behalf. Nothing in this section shall preclude prosecution under the autho r- ity provided for in any other provision of law. In addition to any other penalties, a person found guilty of violating this section, shall be liable for the actual damages sustained by the agency administering the examination not to exceed ten thousand dollars ($10,000) and the costs of litigation. (c) I f any provision of this section or the application thereof to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of the section that can be given effect without the invalid provision or applicatio n, and to this end the pr o- visions of this section are severable.

229 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 197 Added Stats 1989 ch 1022 § 1. Amended Stats 1991 ch 647 § 1 (SB 879). Enjoining violations § 123.5. Whenever any person has engaged, or is about to engage, in any nstitute, or will constitute, a violation of acts or practices which co Section 123, the superior court in and for the county wherein the acts or practices take place, or are about to take place, may issue an in- junction, or other appropriate order, restraining such conduct on a p- ation of a board, the Attorney General or the district attorney of plic the county. The proceedings under this section shall be governed by Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure. The remedy provided for by t his section shall be in addition to, and not a limitation on, the authority provided for in any other provision of law. § 2, as B & P C § 497. Amended and Renumbered by Stats Added Stats 1983 ch 95 1989 ch 1022 § 4. § 124. Manner of notice Notwithstandin g subdivision (c) of Section 11505 of the Gover n- ment Code, whenever written notice, including a notice, order, or document served pursuant to Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), or Chapter 5 (commencing w ith Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code, is required to be given by any board in the d e- partment, the notice may be given by regular mail addressed to the last known address of the licentiate or by personal service, at the o p- tion of the board. Added Stats 1961 ch 1253 § 2. Amended Stats 1994 ch 26 § 4 (AB 1807), effective March 30, 1994; Stats 1995 ch 938 § 1 (SB 523), operative July 1, 1997. § 125. Misdemeanor offenses by licensees Any person, licensed under Division 1 (commencing with Section 100), Division 2(commencing with Section 500 ), or Division 3(commencing with Section 5000) is guilty of a misdemeanor and su b- ject to the disciplinary provisions of this code applicable to him or her, who conspires with a person not so licensed to violate any provision of this code, or who, with intent to aid or assist that person in violating those provisions does either of the following: (a) Allows his or her license to be used by that person. (b) Acts as his or her agent or par tner. Added Stats 1949 ch 308 § 1. Amended Stats 1994 ch 1206 § 2 (SB 1775).

230 198 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 125.3. Direction to licentiate violating licensing act to pay costs of investigation and enforcement (a) Except as otherwise provided by law, in any order issued in res o- e- lution of a disciplinary proceeding before any board within the d partment or before the Osteopathic Medical Board, upon request of the entity bringing the proceeding, the administrative law judge may direct a licentiate found to have committed a violation or violations of the licensing act to pay a sum not to exceed the reasonable costs of the investigation and enforcement of the case. (b) In the case of a disciplined licentiate that is a corporation or a partnership, the order may be made against the licensed c orporate entity or licensed partnership. (c) A certified copy of the actual costs, or a good faith estimate of costs where actual costs are not available, signed by the entity brin g- ing the proceeding or its designated representative shall be prima idence of reasonable costs of investigation and prosecution of facie ev n- the case. The costs shall include the amount of investigative and e forcement costs up to the date of the hearing, including, but not li m- ited to, charges imposed by the Attorney General. (d) Th e administrative law judge shall make a proposed finding of the amount of reasonable costs of investigation and prosecution of the case when requested pursuant to subdivision (a). The finding of the administrative law judge with regard to costs shall not be reviewable by the board to increase the cost award. The board may reduce or eliminate the cost award, or remand to the administrative law judge if the proposed decision fails to make a finding on costs requested pursuant to subdivision (a). (e) If an order for recovery of costs is made and timely payment is not made as directed in the board’s decision, the board may enforce the order for repayment in any appropriate court. This right of e n- forcement shall be in addition to any other rights the board may have as to any licentiate to pay costs. (f) In any action for recovery of costs, proof of the board’s decision shall be conclusive proof of the validity of the order of payment and the terms for payment. (g) (1) Except as provided in paragraph (2), the board shall not r e- new or reinstate the license of any licentiate who has failed to pay all of the costs ordered under this section. (2) Notwithstanding paragraph (1), the board may, in its di scretion, conditionally renew or reinstate for a maximum of one year t he l i- cense of any licentiate who demonstrates financial hardship and who enters into a formal agreement with the board to reimburse the board within that one -year period for the unpaid costs. (h) All costs recovered under this section shall be considered a re- imbursement for costs incurred and shall be deposited in the fund of

231 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 199 the board recovering the costs to be available upon appropriation by the Legislature. (i) Nothing in this section shall preclude a board from including the estigation and enforcement of a case in any recovery of the costs of inv stipulated settlement. (j) This section does not apply to any board if a specific statutory provision in that board’s licensing act provides for recovery of costs in an administrative disciplinary proceeding. (k) Notwithstanding the provisions of this section, the Medical Board of California shall not request nor obtain from a physician and o- surgeon, investigation and prosecution costs for a disciplinary pr ceeding against the licentiate. The board shall ensure tha t this subd i- e- vision is revenue neutral with regard to it and that any loss of rev nue or increase in costs resulting from this subdivision is offset by an increase in the amount of the initial license fee and the biennial r e- sion (e) of Section 2435. newal fee, as provided in subdivi Added Stats 1992 ch 1289 § 1 (AB 2743), effective January 1, 1993. Amended Stats 2001 ch 728 § 1 (SB 724); Stats 2005 ch 674 § 2 (SB 231), effective January 1, 2006; Stats 2006 ch 223 § 2 (SB 1438), effective January 1, 2007. § 125.5 . Enjoining violations; Restitution orders (a) The superior court for the county in which any person has e n- gaged or is about to engage in any act which constitutes a violation of a chapter of this code administered or enforced by a board within the department may, upon a petition filed by the board with the approval of the director, issue an injunction or other appropriate order r e- straining such conduct. The proceedings under this section shall be governed by Chapter 3 (commencing with Section 525) of Title 7 of board Part 2 of the Code of Civil Procedure. As used in this section, “ ” includes commission, bureau, division, agency and a medical quality review committee. (b) The superior court for the county in which any person has e n- gaged in any act which constitutes a violation of a chapter of this code administered or enforced by a board within the department may, u p- on a petition filed by the board with the approval of the director, o r- der such person to make restitution to persons injured as a result of such violation. (c) The court may order a person subject to an injunction or r e- straining order, provided for in subdivision (a) of this section, or su b- ject to an order requiring restitution pursuant to subdivision (b), to reimburse the petitioning board for expenses incurred by the board in its investigation related to its petition. (d) The remedy provided for by this section shall be in addition to, and not a limitation on, the authority provided for in any other se c- tion of this code.

232 200 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Added Stats 1972 ch 1238 § 1. Amended Stats 1973 ch 632 § 1; Stats 2d Ex Sess 1975 1. 2; Stats 1982 ch 517 § ch 1 § Unlawful discrimination by licensees § 125.6. (a) With regard to an applicant, every person who holds a license under the provisions of this code is subject to disciplinary action u n- der the disciplinary provisions of this code applicable to that person if, because of any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code, he or she refuses to perform the licensed activity o r aids or incites the refusal to perform that licensed activity by another licensee, or if, because of any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code, he performance of or she makes any discrimination, or restriction in the the licensed activity. Nothing in this section shall be interpreted to apply to discrimination by employers with regard to employees or prospective employees, nor shall this section authorize action against any club license issued pursuant c- to Article 4 (commencing with Se tion 23425) of Chapter 3 of Division 9 because of discriminatory membership policy. The presence of architectural barriers to an ind i- vidual with physical disabilities that conform to applicable state or and regulations shall not constitute discrimin local building codes a- tion under this section. (b)(1) Nothing in this section requires a person licensed pursuant to Division 2 (commencing with Section 500) to permit an individual to participate in, or benefit from, the license d activity of the licensee where that individual poses a direct threat to the health or safety of others. For this purpose, the term “ direct threat ” means a significant risk to the health or safety of others that cannot be eliminated by a modification of p olicies, practices, or procedures or by the provision of auxiliary aids and services. (2) Nothing in this section requires a person licensed pursuant to Division 2 (commencing with Section 500) to perform a licensed activ- ity for which he or she is not qual ified to perform. “Applicant, ” as used in this section, means a person appl (c)(1) ying for licensed services provided by a person licensed under this code. (2) “License, ” as used in this section, includes “certificate, ” “permit, ” “authority, ” and “registra tion ” or any other indicia giving authoriz a- tion to engage in a business or profession regulated by this code. Added Stats 1974 ch 1350 § 1. Amended Stats 1977 ch 293 § 1; Stats 1980 ch 191 § 1; Stats 1992 ch 913 § 2 (AB 1077); Stats 2007 ch 568 § 2 (AB 14) , effective January 1, 2008. § 125.7. Restraining orders In addition to the remedy provided for in Section 125.5, the superior court for the county in which any licensee licensed under Division 2

233 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 201 (commencing with Section 500), or any initiative act refer red to in that division, has engaged or is about to engage in any act that co n- stitutes a violation of a chapter of this code administered or enforced by a board referred to in Division 2 (commencing with Section 500), may, upon a petition filed by the boar d and accompanied by an affi- davit or affidavits in support thereof and a memorandum of points and authorities, issue a temporary restraining order or other appr o- priate order restraining the licensee from engaging in the business or profession for which the person is licensed or from any part thereof, in accordance with this section. (a) If the affidavits in support of the petition show that the licensee has engaged or is about to engage in acts or omissions constituting a and if the court is satisfied that violation of a chapter of this code o- permitting the licensee to continue to engage in the business or pr fession for which the license was issued will endanger the public health, safety, or welfare, the court may issue an order temporarily restraining the licensee from engaging in the profession for which he or she is licensed. (b) The order may not be issued without notice to the licensee unless it appears from facts shown by the affidavits that serious i njury would result to the public before the matter can be heard on n otice. (c) Except as otherwise specifically provided by this section, proceed- ings under this section shall be governed by Chapter 3 (commen cing with Section 525) of Title 7 of Part 2 of the Code of Civil Proc edure. (d) When a restraining order is issued pursuant to this section, or within a time to be allowed by the superior court, but in any case not more than 30 days after the restraining order is issued, an accusation shall be filed with the board pursuant to Section 11503 of the Go v- ernmen t Code or, in the case of a licensee of the State Department of Health Services, with that department pursuant to Section 100171 of the Health and Safety Code. The accusation shall be served upon the licensee as provided by Section 11505 of the Government Code. The licensee shall have all of the rights and privileges available as spec i- fied in Chapter 5 (commencing with Section 11500) of Part 1 of Div i- sion 3 of Title 2 of the Government Code. However, if the licensee r e- quests a hearing on the accusation, the board shall provide the lice n- see with a hearing within 30 days of the request and a decision within 15 days of the date the decision is received from the administrative law judge, or the court may nullify the restraining order previously issued. Any restr aining order issued pursuant to this section shall be dissolved by operation of law at the time the board ’s decision is su b- ject to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure. (e) The remedy provided for in this section shall be in addition to, and not a limitation upon, the authority provided by any other prov i- sion of this code.

234 202 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Added Stats 1977 ch 292 § 3 § 1. Amended Stats 1982 ch 517 § 2; Stats 1994 ch 1206 Stats 1998 ch 878 1 (SB 68), effective August 4, 1997; (SB 1775); Stats 1997 ch 220 § § 1.5 (SB 2239). § 125.8. Temporary order restraining licensee engaged or about to engage in violation of law In addition to the remedy provided for in Section 125.5, the supe- er Div i- rior court for the county in which any licensee licensed und sion 3 (commencing with Section 5000) or Chapter 2 (commencing with Se ction 18600) or Chapter 3 (commencing with Section 19000) of Division 8 has engaged or is about to engage in any act which constitutes a violation of a chapter of this code administered or e n- forced by a board referred to in Division 3 (commencing with Section 5000) or Chapter 2 (commencing with Section 18600) or Chapter 3 (commencing with Section 19000) of Division 8 may, upon a petition idavit or affidavits in filed by the board and accompanied by an aff support thereof and a memorandum of points and authorities, issue a temporary restraining order or other appropriate order restrai n- ing the licensee from engaging in the business or profession for which the person is licensed or from any part thereof, in accordance with the provisions of this se ction. (a) If the affidavits in support of the petition show that the licensee has engaged or is about to engage in acts or omissions constituting a he court is satisfied that violation of a chapter of this code and if t o- permitting the licensee to continue to engage in the business or pr fession for which the license was issued will endanger the public health, safety, or welfare, the court may issue an order temporarily restraining the licensee f rom engaging in the profession for which he is licensed. n- (b) Such order may not be issued without notice to the licensee u less it appears from facts shown by the affidavits that serious i njury would result to the public before the matter can be heard on n otice. (c) Except as otherwise specifically provided by this section, proceed- ings under this section shall be governed by Chapter 3 (commen cing with Section 525) of Title 7 of Part 2 of the Code of Civil Proc edure. (d) When a restraining order is issued pu rsuant to this section, or within a time to be allowed by the superior court, but in any case not more than 30 days after the restraining order is issued, an accusation shall be filed with the board pursuant to Section 11503 of the Go v- ernment Code. The acc usation shall be served upon the licensee as provided by Section 11505 of the Government Code. The licensee shall have all of the rights and privileges available as specified in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 o f the Government Code; however, if the licensee requests a hearing on the accusation, the board must provide the licensee with a hearing within 30 days of the request and a decision within 15 days of

235 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 203 the date of the conclusion of the hearing, or the court may nullify the restraining order previously issued. Any restraining order issued pursuant to this section shall be dissolved by operation of law at such ’s decision is subject to judicial review pursuant to Se c- time the board tion 1094.5 of the Code of Civil Procedure. § 3. Added Stats 1977 ch 443 § 1. Amended Stats 1982 ch 517 System for issuance of citations to licensees; § 125.9. Contents; Fines (a) Except with respect to persons regulated under Chapter 11 au, or commi ssion (commencing with Section 7500), any board, bure a- within the department, the board created by the Chiropractic Initi tive Act, and the Osteopathic Medical Board of California, may estab- lish, by regulation, a system for the issuance to a licensee of a citation f abatement or an order to pay an ad- which may contain an order o ministrative fine assessed by the board, bureau, or commission where the licensee is in violation of the applicable licensing act or any reg u- lation adopted pursuant thereto. visions: (b) The system shall contain the following pro (1) Citations shall be in writing and shall describe with particular i- ty the nature of the violation, including specific reference to the pr o- vision of law determined to have been violated. (2) Whenever appropriate, the citation shall contain an ord er of iolation. abatement fixing a reasonable time for abatement of the v (3) In no event shall the administrative fine assessed by the board, bureau, or commission exceed five thousand dollars ($5,000) for each inspection or each investigation made with re spect to the v iolation, or five thousand dollars ($5,000) for each violation or count if the viola- tion involves fraudulent billing su bmitted to an insurance company, the Medi -Cal program, or Med icare. In assessing a fine, the board, bureau, or commission s hall give due consideration to the appropr i- ateness of the amount of the fine with respect to factors such as the gravity of the violation, the good faith of the licensee, and the hi story of previous violations. (4) A citation or fine assessment issued purs uant to a cit ation shall inform the licensee that if he or she desires a hearing to contest the finding of a violation, that hearing shall be requested by written n o- tice to the board, bureau, or commission within 30 days of the date of issuance of the cita tion or assessment. If a hearing is not requested pursuant to this section, payment of any fine shall not constitute an admission of the violation charged. Hearings shall be held pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (5) Failure of a licensee to pay a fine within 30 days of the date of assessment, unless the citation is being appealed, may result in disc i-

236 204 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS plinary action being taken by the board, bureau, or commission. Where a citation is not contested and a fine is not paid, the full amount of the assessed fine shall be added to the fee for renewal of the license. A license shall not be renewed without payment of the renewal fee and fine. (c) The system may contain the following provis ions: (1) A citation may be issued without the assessment of an admini s- trative fine. (2) Assessment of administrative fines may be limited to only par- ticular violations of the applicable licensing act. (d) Notwithstanding any other provision of law, if a f ine is paid to satisfy an assessment based on the finding of a violation, payment of the fine shall be represented as satisfactory resolution of the matter for purposes of public disclosure. (e) Administrative fines collected pursuant to this section shall be deposited in the special fund of the particular board, bureau, or co m- mission. Added Stats 1986 ch 1379 § 2. Amended Stats 1987 ch 1088 § 1; Stats 1991 ch 521 § 1 (SB 650); Stats 1995 ch 381 § 4 (AB 910), effective August 4, 1995, ch 708 § 1 (SB 609); Stats 2000 ch 197 § 1 (SB 1636); Stats 2001 ch 309 § 1 (AB 761), ch 728 § 1.2 (SB 724); Stats 2003 ch 788 § 1 (SB 362); Stats 2012 ch 291 § 1 (SB 1077), effective January 1, 2013. Submission of reports to Governor § 126. Notwithstanding any other provisio n of this code, any board, co m- mission, examining committee, or other similarly constituted agency c- within the department required prior to the effective date of this se tion to submit reports to the Governor under any provision of this code shall not be req uired to submit such reports. Added Stats 1967 ch 660 § 1. § 127. Submission of reports to director Notwithstanding any other provision of this code, the director may t- require such reports from any board, commission, examining commi tee, or other similarl y constituted agency within the department as he deems reasonably necessary on any phase of their operations. Added Stats 1967 ch 660 § 2. § 128. Sale of equipment, supplies, or services for use in violation of licensing requirements Notwithstanding any other provision of law, it is a misdemeanor to sell equipment, supplies, or services to any person with knowledge that the equipment, supplies, or services are to be used in the pe r-

237 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 205 formance of a service or contract in violation of the licensing requir e- ment s of this code. The provisions of this section shall not be applicable to cash sales of less than one hundred dollars ($100). ” includes, but is not li For the purposes of this section, “ person m- m, or ited to, a company, partnership, limited liability company, fir corporation. license ” includes certificate or re g- For the purposes of this section, “ istration. A violation of this section shall be punishable by a fine of not less than one thousand dollars ($1,000) and by imprisonment in the cou n- ty jail not exceedi ng six months. Added Stats 1971 ch 1052 § 1. Amended Stats 1994 ch 1010 § 1 (SB 2053). § 128.5. Reduction of license fees in event of surplus funds (a) Notwithstanding any other provision of law, if at the end of any fiscal year, an agency within the Dep artment of Consumer Affairs, except the agencies referred to in subdivision (b), has unencumbered funds in an amount that equals or is more than the agency ’s opera t- ing budget for the next two fiscal years, the agency shall reduce l i- cense or other fees, whether the license or other fees be fixed by sta t- ute or may be determined by the agency within limits fixed by stat- ute, during the following fiscal year in an amount that will reduce ’s any surplus funds of the agency to an amount less than the agency operati ng budget for the next two fiscal years. (b) Notwithstanding any other provision of law, if at the end of any fiscal year, the California Architects Board, the Board of Behavioral Sciences, the Veterinary Medical Board, the Court Reporters Board of Califor nia, the Medical Board of California, the Board of Vocational Nursing and Psychiatric Technicians, or the Bureau of Security and Investigative Services has unencumbered funds in an amount that equals or is more than the agency ’s operating budget for the ne xt two fiscal years, the agency shall reduce license or other fees, whether the license or other fees be fixed by statute or may be determined by the agency within limits fixed by statute, during the following fiscal year in an amount that will reduce any surplus funds of the agency to an amount less than the agency ’s operating budget for the next two fiscal years. Added Stats 1972 ch 938 § 2, effective August 16, 1972, as B & P C § 128. Amended Stats 1973 ch 863 § 3. Amended and Renumbered by Stats 1978 ch 1161 § 4. Amended Stats 1987 ch 850 § 3; Stats 1989 ch 886 § 2; Stats 1993 ch 1263 § 2 (AB 936); Stats 1994 ch 26 § 5 (AB 1807), effective March 30, 1994; Stats 1995 ch 60 § 2 (SB 42), effe c- tive July 6, 1995; Stats 1997 ch 759 § 2 (SB 827); Stats 2000 ch 1054 § 1 (SB 1863); Stats. 2009, Ch. 308 (SB 819).

238 206 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 129. Handling of complaints; Reports to Legislature ” means every board, bureau, board (a) As used in this section, “ e- commission, committee and similarly constituted agency in the d partment which issues licenses. i- (b) Each board shall, upon receipt of any complaint respecting a l centiate thereof, notify the complainant of the initial administrative action taken on his complaint within 10 days of receipt. Each board of the final action taken on his shall thereafter notify the complainant complaint. There shall be a notification made in every case in which the complainant is known. If the complaint is not within the jurisdi c- tion of the board or if the board is unable to dispose satisfactorily of the complaint, the board shall transmit the complaint together with any evidence or information it has concerning the complaint to the agency, public or private, whose authority in the opinion of the board will provide the most effective means to secure the relief sought. The board shall notify the complainant of such action and of any other means which may be available to the complainant to secure relief. (c) The board shall, when the board deems it appropriate, notify the person against whom the complaint is made of the nature of the co m- plaint, may request appropriate relief for the complainant, and may meet and confer with the complainant and the licentiate in order to mediate the complaint. Nothing in this subdivision shall be construed as authorizing or requiring any board to set or to modify any fee charged by a licentiate. (d) It shall be the continuing duty of the board to ascertain patterns of complaints and to report on all actions taken with respect to such gislature at least patterns of complaints to the director and to the Le once a year. The board shall evaluate those complaints dismissed for lack of jurisdiction or no violation and recommend to the director and to the Legislature at least once a year such statutory changes as it the board ’s functions and responsibil deems necessary to implement i- ties under this section. (e) It shall be the continuing duty of the board to take whatever a c- tion it deems necessary, with the approval of the director, to inform the public of its functions under this section. Added Stats 1972 ch 1041 § 1. § 130. Terms of office of agency members (a) Notwithstanding any other law, the term of office of any me m- ber of an agency designated in subdivision (b) shall be for a term of four years expiring on June 1. (b) Subdivision (a) appl ies to the following boards or committees: (1) The Medical Board of California. (2) The California Board of Podiatric Medicine. (3) The Physical Therapy Board of California.

239 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 207 (4) The Board of Registered Nursing, except as provided in subdiv i- sion (c) of Sect ion 2703. (5) The Board of Vocational Nursing and Psychiatric Technicians. (6) The State Board of Optometry. (7) The California State Board of Pharmacy. (8) The Veterinary Medical Board. (9) The California Architects Board. (10) The Landscape Architect Tec hnical Committee. (11) The Board for Professional Engineers and Land Surveyors. (12) The Contractors’ State License Board. (13) The State Board of Guide Dogs for the Blind. (14) The Board of Behavioral Sciences. . (15) The Court Reporters Board of California (16) The State Athletic Commission. (17) The Osteopathic Medical Board of California. (18) The Respiratory Care Board of California. (19) The Acupuncture Board. (20) The Board of Psychology. (21) The Structural Pest Control Board. Added Stats 1969 ch 465 § 1. Amended Stats 1971 ch 716 § 8; Stats 1978 ch 1161 § 5; Stats 1983 ch 150 § 2; Stats 1986 ch 655 § 1; Stats 1987 ch 850 § 4; Stats 1989 ch 886 § 3; Stats 1990 ch 1256 § 2 (AB 2649); Stats 1991 ch 359 § 2 (AB 1332); Stats 1994 ch 26 § 6 (AB 1807), effe 1.3 (SB 2039); Stats 1995 ch 60 ctive March 30, 1994, ch 1274 § 3 (SB 827); Stats 1998 ch 59 § § 3 (SB 42), effective July 6, 1995; Stats 1997 ch 759 § 4 (AB 969), ch 970 § 1 (AB 2802), ch 971 § 1 (AB 2721); Stats 2000 ch 1054 § 2 (SB 1863); 3 (SB 662); Stats 2009– 2010 4th Ex Sess ch 18 § 2 (ABX4 20), effe Stats 2001 ch 159 § c- tive October 23, 2009; Stats 2012 ch 4 § 1 (SB 98), effective February 14, 2012. See this section as modified in Governor’s Reorganization Plan No. 2 § 3 of 2012. Amended Stats 2013 ch 352 § 4 (AB 1317), effective September 26, 2013, operative July 1, 2013. § 131. Maximum number of terms Notwithstanding any other provision of law, no member of an age n- cy designated in subdivision (b) of Section 130 or member of a board, commission, committee, or similarly constituted agency in the d e- partment shall serve more than two consecutive full terms. Added Stats 1970 ch 1394 § 1, operative July 1, 1971. Amended Stats 1987 ch 850 § 5. § 134. Proration of license fees When the term of any license t- issued by any agency in the depar ment exceeds one year, initial license fees for licenses which are i ssued during a current license term shall be prorated on a yearly b asis. Added Stats 1974 ch 743 § 1. Amended Stats 1978 ch 1161 § 6.

240 208 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 135. Reexaminat ion of applicants ’s No agency in the department shall, on the basis of an applicant failure to successfully complete prior examinations, impose any add i- tional limitations, restrictions, prerequisites, or requirements on any x- applicant who wishes to particip ate in subsequent examinations e cept that any examining agency which allows an applicant conditio n- al credit for successfully completing a divisible part of an exam ination may require that an applicant be reexamined in those parts succes s- such applicant has not successfully co fully completed if mpleted all parts of the examination within a required period of time established wever, requires by the examining agency. Nothing in this section, ho e- the exemption of such applicant from the regular fees and requir me nts normally associated with examinations. § 2. Added Stats 1974 ch 743 . Licensure and citizenship or immigration status § 135.5 (a) The Legislature finds and declares that it is in the best inte rests of the State of California to provide persons who are not lawfully pr e- sent in the United States with the state benefits provided by all l i- censing acts of entities within the department, and therefore enacts this section pursuant to subsection (d) of Section 1621 of Title 8 of the United States Code. ithstanding subdivision (a) of Section 30, and except as r e- (b) Notw quired by subdivision (e) of Section 7583.23, no entity within the d e- partment shall deny licensure to an applicant based on his or her cit i- zenship status or immigration status. (c) Every board with in the department shall implement all r equired regulatory or procedural changes necessary to implement this section no later than January 1, 2016. A board may implement the provisions of this section at any time prior to January 1, 2016. Added Stats 2014 c h 752 § 2 (SB 1159), effective January 1, 2015. § 136. Notification of change of address; Punishment for failure to comply (a) Each person holding a license, certificate, registration, permit, or other authority to engage in a profession or occupation is sued by a board within the department shall notify the issuing board at its principal office of any change in his or her mailing address within 30 days after the change, unless the board has specified by regulations a shorter time period. (b) Except as oth erwise provided by law, failure of a licentiate to comply with the requirement in subdivision (a) constitutes grounds for the issuance of a citation and administrative fine, if the board has the authority to issue citations and administrative fines.

241 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 209 Added Stats 1994 ch 26 § 7 (AB 1807), effective March 30, 1994. mbers in Regulations requiring inclusion of license nu § 137. advertising, etc. Any agency within the department may promulgate regulations r e- quiring licensees to include their license numbers in any advertising, soliciting, or other presentments to the public. However, nothing in this section shall be construed to authorize regulation of any person not a licensee who engages in advertising, solicitation, or who makes any other presentment to the pu blic on behalf of a licensee. Such a person shall incur no liability pursuant to this section for communicating in any advertising, soliciting, or other ’s license number exactly as pr o- presentment to the public a licensee vided to him by the licensee or for failure to communicate such nu m- ber if none is provided to him by the licensee. Added Stats 1974 ch 743 § 3. § 138. Notice that practitioner is licensed; Evaluation of licensing examination Every board in the department, as defined in Section 22, shall i nit i- ate the process of adopting regulations on or before June 30, 1999, to require its licentiates, as defined in Section 23.8, to provide notice to their clients or customers that the practitioner is licensed by this state. A board shall be exempt from th a- e requirement to adopt regul tions pursuant to this section if the board has in place, in statute or regulation, a requirement that provides for consumer notice of a pra c- ’s status as a licensee of this state. titioner Added Stats 1998 ch 879 § 1 (SB 2238). Amended Stats 1999 ch 67 § 1 (AB 1105), effe c- tive July 6, 1999. § 139. Policy for examination development and valid ation, and occupational analysis (a) The Legislature finds and declares that occupational analyses and examination validation studies are f undamental components of licensure programs. It is the intent of the Legislature that the policy developed by the department pursuant to subdivision (b) be used by the fiscal, policy, and sunset review committees of the Legislature in their annual reviews of these boards, programs, and bureaus. (b) Notwithstanding any other provision of law, the department shall develop, in consultation with the boards, programs, bureaus, and divisions under its jurisdiction, and the Osteopathic Medical Board of California and the State Board of Chiropractic Examiners, a policy regarding examination development and validation, and occ u-

242 210 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS pational analysis. The department shall finalize and distribute this policy by September 30, 1999, to each of the boards, programs, bu- reaus, a nd divisions under its jurisdiction and to the Osteopathic Medical Board of California and the State Board of Chiropractic E x- aminers. This policy shall be submitted in draft form at least 30 days prior to that date to the appropriate fiscal, policy, and su nset review committees of the Legislature for review. This policy shall address, but shall not be limited to, the following issues: (1) An appropriate schedule for examination validation and occupa- tional analyses, and circumstances under which more frequen t re- views are appropriate. (2) Minimum requirements for psychometrically sound examination validation, examination development, and occupational analyses, in- cluding standards for sufficient number of test items. al examinations. (3) Standards for review of state and nation (4) Setting of passing standards. c- (5) Appropriate funding sources for examination validations and o cupational analyses. (6) Conditions under which boards, programs, and bureaus should use internal and external entities to conduct these re views. (7) Standards for determining appropriate costs of reviews of diffe r- ent types of examinations, measured in terms of hours required. (8) Conditions under which it is appropriate to fund permanent and limited term positions within a board, program, or bureau to manage these reviews. (c) Every regulatory board and bureau, as defined in Section 22, and every program and bureau administered by the department, the Osteopathic Medical Board of California, and the State Board of Ch i- submit to the director on or before Decem- ropractic Examiners, shall ber 1, 1999, and on or before December 1 of each subsequent year, its method for ensuring that every licensing examination administered by or pursuant to contract with the board is subject to periodic evalu- ation. T he evaluation shall include (1) a description of the occupa- tional analysis serving as the basis for the examination; (2) suff icient item analysis data to permit a psychometric evaluation of the items; (3) an assessment of the appropriateness of prerequisit es for admi t- tance to the examination; and (4) an estimate of the costs and pe r- sonnel required to perform these functions. The evaluation shall be revised and a new evaluation submitted to the director whenever, in the judgment of the board, program, or bur eau, there is a substa ntial change in the examination or the prerequisites for admittance to the examination. (d) The evaluation may be conducted by the board, program, or b u- reau, the Office of Professional Examination Services of the depar t- ment, the Osteo pathic Medical Board of California, or the State Board of Chiropractic Examiners or pursuant to a contract with a qualified

243 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 211 private testing firm. A board, program, or bureau that provides for development or administration of a licensing examination pursuan t to contract with a public or private entity may rely on an occupational analysis or item analysis conducted by that entity. The department shall compile this information, along with a schedule specifying when r- examination validations and occupational analyses shall be pe formed, and submit it to the appropriate fiscal, policy, and sunset r e- view committees of the Legislature by September 30 of each year. It is the intent of the Legislature that the method specified in this report be consistent with the poli cy developed by the department pursuant to subdivision (b). § 2 (AB 1105), effective July 6, 1999. Added Stats 1999 ch 67 Stats. 2009, Amended 307 (SB 821) Ch. Disciplinary action; Licensee’s failure to record cash § 140. transactions in payment of emplo yee wages Any board, as defined in Section 22, which is authorized under this code to take disciplinary action against a person who holds a license may take disciplinary action upon the ground that the licensee has failed to record and preserve for not les s than three years, any and all cash transactions involved in the payment of employee wages by a licensee. Failure to make these records available to an authorized representative of the board may be made grounds for disciplinary ac- tion. In any action broug ht and sustained by the board which involves a violation of this section and any regulation adopted thereto, the board may assess the licensee with the actual investigative costs in- curred, not to exceed two thousand five hundred dollars ($2,500). o pay those costs may result in revocation of the license. Any Failure t moneys collected pursuant to this section shall be deposited in the respective fund of the board. Added Stats 1984 ch 1490 § 2, effective September 27, 1984. § 141. Disciplinary action by for eign jurisdiction; Grounds for disciplinary action by state licensing board (a) For any licensee holding a license issued by a board under the jurisdiction of the department, a disciplinary action taken by another state, by any agency of the federal govern ment, or by another country for any act substantially related to the practice regulated by the Cali- fornia license, may be a ground for disciplinary action by the respe c- tive state licensing board. A certified copy of the record of the disc i- plinary action taken against the licensee by another state, an agency of the federal government, or another country shall be conclusive ev i- dence of the events related therein.

244 212 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (b) Nothing in this section shall preclude a board from applying a specific statutory provision in the licensing act administered by that board that provides for discipline based upon a disciplinary action taken against the licensee by another state, an agency of the federal government, or another country. Added Stats 1994 ch 1275 § 2 (SB 2101). § 143. Proof of license as condition of bringing action for collection of compensation (a) No person engaged in any business or profession for which a l i- cense is required under this code governing the department or any board, bureau, commission, committee, or program within the de- q- partment, may bring or maintain any action, or recover in law or e m- uity in any action, in any court of this state for the collection of co pensation for the performance of any act or contract for which a l i- cense is required without alleging and proving that he or she was du- ntract, ly licensed at all times during the performance of that act or co regardless of the merits of the cause of action brought by the person. (b) The judicial doctrine of substantial compliance shall not apply to this section. (c) This section shall not apply to an act or contract that is consi d- ered to qualify as lawful practice of a licensed occupation or profe s- sion pursuant to Section 121. § 1.5 (AB 3242). Added Stats 1990 ch 1207 § 143.5 . Provision in agreement s to settle certain causes of action prohibited; Adoption of regulations; Exemptions (a) No licensee who is regulated by a board, bureau, or program rson within the Department of Consumer Affairs, nor an entity or pe acting as an authorized agent of a licen see, shall include or permit to be included a provision in an agreement to settle a civil dispute, whether the agreement is made before or after the com mencement of a civil action, that prohibits the other party in that dispute from co n- tacting, filing a co mplaint with, or cooperating with the department, board, bureau, or program within the Department of Consumer A f- fairs that regulates the licensee or that r equires the other party to withdraw a complaint from the department, board, bureau, or pr o- gram within the Department of Co nsumer Affairs that regulates the licensee. A provision of that nature is void as against public policy, and any licensee who includes or permits to be included a provision of that nature in a settlement agreement is subject to disciplinary action by the board, bureau, or program. (b) Any board, bureau, or program within the Department of Co n- sumer Affairs that takes disciplinary action against a licensee or li-

245 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 213 censees based on a complaint or report that has also been the su bject of a civ il action and that has been settled for monetary damages providing for full and final satisfaction of the parties may not require its licensee or licensees to pay any additional sums to the benefit of any plaintiff in the civil action. (c) As used in this section, “board” shall have the same meaning as defined in Section 22, and “licensee” means a person who has been granted a license, as that term is defined in Section 23.7. (d) Notwithstanding any other law, upon granting a petition filed by a licensee or authorized agent of a licensee pursuant to Section 11340.6 of the Government Code, a board, bureau, or program within idence and the Department of Consumer Affairs may, based upon ev legal authorities cited in the petition, adopt a regulation that does bot h of the following: c- (1) Identifies a code section or jury instruction in a civil cause of a tion that has no relevance to the board's, bureau's, or program's en- forcement responsibilities such that an agreement to settle such a code section or jury instruction othe r- cause of action based on that wise prohibited under subdivision (a) will not impair the board's, bu- reau's, or program's duty to protect the public. (2) Exempts agreements to settle such a cause of action from the requirements of subdivision (a). (e) This section shall not apply to a licensee subject to Section 2220.7. Added Stats 2012 ch 561 § 1 (AB 2570), effective January 1, 2013. Requirement of fingerprints for criminal record § 144. checks; Applicability (a) Notwithstanding any other law, an agency designated in subd i- vision (b) shall require an applicant to furnish to the agency a full set of fingerprints for purposes of conducting criminal history record e- checks. Any agency designated in subdivision (b) may obtain and r ceive, at its discretio n, criminal history information from the D e- partment of Justice and the United States Federal Bureau of Invest i- gation. (b) Subdivision (a) applies to the following: (1) California Board of Accountancy. (2) State Athletic Commission. (3) Board of Behavioral Sciences. (4) Court Reporters Board of California. (5) State Board of Guide Dogs for the Blind. (6) California State Board of Pharmacy. (7) Board of Registered Nursing. (8) Veterinary Medical Board. (9) Board of Vocational Nursing and Psychiatric Technicians.

246 214 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (10) Respiratory Care Board of California. (11) Physical Therapy Board of California. (12) Physician Assistant Committee of the Medical Board of Cali- fornia. (13) Speech -Language Pathology and Audiology and Hearing Aid Dispensers Board. (14) Medical Board of California. (15) State Board of Optometry. (16) Acupuncture Board. (17) Cemetery and Funeral Bureau. (18) Bureau of Security and Investigative Services. (19) Division of Investigation. (20) Board of Psychology. herapy. (21) California Board of Occupational T (22) Structural Pest Control Board. (23) Contractors ’ State License Board. (24) Naturopathic Medicine Committee. (25) Professional Fiduciaries Bureau. (26) Board for Professional Engineers, Land Surveyors, and Geol o- gists. (27) Bureau of Medical Can nabis Regulation. (28) California Board of Podiatric Medicine. (29) Osteopathic Medical Board of California. p- (c) For purposes of paragraph (26) of subdivision (b), the term “a plicant” shall be limited to an initial applicant who has never been n- registered or licensed by the board or to an applicant for a new lice sure or registration category. Added Stats 1997 ch 758 § 2 (SB 1346). Amended Stats 2000 ch 697 § 1.2 (SB 1046), operative January 1, 2001; Stats 2001 ch 159 § § 2 (AB 1409) (ch 687 4 (SB 662), ch 687 prevails); Stats 2002 ch 744 § 1 (SB 1953), ch 825 § 1 (SB 1952); Stats 2003 ch 485 § 2 (SB 907), ch 789 § 1 (SB 364), ch 874 § 1 (SB 363); Stats 2004 ch 909 § 1.2 (SB 136), effective September 30, 2004; Stats 2009 ch 308 § 4 (SB 819), effective Januar y 1, 2010; Stats 2011 ch 448 1 (SB § 1 (SB 543), effective January 1, 2012; Stats 2015 ch 719 § 643), effective January 1, 2016; Stats 2016 ch 32 § 3 (SB 837), effective June 27, 2016. Stats 2017 ch 775 § 3 (SB 798), effective January 1, 2018. Chapter 2 The Director of Consumer Affairs § 150. Designation The department is under the control of a civil executive officer who is known as the Director of Consumer Affairs. Enacted Stats 1937. Amended Stats 1971 ch 716 § 9.

247 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 215 § 151. Appointment and tenure; Sal ary and traveling expenses The director is appointed by the Governor and holds office at the o- ’s pleasure. The director shall receive the annual salary pr Governor vided for by Chapter 6 (commencing with Section 11550) of Part 1 of he Government Code, and his or her necessary Division 3 of Title 2 of t traveling expenses. Stats 1937. Amended Stats 1943 ch 1029 § 1; Stats 1945 ch 1185 § 2; Stats Enacted 1947 ch 1442 § 1; Stats 1951 ch 1613 § § 2, ch 268 § 0.1, effective 14; Stats 1984 ch 144 s 1985 ch 106 § June 30, 1984; Stat 1. § 152. Departmental organization For the purpose of administration, the reregistration and clerical work of the department is organized by the director, subject to the approval of the Governor, in such manner as he deems necessary prop erly to segregate and conduct the work of the department. Enacted Stats 1937. § 152.5. Extension of renewal dates For purposes of distributing the reregistration work of the depar t- ment uniformly throughout the year as nearly as practicable, the boards in x- the department may, with the approval of the director, e tend by not more than six months the date fixed by law for the r e- newal of any license, certificate or permit issued by them, except that in such event any renewal fee which may be involved shall be prora t- ter ed in such manner that no person shall be required to pay a grea w- or lesser fee than would have been required had the change in rene al dates not occurred. Added Stats 1959 ch 1707 § 1. § 152.6. Establishment of license periods and renewal dates Notwithstanding any other provision of this code, each board within the department shall, in cooperation with the director, establish such license periods and renewal dates for all licenses in such manner as best to distribute the renewal work of all board s throughout each year and permit the most efficient, and economical use of personnel and equipment. To the extent practicable, provision shall be made for the proration or other adjustment of fees in such manner that no person shall be required to pay a g reater or lesser fee than he would have been required to pay if the change in license periods or renewal dates had not occurred. As used in this section “ license ” includes “certificate, ” “permit, ” “au- thority, ” “registration, ” and similar indicia of authority to engage in a

248 216 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS business or profession, and “ “board, ” “commission, ” board ” includes icense. ” and an individual who is authorized to renew a l “committee, Added Stats 1968 ch 1248 § 1. § 153. Investigations The director may investigate the work of the several boards in his m- department and may obtain a copy of all records and full and co plete data in all official matters in possession of the boards, their members, officers, or employees, other than examination questions scheduled examinations. prior to submission to applicants at Enacted Stats 1937. Matters relating to employees of boards § 154. Any and all matters relating to employment, tenure or discipline of employees of any board, agency or commission, shall be initiated by said board, agency or comm ission, but all such actions shall, before reference to the State Personnel Board, receive the approval of the appointing power. To effect the purposes of Division 1 of this code and each agency of the department, employment of all personnel shall be in ac cord with Article XXIV of the Constitution, the law and rules and regulations of the State Personnel Board. Each board, agency or commission, shall select its employees from a list of eligibles obtained by the appointing power from the State Personnel Boar d. The person selected by the board, agency or commission to fill any position or vacancy shall thereafter be reported by the board, agency or commission, to the a p- pointing power. Enacted Stats 1937. Amended Stats 1945 ch 1276 § 4. § 154.5. Legal assista nce for experts aiding in investig ations of licensees If a person, not a regular employee of a board under this code, i n- cluding the Board of Chiropractic Examiners and the Osteopathic Medical Board of California, is hired or under contract to provide e x- per tise to the board in the evaluation of an applicant or the conduct of a licensee, and that person is named as a defendant in a civil action arising out of the evaluation or any opinions rendered, statements made, or testimony given to the board or its repr esentatives, the board shall provide for representation required to defend the defe ndant in that civil action. The board shall not be liable for any judgment re n- dered against the person. The Attorney General shall be utilized in the action and his or her s ervices shall be a charge against the board.

249 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 217 Added Stats 1986 ch 1205 § 1, as B & P C § 483. Amended and Renumbered by Stats 3 (AB 1332). 8. Amended Stats 1991 ch 359 § 1987 ch 850 § ployees § 155. Employment of investigators; Inspectors as em or under co ntract (a) In accordance with Section 159.5, the director may employ such investigators, inspectors, and deputies as are necessary properly to investigate and prosecute all violations of any law, the enforcement of which is charged to the department or to any board, agency, or co m- mission in the department. (b) It is the intent of the Legislature that inspectors used by boards, bureaus, or commissions in the department shall not be required to be employees of the Division of Investigation, but may either be e m- ployees of, or under contract to, the boards, bureaus, or commissions. c- Contracts for services shall be consistent with Article 4.5 (commen ing with Section 19130) of Chapter 6 of Part 2 of Division 5 of Title 2 of the Government Code. All civil service employees currently e m- ployed as inspectors whose functions are transferred as a result of this section shall retain their positions, status, and rights in accor d- ance with Section 19994.10 of the Government Code and the State Civil Service Act (Part 2 (comme ncing with Section 18500) of Division 5 of Title 2 of the Government Code). n- (c) Nothing in this section limits the authority of, or prohibits, i c- vestigators in the Division of Investigation in the conduct of inspe tions or investigations of any licensee, or in the conduct of investig a- tions of any officer or employee of a board or the department at the specific request of the director or his or her designee. Enacted Stats 1937. Amended Stats 1945 ch 1276 § 5; Stats 1971 ch 716 § 10; Stats 1985 ch 1382 § 1. § 156. Contractual authority (a) The director may, for the department and at the request and with the consent of a board within the department on whose behalf the contract is to be made, enter into contracts pursuant to Chapter 3 (commencing with Section 11250) of Part 1 of Division 3 of Title 2 of the Government Code or Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code for and on behalf of any board within the department. (b) In accordance with subdivision (a), the director may, in his or her discretion, negotiate and execute contracts for examination pu r- poses, which include provisions that hold harmless a contractor where liability resulting from a contract between a board in the d e- partment and the contractor is traceable to the state or its officers, agents, or employees.

250 218 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (c) The director shall report progress on release 3 entities’ trans i- tion to a new licensing technology platform to all the appropriate Progress committees of the Legislature by December 31 of each year. reports shall include updated plans and timelines for completing all of the following: (1) Business process documentation. (2) Cost benefit analyses of information technology options. (3) Information technology system development and implement a- tion. (4) Any other relevant steps needed to meet the IT needs of release 3 entities. (5) Any other information as the Legislature may request. § 1. Amended Stats 1984 ch 144 § 3; Stats 1988 ch 1448 § 1; Added Stats 1953 ch 864 § 2 (SB 547) Stats 2017 ch 429 , effective January 1, 2018. § 156.1. Retention of records by providers of services r elated to treatment of alcohol or drug impairment (a) Notwithstanding any other provision of law, individuals or ent i- ties contracting with the department or any board within the de- partment for the provision of services relating to the treatment and rehabilitation of licentiates impaired by alcohol or dangerous drugs shall retain all records and documents pertaining to those services cuments have been reviewed until such time as these records and do for audit by the department. These records and documents shall be retained for three years from the date of the last treatment or service rendered to that licentiate, after which time the records and doc u- ments may be purged and destroyed by the contract vendor. This pr o- vision shall supersede any other provision of law relating to the pur g- ing or destruction of records pertaining to those treatment and reh a- bilitation programs. (b) Unless otherwise expressly provided by statute or regulation, all records and documents pertaining to services for the treatment and rehabilitation of licentiates impaired by alcohol or dangerous drugs provided by any contract vendor to the department or to any board within the department shall be kept conf idential and are not subject to discovery or subpoena. (c) With respect to all other contracts for services with the depar t- ment or any board within the department other than those set forth in subdivision (a), the director or chief deputy director may requ est an examination and audit by the department ’s internal auditor of all performance under the contract. For this purpose, all documents and records of the contract vendor in connection with such performance shall be retained by such vendor for a period of three years after final payment under the contract. Nothing in this section shall affect the

251 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 219 authority of the State Auditor to conduct any examination or audit under the terms of Section 8546.7 of the Government Code. . Amended Stats 2003 ch 107 § § 3 (AB 1893) 1 (AB 569); Stats Added Stats 1991 ch 654 2010 ch 517 § 1 (SB 1172), effective January 1, 2011. Leases for examination or meeting purposes § 156.5. The director may negotiate and execute for the department and for eements for short -term hiring of its component agencies, rental agr space and furnishings for examination or meeting purposes. The di- rector may, in his or her discretion, negotiate and execute contracts o- for that space which include provisions which hold harmless the pr ere liability resulting from use of the space u n- vider of the space wh der the contract is traceable to the state or its officers, agents, or em- ployees. Notwithstanding any other provision of law, the director may, in his or her discretion, advance payments as deposits to reserv e and hold examination or meeting space. Any such agreement is su b- ject to the approval of the legal office of the Department of General Services. Added Stats 1967 ch 1235 § 1. Amended Stats 1988 ch 1448 § 1.5. § 157. Expenses in criminal prosecutions and ssional unprofe conduct proceedings Expenses incurred by any board or on behalf of any board in any criminal prosecution or unprofessional conduct proceeding constitute proper charges against the funds of the board. Added Stats 1937 ch 474. § 158. Refund s to applicants With the approval of the Director of Consumer Affairs, the boards and commissions comprising the department or subject to its jurisdi c- tion may make refunds to applicants who are found ineligible to take are insufficient to entitle them the examinations or whose credentials to certificates or licenses. Notwithstanding any other provision of law any application fees, li- cense fees or penalties imposed and collected illegally, by mistake, inadvertence, or error shall be refunded. Claims authoriz ed by the department shall be filed with the State Controller, and the Contro l- ler shall draw his warrant against the fund of the agency in payment of such refund. Added Stats 1937 ch 474. Amended Stats 1945 ch 1378 § 1; Stats 1971 ch 716 § 11.

252 220 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 159. Adm inistration of oaths u- The members and the executive officer of each board, agency, b reau, division, or commission have power to administer oaths and affirmations in the performance of any business of the board, and to certify to official acts. § 5. Added Stats 1947 ch 1350 Division of Investigation; Appointments; Health § 159.5. Quality Investigation Unit (1) There is in the department the Division of Investigation. The (a) division is in the charge of a person with the title of chief of the div i- sion. Except as provided in Section 160, investigators who have the (2) authority of peace officers, as specified in subdivision (a) of Se ction 160 and in subdivision (a) of Section 830.3 of the Penal Code, shall be ector. in the division and shall be appointed by the dir (1) There is in the Division of Investigation the Health Quality (b) Investigation Unit. The primary responsibility of the unit is to inve s- tigate violations of law or regulation within the jurisdiction of the Medical Board of California, the Califor nia Board of Podiatric Med i- cine, the Board of Psychology, the Osteopathic Medical Board of Cal i- fornia, the Physician Assistant Board, or any entities under the juri s- diction of the Medical Board of California. (2) The Medical Board of California shall not be charged an hourly rate for the performance of investigations by the unit. (3) This subdivision shall become operative on July 1, 2014. 12. Amended Stats 1985 ch 1382 § 2; Stats 2010 ch 719 § Added Stats 1971 ch 716 § 2 (SB 856), effective October 19, 2010; Stats 2013 ch 515 § 1 (SB 304), effective January 1, 2014. § 161. Sale of copies of public records The department, or any board in the department, may sell copies of any part of its respective public records, or compilations, extracts, or information contained in its public records, at a charge summaries of sufficient to pay the actual cost thereof. Such charge, and the condi- tions under which sales may be made, shall be determined by the d i- rector with the approval of the Department of General Services. Added Stats 1949 ch 704 § 1. Amended Stats 1963 ch 590 § 1; Stats 1965 ch 371 § 9. § 162. Evidentiary effect of certificate of records offi cer as to license, etc. The certificate of the officer in charge of the records of any board in the department tha t any person was or was not on a specified date, or

253 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 221 during a specified period of time, licensed, certified or registered u n- der the provisions of law administered by the board, or that the l i- cense, certificate or registration of any person was revoked or un der suspension, shall be admitted in any court as prima facie evidence of the facts therein recited. Added Stats 1949 ch 355 § 1. § 163. Fee for certification of records, etc. Except as otherwise expressly provided by law, the department and each board in the department shall charge a fee of two dollars ($2) for the certification of a copy of any record, document, or paper in its cu s- tody or for the certification of any document evidencing the content of any such record, document or paper. ch 1858 § 1. Amended Stats 1963 ch 590 § 2. Added Stats 1961 § 163.5. Delinquency fees; Reinstatement fees Except as otherwise provided by law, the delinquency, penalty, or late fee for any licensee within the Department of Consumer Affairs shall be 50 percent of the re newal fee for such license in effect on the date of the renewal of the license, but not less than twenty -five do l- lars ($25) nor more than one hundred fifty dollars ($150). A delinquency, penalty, or late fee shall not be assessed until 30 days have elapsed from the date that the licensing agency mailed a notice of renewal to the licensee at the licensee’ s last known address of record. The notice shall specify the date for timely renewal, and ss- that failure to renew in a timely fashion shall result in the asse ment of a delinquency, penalty, or late fee. In the event a reinstatement or like fee is charged for the rei n- statement of a license, the reinstatement fee shall be 150 percent of the renewal fee for such license in effect on the date of the reinstat e- ment of the license, but not more than twenty -five dollars ($25) in excess of the renewal fee, except that in the event that such a fee is fixed by statute at less than 150 percent of the renewal fee and less than the renewal fee plus twenty -five dollars ($25) , the fee so fixed shall be charged. Added Stats 1974 ch 743 § 4. Amended Stats 1985 ch 587 § 1. § 163.6. [Section repealed 1992.] Added Stats 1985 ch 587 § 2. Inoperative June 30, 1991. Repealed, operative January 1, 1992, by its own terms. The repealed section related to reduction in license renewal fees to offset increase in revenue.

254 222 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 164. Form and content of license, certificate, permit, or similar indicia of authority The form and content of any license, certificate, permit, or similar indicia of authority issued by any agency in the department, inclu d- ing any document evidencing renewal of a license, certificate, permit, or similar indicia of authority, shall be determined by the director after consultation with and consideration of the views of th e agency concerned. Added Stats 1971 ch 716 § 15. Amended Stats 1987 ch 850 § 6. Prohibition against submission of fiscal impact § 165. analysis relating to pending legislation without prior submission to director for comment ovision of law, no board, bureau, co Notwithstanding any other pr m- mittee, commission, or program in the Department of Consumer A f- fairs shall submit to the Legislature any fiscal impact analysis relat- ing to legislation pending before the Legislature until the analysis has been submitte e- d to the Director of Consumer Affairs, or his or her d signee, for review and comment. The boards, bureaus, committees, commissions, and programs shall include the comments of the dire ctor when submitting any fiscal impact analysis to the Legislature. This section shall not be construed to prohibit boards, bureaus, co mmittees, commissions, and programs from responding to direct requests for fi s- n- cal data from Members of the Legislature or their staffs. In those i ds, bureaus, committees, stances it shall be the responsibility of boar commissions, and programs to also transmit that info rmation to the director, or his or her designee, within five working days. § 0.2, effective June 30, 1984. Added Stats 1984 ch 268 § 166. Development of guidelines for mandatory co ntinuing education programs The director shall, by regulation, develop guidelines to prescribe components for mandatory continuing education programs admini s- tered by any board within the department. (a) The guidelines shall be developed to ensure that m andatory co n- tinuing education is used as a means to create a more competent l i- censing population, thereby enhancing public protection. The guide- lines shall require mandatory continuing education programs to ad- dress, at least, the following: (1) Course validity. (2) Occupational relevancy. (3) Effective presentation. (4) Actual attendance.

255 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 223 (5) Material assimilation. (6) Potential for application. (b) The director shall consider educational principles, and the ducation program guidelines shall prescribe mandatory continuing e formats to include, but not be limited to, the following: (1) The specified audience. (2) Identification of what is to be learned. (3) Clear goals and objectives. -on, or clinical (4) Relevant learning methods (participatory, hands . setting) n- (5) Evaluation, focused on the learner and the assessment of the i tended learning outcomes (goals and objectives). (c) Any board within the department that, after January 1, 1993, proposes a mandatory continuing education program for its licensees submit the proposed program to the director for review to assure shall that the program contains all the elements set forth in this section and complies with the guidelines developed by the director. (d) Any board administering a mandatory continuing education program that proposes to amend its current program shall do so in a manner consistent with this section. (e) Any board currently administering a mandatory continuing edu- cation program shall review the components and requirements of the program to determine the extent to which they are consistent with the guidelines developed under this section. The board shall submit a report of their findings to the director. The report shall identify the similarities and differences of its mandatory continuing education program. The report shall include any board -specific needs to explain ’s guidelines. the variation from the director o- (f) Any board administering a mandatory continuing education pr gram, when accepting hours for credit which are obtained out of state, shall ensure that the course for which credit is given is administered in accordance with the guidelines addressed in subdivision (a). (g) Nothing in this section or in the guidelines adopted by the dire c- tor shall be construed to repeal any requirements for cont inuing edu- cation programs set forth in any other provision of this code. Added Stats 1992 ch 1135 § 2.2 (SB 2044). Amended Stats 1994 ch 146 § 1 (AB 3601). Chapter 3 Funds of the Department § 200.1. Fund accruals exempt from transfer (a) Any accruals t hat occur on or after September 11, 1993, to any funds or accounts within the Professions and Vocations Fund that

256 224 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS realize increased revenues to that fund or account as a result of legi s- lation enacted on or after September 11, 1993, and that have not been g- transferred pursuant to Sections 13.50, 13.60, and 13.70 of the Bud et Act of 1993 on the effective date of the act that enacted this section, shall be exempt from the transfers contained in Sections 13.50, 13.60, and 13.70 of the Budget Act of 1993. These funds shall include, but not be limited to, all of the following: (1) Athletic Commission Fund. (2) Bureau of Home Furnishings and Thermal Insulation Fund. ’ License Fund. (3) Contractors (4) Private Investigator Fund. (5) Respiratory Care Fund. nal Nursing and Psychiatric Technicians Fund. (6) Vocatio (b) Subdivision (a) shall not apply to the Contingent Fund of the Medical Board of California. Added Stats 1994 ch 26 § 10 (AB 1807), effective March 30, 1994. Amended Stats 1997 ch 759 § 4 (SB 827). § 201. L evy for administrative expenses A charge for the estimated administrative expenses of the depar t- ment, not to exceed the available balance in any appropriation for any one fiscal year, may be levied in advance on a pro rata share basis nds of any of the boards, bureaus, commissions, against any of the fu divisions, and agencies, at the discretion of the director and with the approval of the Department of Finance. Enacted Stats 1937. Amended Stats 1947 ch 1350 § 4; Stats 1965 ch 371 § 10; Stats 1974 ch 1221 § 1. § 202.5. Itemized statement of services and changes from Department of Justice Prior to payment to the Department of Justice of any charges for legal services rendered to any board within the department, the D e- partment of Justice shall submit to the board an itemized statement of the services and charges. The itemized statement shall include de- tailed information regarding the services performed and the amount of time billed for each of those services. Added Stats 1994 ch 1273 § 1 (SB 2038). § 205. Pr ofessions and Vocations Fund (First of two; Operative until July 2, 2018) (a) There is in the State Treasury the Professions and Vocations Fund. The fund shall consist of the following special funds: (1) Accountancy Fund. (2) California Architects Board Fu nd.

257 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 225 (3) Athletic Commission Fund. (4) Barbering and Cosmetology Contingent Fund. (5) Cemetery and Funeral Fund. (6) Contractors ’ License Fund. (7) State Dentistry Fund. (8) Home Furnishings and Thermal Insulation Fund. -Lands cape Architects Fund. (9) California Architects Board (10) Contingent Fund of the Medical Board of California. (11) Optometry Fund. (12) Pharmacy Board Contingent Fund. (13) Physical Therapy Fund. (14) Private Investigator Fund. (15) Private Security Services Fund. neer ’s, Land Surveyor ’s, and Geologist ’s (16) Professional Engi Fund. (17) Consumer Affairs Fund. (18) Behavioral Sciences Fund. (19) Licensed Midwifery Fund. (20) Court Reporters” Fund. (21) Veterinary Medical Board Contingent Fund. (22) Vocational Nursing and Psychiatric Techn icians Fund. (23) Electronic and Appliance Repair Fund. (24) Dispensing Opticians Fund. (25) Acupuncture Fund. (26) Physician Assistant Fund. (27) Board of Podiatric Medicine Fund. (28) Psychology Fund. (29) Respiratory Care Fund. (30) Speech -Language Path ology and Audiology and Hearing Aid Dispensers Fund. (31) Board of Registered Nursing Fund. (32) Animal Health Technician Examining Committee Fund. (33) State Dental Hygiene Fund. (34) State Dental Assistant Fund. (35) Structural Pest Control Fund. ructural Pest Control Eradication and Enforcement Fund. (36) St (37) Structural Pest Control Research Fund. (b) For accounting and recordkeeping purposes, the Professions and Vocations Fund shall be deemed to be a single special fund, and each al funds therein shall constitute and be deemed to of the several speci be a separate account in the Professions and Vocations Fund. Each account or fund shall be available for expenditure only for the pu r- poses as are now or may hereafter be provided by law. (c) This section s hall become inoperative on July 1, 2018.

258 226 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Added Stats 2015 ch 510 § 2.3 (AB 179), effective January 1, 2016, operative July 1, 2016. Stats 2016 ch 800 § 1 (SB 1196), effective January 1, 2017, operative July 1, 2016; Stats 2017 ch 669 ective January 1, 2018, inoperative July 1, § 3.3 (AB 1705), eff 2018 (ch 669 prevails). § 205. Professions and Vocations Fund (Second of two; Operative July 1, 2018) (a) There is in the State Treasury the Professions and Vocations ng special funds: Fund. The fund shall consist of the followi (1) Accountancy Fund. (2) California Architects Board Fund. (3) Athletic Commission Fund. (4) Barbering and Cosmetology Contingent Fund. (5) Cemetery and Funeral Fund. ’ License Fund. (6) Contractors (7) State Dentistry Fund. (8) Home Furn ishings and Thermal Insulation Fund. (9) California Architects Board -Landscape Architects Fund. (10) Contingent Fund of the Medical Board of California. (11) Optometry Fund. (12) Pharmacy Board Contingent Fund. (13) Physical Therapy Fund. (14) Private Inve stigator Fund. (15) Private Security Services Fund. ’s, Land Surveyor ’s (16) Professional Engineer ’s, and Geologist Fund. (17) Consumer Affairs Fund. (18) Behavioral Sciences Fund. (19) Licensed Midwifery Fund. ’ Fund. (20) Court Reporters (21) Veterinary Me dical Board Contingent Fund. (22) Vocational Nursing and Psychiatric Technicians Fund. (23) Electronic and Appliance Repair Fund. (24) Dispensing Opticians Fund. (25) Acupuncture Fund. (26) Physician Assistant Fund. (27) Board of Podiatric Medicine Fund. (28) Psychology Fund. (29) Respiratory Care Fund. (30) Speech -Language Pathology and Audiology and Hearing Aid Dispensers Fund. (31) Board of Registered Nursing Fund. (32) Animal Health Technician Examining Committee Fund. (33) State Dental Hygiene Fund. (34) State Dental Assistant Fund. (35) Structural Pest Control Fund.

259 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 227 (36) Structural Pest Control Eradication and Enforcement Fund. (37) Structural Pest Control Research Fund. (38) Household Movers Fund. (b) For accounting and recordkeeping purposes, the Pro fessions and Vocations Fund shall be deemed to be a single special fund, and each of the several special funds therein shall constitute and be deemed to be a separate account in the Professions and Vocations Fund. Each r expenditure only for the pu r- account or fund shall be available fo poses as are now or may hereafter be provided by law. (c) This section shall become operative on July 1, 2018. § 2.3 (AB 179), effective January 1, 2016, operative July 1, Added Stats 2015 ch 510 0 § 1 (SB 1196), effective January 1, 2017, operative 2016. Amended Stats 2016 ch 80 3.5 (AB 1705), effective January 1, 2018, operative July 1, 2016. Stats 2017 ch 669 § July 1, 2018. Dishonored check tendered for payment of fine, fee, or § 206. penalty Notwithstanding any other prov ision of law, any person tendering a check for payment of a fee, fine, or penalty that was subsequently dishonored, shall not be granted a license, or other authority that they were seeking, until the applicant pays the amount outstanding from the dishonor ed payment together with the applicable fee, inclu d- ing any delinquency fee. The board may require the person whose check was returned unpaid to make payment of all fees by cashier ’s check or money order. § 12 (AB 1807), effective Mar ch 30, 1994. Added Stats 1994 ch 26 Contract with vendor of BreEZe system after written § 210. notification to certain committees of the Legislature; Term; Amount; Submission of report (Subdivision (b) inoperative December 1, 2018; Subdivision (c) operative term contingent) (a) (1) The department may enter into a contract with a ve ndor for the BreEZe system, the integrated, enterprisewide en forcement case management and licensing system described in the department's strategic plan, no sooner than 30 days after notification in writing to ations Committees of each house of the chairpersons of the Appropri the Legislature and the Chairperson of the Joint Legislative Budget Committee. (2) The amount of BreEZe system vendor contract funds, auth orized pursuant to this section, shall b e consistent with the project costs a p- proved by the office of the State Chief Information Officer based on its review and approval of the most recent BreEZe Special Project Report to be submitted by the department prior to contract award at the co n- clusion of procurement activities.

260 228 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (3) Paragraph (2) shall apply to all Budget Act items for the d e- partment that have an appropriation for the BreEZe system. (b) (1) If the department enters into a contract with a vendor for the on (a), the de partment shall, by BreEZe system pursuant to subdivisi December 31, 2014, submit to the Legislature, the Senate Commi ttee bly on Business, Professions and Economic Development, the Assem Committee on Business, Professions and Consumer Protection, and the budget committees of eac h house, a report analyzing the workload of licensing personnel employed by boards within the department partic ipating in the BreEZe system. (2) A report to the Legislature pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Gover nment Code. (3) This subdivision shall become inoperative on D ecember 1, 2018, nment Code. pursuant to Section 10231.5 of the Gover (c) (1) Notwithstanding any other provision of law, upon the r equest of the Department of Consumer Affairs, the Depa rtment of Finance may augment the budgets of the boards, bureaus, commissions, co m- mittees, programs, and divisions that comprise the D epartment of Consumer Affairs, as defined in Section 101, for expendi ture of non - costs. The augmentation General Fund moneys to pay BreEZe project may be made no sooner than 30 days after notification in writing to the chai rpersons of the committees in each house of the Legislature that consider appropriations and the Chairperson of the Joint Legi s- lative Budget Committee, or no sooner than whatever lesser time the chairperson of the joint committee may in each i nstance determine. The amount of funds augmented pursuant to the authority of this subdivision shall be consistent with project cost in creases approved by the Secretary of California Tec hnology based on the secretary's review and approval of the most recent BreEZe Special Project Report to be submitted at the conclusion of procurement activities. This su b- division shall apply to all Budget Act items for the boards, bureau s, commi ssions, committees, programs, and divisions that comprise the Department of Consumer Affairs, as defined in Se ction 101, that have an appropriation for the BreEZe system in the Budg et Act of 2011. (2) This subdivision shall become inoperative upon enactment of the Budget Act of 2012. Added Stats 2010 ch 719 § 4 (SB 856), effective October 19, 2010. Amended Stats 2011 ch 448 § 3 (SB 543), effective Jan uary 1, 2012.

261 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 229 Chapter 4 Consumer Affairs Article 1 General Provisions and Definitions tion of chapter § 300. Cita This chapter may be cited as the Consumer Affairs Act Added Stats 1970 ch 1394 § 3, operative July 1, 1971. Declaration of intent § 301. It is the intent of the Legislature and the purpose of this chapter to promote and protect the interests of the people as consumers. The n- Legislature finds that vigorous representation and protection of co sumer interests are essential to the fair and efficient functioning of a free enterprise market economy. The Legislature declares that gov- ernment advanc es the interests of consumers by facilitating the pro p- er functioning of the free enterprise market economy through (a) edu- cating and informing the consumer to insure rational consumer choice in the marketplace; (b) protecting the consumer from the sale of goods and services through the use of deceptive methods, acts, or practices which are inimical to the general welfare of consumers; (c) fostering competition; and (d) promoting effective representation of consumers ’ interests in all branches and levels of government. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. Amended Stats 1975 ch 1262 § 1. § 302. Definitions As used in this chapter, the following terms have the following meanings: (a) “Department ” means the Department of Consumer Affairs. “Director” means the Director of the Department of Consumer (b) Affairs. (c) “Consumer ” means any individual who seeks or acquires, by purchase or lease, any goods, services, money, or credit for personal, family, or household purposes. (d) “Person ” means an individual, partnership, corporation, limited liability company, association, or other group, however organized. (e) “Individual ” does not include a partnership, corporation, associ a- tion, or other group, however organized. (f) “Division ” means the Division of Consumer Services. (g) “Interests of consumers ” is limited to the cost, quality, purity, safety, durability, performance, effectiveness, dependability, avail a- bility, and adequacy of choice of goods and services offered or fu r-

262 230 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS nished to consumers and the adequacy and accuracy of information relating to consumer goods, services, money, or credit (including l a- beling, packaging, and advertising of contents, qualities, and terms of sales). § 3, operative July 1, 1971. Amended Stats 1972 ch 808 § 1; Added Stats 1970 ch 1394 Stats 1975 ch 1262 § 2; Stats 1994 ch 1010 § 2 (SB 2053). Division of Consumer Services; Chief [Repealed] § 303. § 2. Amended Stats 2017 ch 561 Added Stats 1972 ch 808 § 1 (AB 1516), effective Jan- uary 1, 2018. Repealed Stats 2017 ch 429 § 3 (SB 429), effective January 1, 2018 (ch 429 prevails). The repealed section related to the chief of the Division of Consumer Services. Article 2 Director and Employees § 305. Administration of chapter The director shall administer and enforce the provi sions of this chapter. Every power granted or duty imposed upon the director u n- der this chapter may be exercised or performed in the name of the director by a deputy or assistant director or the chief of the depar t- ’s Division of Consumer Services, subj ment ect to such conditions and limitations as the director may prescribe. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. Amended Stats 1971 ch 114 § 1, effective June 2, 1971, operative July 1, 1971. § 306. Employment matters The director, in accordan ce with the State Civil Service Act, may appoint and fix the compensation of such clerical or other personnel as may be necessary to carry out the provisions of this chapter. All such personnel shall perform their respective duties under the supe r- vision an d the direction of the director. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. § 307. Experts and consultants The director may contract for the services of experts and consul t- ants where necessary to carry out the provisions of this chapter and ma y provide compensation and reimbursement of expenses for such experts and consultants in accordance with state law. Added Stats 1975 ch 1262 § 3.

263 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 231 Article 3 Powers and Duties § 310. ’s powers and duties Director The director shall have the following power s and it shall be his duty to: (a) Recommend and propose the enactment of such legislation as necessary to protect and promote the interests of consumers. ’s interests before federal and state leg- (b) Represent the consumer islative hearings and executive co mmissions. n- (c) Assist, advise, and cooperate with federal, state, and local age mers. cies and officials to protect and promote the interests of consu (d) Study, investigate, research, and analyze matters affecting the interests of consumers. (e) Hold publi c hearings, subpoena witnesses, take testimony, com- pel the production of books, papers, documents, and other evidence, and call upon other state agencies for information. (f) Propose and assist in the creation and development of consumer education programs . (g) Promote ethical standards of conduct for business and consu m- ers and undertake activities to encourage public responsibility in the production, promotion, sale and lease of consumer goods and se rvices. tters affecting the (h) Advise the Governor and Legislature on all ma interests of consumers. (i) Exercise and perform such other functions, powers and duties as may be deemed appropriate to protect and promote the interests of consumers as directed by the Governor or the Legislature. and liaison with consumer groups in California (j) Maintain contact and nationally. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. Amended Stats 1975 ch 1262 § 4. § 311. Interdepartmental committee The director may create an interdepartmental committee to assist advise him in the implementation of his duties. The members of and such committee shall consist of the heads of state departments, or their designees. Members of such committee shall serve without com- pensation but shall be reimbursed for the expenses actually and ne c- essarily incurred by them in the performance of their duties. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. § 312. Report to Governor and Legislature The director shall submit to the Governor and the Legislature on or before January 1, 2003, and annually thereafter, a report of pr o-

264 232 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS grammatic and statistical information regarding the activities of the department and its constituent entities. The report shall include i n- s activities pursuant to Section 326, formation concerning the director’ inc luding the number and general patterns of consumer complaints and the action taken on those complaints. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. Amended Stats 1975 ch 1262 § 5; § 1 SB 1652); Stats 2002 ch 405 § 3 (AB 2973). Stats 1998 ch 829 Adoption of regulations in conformance with § 313.2. Americans with Disabilities Act The director shall adopt regulations to implement, interpret, and make specific the provisions of the Americans with Disabilities Act –336), as they relate to th e examination process for profes- (P.L. 101 sional licensing and certification programs under the purview of the department. Added Stats 1992 ch 1289 § 3 (AB 2743). § 313.5. Publication of consumer information bibliogr aphy The director shall periodically publish a bibliography of consumer information available in the department library and elsewhere. Such bibliography shall be sent to subscribers upon payment of a reason a- ble fee therefor. § 2. Amended Stats 1975 ch 1262 Added Stats 1972 ch 1251 § 7. Article 3.6 -Abusing Healing Arts Uniform Standards Regarding Substance Licensees § 315.2. Cease practice order (a) A board, as described in Section 315, shall order a licensee of the board to cease practice if the licensee tests positive for any su bstance that is prohi bited under the terms of the licensee ’s probation or dive r- sion program. (b) An order to cease practice under this section shall not be go v- erned by the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Governm ent Code. (c) A cease practice order under this section shall not constitute di s- ciplinary action. (d) This section shall have no effect on the Board of Registered Nursing pursuant to Article 3.1 (commencing with Section 2770) of Chapter 6 of Division 2. Ad ded Stats 2010 ch 517 § 2 (SB 1172), effective January 1, 2011.

265 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 233 § 315.4. Cease practice order for violation of probation or diversion program (a) A board, as described in Section 315, may adopt regulations au- thorizing the board to order a licensee on probation or in a diversion program to cease practice for major violations and when the board orders a licensee to undergo a clinical diagnostic evaluation pursuant to the uniform and specific standards adopted and authorized under Section 315. (b) An order t o cease practice under this section shall not be gov- erned by the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. s- (c) A cease practice order under this section shall not constitute di ary action. ciplin (d) This section shall have no effect on the Board of Registered Nursing pursuant to Article 3.1 (commencing with Section 2770) of Chapter 6 of Division 2. Added Stats 2010 ch 517 § 3 (SB 1172), effective January 1, 2011. Article 4 Representat ion of Consumers § 320. Intervention in administrative or judicial pr oceedings Whenever there is pending before any state commission, regulatory agency, department, or other state agency, or any state or federal court or agency, any matter or proceeding which the director finds may affect substantially the interests of consumers within California, the director, or the Attorney General, may intervene in such matter or proceeding in any appropriate manner to represent the interests of r, or any officer or employee designated by the consumers. The directo director for that purpose, or the Attorney General, may thereafter present to such agency, court, or department, in conformity with the rules of practice and procedure thereof, such evidence and argument as h e shall determine to be necessary, for the effective protection of the interests of consumers. Added Stats 1970 ch 1394 § 3, operative July 1, 1971. Amended Stats 1975 ch 1262 § 8. § 321. Commencement of legal proceedings Whenever it appears to the direc tor that the interests of the co n- sumers of this state are being damaged, or may be damaged, by any person who engaged in, or intends to engage in, any acts or practices in violation of any law of this state, or any federal law, the director or any officer or employee designated by the director, or the Attorney General, may commence legal proceedings in the appropriate forum

266 234 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS to enjoin such acts or practices and may seek other appropriate relief on behalf of such consumers. § 9. Added Stats 1975 ch 1262 Artic le 5 Consumer Complaints Actionable complaints § 325. It shall be the duty of the director to receive complaints from con- sumers concerning (a) unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in the conduc t of any trade or commerce; (b) the production, distribution, sale, and lease of any goods and services undertaken by any person which may i- endanger the public health, safety, or welfare; (c) violations of prov sions of this code relating to businesses and professions licensed by any agency of the department, and regulations promulgated pursuant (d) student concerns related to the Bureau for Private Pos thereto; t- secondary Education ’s performance of its responsibilities, including concerns that arise related to the Bureau for Private Postsecondary Education ’s handling of a complaint or its administration of the St u- dent Tuition Recovery Fund, established in Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Educa r- tion Code; and (e) other matters consistent with the pu poses of this chapter, whenever appropriate. § 3, operative July 1, 1971. Amended Stats 2016 ch 593 § 1 Added Stats 1970 ch 1394 (SB 1192), effective January 1, 2017. § 325.3. paging services Consumer complaints on In addition to the duties prescribed by Section 325, it shall be the duty of the director to receive complaints from consumers concerning services provided by the entities described in paragraph (2) of subdi- vision (b) of Section 234 of the Public Utilities Code. Added Stats 1995 ch 357 § 1 (AB 202). § 326. Proceedings on receipt of complaint (a) Upon receipt of any complaint pursuant to Section 325, the di- rector may notify the person against whom the complaint is made of the nature of the complaint and may request appropriate relief for the consumer. (b) The director shall also transmit any valid complaint to the local, state or federal agency whose authority provides the most effective means to secure the relief.

267 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 235 The director shall, if ap propriate, advise the consumer of the action taken on the complaint and of any other means which may be availa- ble to the consumer to secure relief. (c) If the director receives a complaint or receives information from any source indicating a probable violation of any law, rule, or order of any regulatory agency of the state, or if a pattern of complaints from consumers develops, the director shall transmit any complaint he or she considers to be valid to any appropriate law enforcement or reg u- latory agency and any evidence or information he or she may have concerning the probable violation or pattern of complaints or request the Attorney General to undertake appropriate legal action. It shall m- be the continuing duty of the director to discern patterns of co plaints and to ascertain the nature and extent of action taken with respect to the probable violations or pattern of complaints. § 3, operative July 1, 1971. Amended Stats 1978 ch 1161 Added Stats 1970 ch 1394 § 8; Stats 1989 ch 1360 § 1. Article 7 Persona l Information and Privacy Protection § 350. [Section repealed 2008.] Added Stats 2000 ch 984 § 1 (SB 129). Amended Stats 2001 ch 159 § 5 (SB 662). R e- pealed Stats 2007 ch 183 § 1 (SB 90), effective January 1, 2008. The repealed section ce of privacy protection. related to the offi § 352. [Section repealed 2008.] Added Stats 2000 ch 984 1 (SB 1102), effe c- § 1 (SB 129). Amended Stats 2004 ch 227 § tive August 16, 2004, operation contingent. Repealed Stats 2007 ch 183 § 2 (SB 90), effective January 1, 2008. T he repealed section related to commencement of activities under the article and funding for such. Chapter 6 Public Members § 450. Qualifications generally In addition to the qualifications provided in the respective chapters of this code, a public memb er or a lay member of any board shall not be, nor shall he have been within the period of five years immediately preceding his appointment, any of the following: (a) An employer, or an officer, director, or substantially fulltime representative of an employer or group of employers, of any licentiate of such board, except that this shall not preclude the appointment of a person which maintains infrequent employer status with such lice n-

268 236 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS tiate, or maintains a client, patient, or customer relationship with any s uch licentiate which does not constitute more than 2 percent of the practice or business of the licentiate. (b) A person maintaining a contractual relationship with a licent iate c- of such board, which would constitute more than 2 percent of the pra tice or b usiness of any such licentiate, or an officer, director, or su b- time representative of such person or group of per sons. stantially full- (c) An employee of any licentiate of such board, or a representative of such employee, except that this shall not preclude the appointment of a person who maintains an infrequent employee relationship or a person rendering professional or related services to a licentiate if such employment or service does not constitute more than 2 percent of the employment or practice of th e member of the board. § 2. Added Stats 1961 ch 2232 Conflicting pecuniary interests § 450.3. No public member shall either at the time of his appointment or during his tenure in office have any financial interest in any organ i- zation subject to regulatio n by the board, commission or committee of which he is a member. § 1. Added Stats 1972 ch 1032 [Section repealed 2003.] § 450.4. Added Stats 1976 ch 1188 § 1. Repealed Stats 2003 ch 563 § 1 (AB 827). The repealed section related to expertise required by board members. § 450.5. Prior industrial and professional pursuits A public member, or a lay member, at any time within five years immediately preceding his or her appointment, shall not have been engaged in pursuits which lie within the field of the industry or pro- fession, or have provided representation to the industry or profession, regulated by the board of which he or she is a member, nor shall he or she engage in those pursuits or provide that representation during his or her term of office. Added S tats 1961 ch 2232 § 2. Amended Stats 2003 ch 563 § 2 (AB 827). § 450.6. Age Notwithstanding any other section of law, a public member may be appointed without regard to age so long as the public member has reached the age of majority prior to appointment . Added Stats 1976 ch 1188 § 1.3.

269 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 237 § 451. Delegation of duties e- If any board shall as a part of its functions delegate any duty or r sponsibility to be performed by a single member of such board, such r or any lay delegation shall not be made solely to any public membe member of the board in any of the following instances: (a) The actual preparation of, the administration of, and the gra d- ing of, examinations. (b) The inspection or investigation of licentiates, the manner or ss, or their place of practice or method of practice or doing busine business. Nothing in this section shall be construed as precluding a public member or a lay member from participating in the formation of policy relating to the scope of the activities set forth in subdivisions (a) and (b) or in the approval, disapproval or modification of the action of its individual members, nor preclude such member from participating as a member of a subcommittee consisting of more than one member of the board in the performance of any duty. Added Stats 1961 ch 2232 § 2. § 452. “ Board ” “Board, ” as used in this chapter, includes a board, advisory board, commission, examining committee, committee or other similarly co n- stituted body exercising powers under this code. § 2. Amended S tats 1976 ch 1188 § 1.5. Added Stats 1961 ch 2232 Chapter 7 Licensee § 460. Powers of local governmental entities (a) No city or county shall prohibit a person or group of persons, a u- thorized by one of the agencies in the Department of Consumer A f- fairs by a license, certificat r- e, or other such means to engage in a pa ticular business, from engaging in that business,occupation, or pr o- fession or any portion thereof. (b) No city, county, or city and county shall prohibit a healingarts professional licensed with the state under Divi sion 2 (commencing with Section 500) from engaging in any act or performing any proc e- dure that falls within the professionally recognized scopeof practice of that licensee. (1) This subdivision shall not be construed to prohibit the enforc e- ment of a local ordinance in effect prior to January 1, 2010,related to any act or procedure that falls within the professionally recognized

270 238 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS scope of practice of a healing arts professional licensed under Div i- sion 2 (commencing with Section 500). l not be construed to prevent a city,county, (2) This subdivision shal or city and county from adopting or enforcing any local ordinance governing zoning, business licensing, or reasonable health and safety requirements for establishments or businesses of a healing arts pr o- l licensed under Division 2 (commencing with Section500). fessiona (c) Nothing in this section shall prohibit any city, county, or city and county from levying a business license tax solely forrevenue pu r- y for the poses, nor any city or county from levying a license taxsolel purpose of covering the cost of regulation. § 1. Amended Stats 1971 ch 716 Stats. 2009, Ch. 16. Added Stats 1967 ch 1095 § 24; Asking applicant to reveal arrest record prohi bited § 461. lication form No public agency, state or local, shall, on an initial app for any license, certificate or registration, ask for or require the appli- cant to reveal a record of arrest that did not result in a conviction or a plea of nolo contendere. A violation of this section is a misd emeanor. This section shall app ly in the case of any license, certificate or re g- istration provided for by any law of this state or local government, including, but not limited to, this code, the Corporations Code, the Education Code, and the Insurance Code. § 1. Added Stats 1975 ch 883 § 462. Inactive category of licensure (a) Any of the boards, bureaus, commissions, or programs within the department may establish, by regulation, a system for an inactive category of licensure for persons who are not actively engaged in the practice of their profession or vocation. (b) The regulation shall contain the following provisions: (1) The holder of an inactive license issued pursuant to this section shall not engage in any activity for which a license is required. (2) An inactive license issued pursuant to this section shall be r e- newed during the same time period in which an active license is r e- newed. The holder of an inactive license need not comply with any continuing education requirement for renewal of an active license. (3) The renewal fee for a license in an active status shall apply also for a renewal of a license in an inactive status, unless a lesser rene w- al fee is specified by the board. (4) In order for the holder of an inactive license issued pursuant to this section to restore his or her license to an active status, the holder of an inactive license shall comply with all the following: (A) Pay the renewal fee. (B) If the board requires completion of continuing education for r e- newal of an active license, complete continuing education equivalent

271 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 239 to that required for renewal of an active license, unless a different requirement is specified by the board. i- (c) This section shall not apply to any healing arts board as spec fied in Section 701. Added Stats 1994 ch 26 § 14 (AB 1807), effective March 30, 1994. § 464 . Retired category of licensure u- (a) Any of the boards within the department may establish, by reg lation, a system for a retired category of licensure for persons who are not actively engaged in the practice of their profession or voc ation. (b) The regulation shall contain the following: (1) A retired license shall be issued to a person with either an active license or an inactive license that was not placed on inactive status for disciplinary reasons. se issued pursuant to this section (2) The holder of a retired licen shall not engage in any activity for which a license is required, unless the board, by regulation, specifies the criteria for a retired li censee to practice his or her profession or vocation. icense shall not be required to renew (3) The holder of a retired l that license. (4) The board shall establish an appropriate application fee for a r e- tired license to cover the reasonable regulatory cost of issuing a r e- tired license. (5) In order for the holder of a retired license is sued pursuant to this section to restore his or her license to an active status, the holder of that license shall meet all the following: (A) Pay a fee established by statute or regulation. (B) Certify, in a manner satisfactory to the board, that he or she has not committed an act or crime constituting grounds for denial of licensure. b- (C) Comply with the fingerprint submission requirements esta lished by regulation. (D) If the board requires completion of continuing education for r e- newal of an active licens e, complete continuing educ ation equivalent to that required for renewal of an active license, u nless a different requirement is specified by the board. (E) Complete any other requirements as specified by the board by regulation. (c) A board may upon its o wn determination, and shall upon receipt of a complaint from any person, investigate the actions of any lice n- see, including a person with a license that either restricts or prohibits the practice of that person in his or her profession or vocation, inclu d- ing, but not limited to, a license that is retired, inactive, canceled, revoked, or suspended. (d) Subdivisions (a) and (b) shall not apply to a board that has ot her statutory authority to establish a retired license.

272 240 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Added Stats 2016 ch 473 § 1 (AB 2859), effective January 1, 2017. Chapter 8 Dispute Resolution Programs Article 1 Legislative Purpose Legislative intent § 465.5. It is the intent of the Legislature to permit counties to accomplish all of the following: l- (a) Encouragement and support of the development and use of a ternative dispute resolution techniques. (b) Encouragement and support of community participation in the development, administration, and oversight of local programs de- em- signed to facilitate the informal resolution of disputes among m bers of the community. (c) Development of structures for dispute resolution that may serve as models for resolution programs in other communities. (d) Education of communities with regard to the availability and benefits of alternative dispute resolution techniques. (e) Encouragement of courts, prosecuting authorities, public de- fenders, law enforcement agencies, and administrative agencies to work in cooperation with, and to make referrals to, dispute resolution programs. At the time that the state assume s the responsibility for the fun d- ing of California trial courts, consideration shall be given to the Dis- pute Resolution Advisory Council ’s evaluation of the effectiveness of alternative dispute resolution programs and the feasibility of the o p- eration of a statewide program of grants, with the intention of fun d- ing alternative dispute resolution programs on a statewide basis. Added Stats 1986 ch 1313 § 1. Article 3 Establishment and Administration of Programs § 467. Dispute Resolution Advisory Council (a) There is in the Division of Consumer Services of the Department of Consumer Affairs a Dispute Resolution Advisory Council. The a d- visory council shall complete the duties required by this chapter no later than January 1, 1989. (b) The advisory council shall consist of seven persons, five of whom shall be appointed by the Governor. One member shall be appointed by the Senate Rules Committee, and one member shall be appointed

273 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 241 by the Speaker of the Assembly. At least four of the persons appoin t- ed to the advisor y council shall be active members of the State Bar of California, and at least four persons appointed to the advisory council ilizing shall have a minimum of two years of direct experience in ut dispute resolution techniques. The members of the advisory cou ncil shall reflect the racial, ethnic, sexual, and geographic divers ity of the State of California. (c) The members of the advisory council shall not receive a salary for their services but shall be reimbursed for their actual and nece ssary r expenses incurred in the performance of their duties. travel and othe § 1. Amended Stats 1987 ch 28 § Added Stats 1986 ch 1313 1, effective May 28, 1987. Contract requirements; County programs § 467.1. (a) A program funded pursuant to this chapter shall be operated pu rsuant to contract with the county and shall comply with all of the d- requirements of this chapter and the rules and regulations of the a visory council. (b) Counties may establish a program of grants to public entities and nonpartisan nonprofit corporations for the establishment and continuance of programs to be operated under the requirements of this chapter and the standards developed by the advisory council. The board of supervisors of a county in which, because of the county ’s size, orized by Section 470.5 is insufficient to estab- the distribution auth lish a county program may enter into an agreement with the board of supervisors of one or more other such counties to establish a program authorized by this chapter on a regional basis. § 1. Amended Stats 1987 ch 28 § 2, effective May 28, 1987; Added Stats 1986 ch 1313 § 2 (AB 145), effective July 19, 2005, operative January 1, 2006. Stats 2005 ch 75 § 467.2. Eligibility for program funding A program shall not be eligible for funding under this chapter u n- les s it meets all of the following requirements: (a) Compliance with this chapter and the applicable rules and reg u- lations of the advisory council. (b) Provision of neutral persons adequately trained in conflict res o- lution techniques as required by the rules and regulations promu l- gated by the advisory council pursuant to Section 471. (c) Provision of dispute resolution, on a sliding scale basis, and without cost to indigents. (d) Provision that, upon consent of the parties, a written agreement or an award reso lving a dispute will be issued setting out a settle- ment of the issues involved in the dispute and the future responsibil i- ties of each party.

274 242 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (e) Provision of neutral procedures applicable equally to all partic i- pants without any special benefit or considera tion given to persons or entities providing funding for the programs. (f) Provision that participation in the program is voluntary and that the parties are not coerced to enter dispute resolution. (g) Provision of alternative dispute resolution is the prim ary pu r- pose of the program. (h) Programs operated by counties that receive funding under this chapter shall be operated primarily for the purposes of dispute res o- lution, consistent with the purposes of this chapter. § 1. Added Stats 1986 ch 1313 Provision of written statement to parties; Co § 467.3. ntents Programs funded pursuant to this chapter shall provide persons i n- dicating an intention to utilize the dispute resolution process with a n- written statement prior to the dispute resolution proceeding, in la guage easy to read and understand, stating all of the following: (a) The nature of the dispute. (b) The nature of the dispute resolution process. (c) The rights and obligations of the parties, including, but not li m- ited to, all of the following: (1) The r ight to call and examine witnesses. (2) The right of the parties to be accompanied by counsel, who may participate as permitted under the rules and procedures of the pr ogram. (d) The procedures under which the dispute resolution will be co n- ducted. (e) If t u- he parties enter into arbitration, whether the dispute resol tion process will be binding. Added Stats 1986 ch 1313 § 1. § 467.4. Agreements resolving disputes; Enforcement; Admissibility in evidence; Tolling statute of limitations (a) An agreement resol s- ving a dispute entered into with the assi tance of a program shall not be enforceable in a court nor shall it be admissible as evidence in any judicial or administrative proceeding, unless the consent of the parties or the agreement includes a prov i- sion th at clearly states the intention of the parties that the agre e- ment or any resulting award shall be so enforceable or admissible as evidence. (b) The parties may agree in writing to toll the applicable statute of limitations during the pendency of the disput e resolution process. Added Stats 1986 ch 1313 § 1.

275 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 243 § 467.5. Communications during mediation proceedings Notwithstanding the express application of Chapter 2 (commencing with Section 1115) of Division 9 of the Evidence Code to mediations, all proceedings conducted by a program funded pursuant to this cha p- ter, including, but not limited to, arbitrations and conciliations, are subject to Chapter 2 (commencing with Section 1115) of Division 9 of the Evidence Code. § 2. Amended Stats 1 997 ch 772 § 1 (AB 939). Added Stats 1988 ch 188 § 467.6. Statistical records; Anonymity of parties Each program shall maintain those statistical records required by Section 471.5, and as may be required by the county. The records y of the parties. shall maintain the confidentiality and anonymit Added Stats 1986 ch 1313 § 1. § 467.7. Withdrawal from dispute resolution; Criminal complaints; Waiver of right to counsel (a) Unless the parties have agreed to a binding award, nothing in this chapter shall be construed to prohibit any person who voluntarily enters the dispute resolution process from revoking his or her con- sent, withdrawing from dispute resolution, and seeking judicial or administrative redress. (b) In cases in which a criminal complaint has been filed by a pros e- other than for an infraction, the advice of counsel shall be o cutor, b- tained before any dispute resolution process is initiated. Nothing in this subdivision shall be construed to preclude a defendant from knowingly and voluntarily waiving the right to counsel. A defendant who indicates a desire to waive the right to counsel shall be encou r- aged to consult with the public defender or private counsel before waiving that right. Added Stats 1986 ch 1313 § 1. Article 4 Application Procedures § 468.1. Selection of pro grams Programs shall be selected for funding by a county from the appl i- cations submitted therefor. Added Stats 1986 ch 1313 § 1.

276 244 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 468.2. Applications; Required information Applications submitted for funding shall include, but need not be of the following information: limited to, all (a) Evidence of compliance with Sections 467.2, 467.3, and 467.4. (b) A description of the proposed community area of service, cost of the principal components of operation, and any other characteristics, es of the advisory council. as determined by rul (c) A description of available dispute resolution services and facil i- ties within the defined geographical area. ’s proposed program, by type and (d) A description of the applicant the present avai purpose, including evidence of community support, l- ability of resources, and the applicant ’s administrative capability. p- (e) A description of existing or planned cooperation between the a plicant and local human service and justice system agencies. (f) A demonstrated effort on the part of the applicant to show the manner in which funds that may be awarded under this program may be coordinated or consolidated with other local, state, or federal funds available for the activities described in Sections 467.2, 467.3, and 467.4. (g) An explanati on of the methods to be used for selecting and trai n- ing mediators and other facilitators used in the dispute resolution process. (h) Such additional information as may be required by the county. § 1. Added Stats 1986 ch 1313 § 468.3. Funding priorities; Criteria Data supplied by each applicant shall be used to assign relative funding priority on the basis of criteria developed by the advisory council. The criteria may include, but shall not be limited to, all of the following, in addition to the criteria set forth in Section 468.2: (a) Unit cost, according to the type and scope of the proposed pr ogram. (b) Quality and validity of the program. (c) Number of participants who may be served. (d) Administrative capability. (e) Community support factors. Added S tats 1986 ch 1313 § 1. Article 6 Funding § 470.1. Acceptance of funds by grant recipients (a) A grant recipient may accept funds from any public or private source for the purposes of this chapter.

277 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 245 (b) A county and its representatives may inspect, examin e, and a u- dit the fiscal affairs of the programs and the projects funded under this chapter. (c) Programs shall, whenever reasonably possible, make use of pu b- lic facilities at free or nominal costs. Added Stats 1986 ch 1313 § 1. County ’s share of funding § 470.2. A county ’s share of the funding pursuant to this chapter shall not exceed 50 percent of the approved estimated cost of the program. § 1. Added Stats 1986 ch 1313 § 470.3. [Section repealed 2006.] § 1. Amended Stats 1987 ch 28 § Added Stats 1986 ch 1313 3, effective May 28, 1987, ch 1431 § 1; Stats 1992 ch 685 § 2 (SB 1707), effective September 12, 1992; Stats 1998 ch 931 § 1 (SB 2139), effective September 28, 1998. Repealed Stats 2005 ch 75 § 3 (AB 145), effective July 19, 2005, operative January 1, 2006. The repealed section related to fees for support of programs. Monthly distributions from filing fees for support of § 470.5. dispute resolution programs (a) On and after January 1, 2006, as described in Section 68085.1 of the Government Code, t he Administrative Office of the Courts shall make monthly distributions from superior court filing fees for the support of dispute resolution programs under this chapter in each county that has acted to establish a program. The amount distributed ounty shall be equal to the following: in each c (1) From each first paper filing fee collected by the court as provi d- ed under Section 70611 or 70612, subdivision (a) of Section 70613, subdivision (a) of Section 70614, or Section 70670 of the Government Code, and ea ch first paper or petition filing fee collected by the court in a probate matter as provided under Section 70650, 70651, 70652, 70653, or 70655 of the Government Code, the same amount as was required to be collected for the support of dispute resolution pr ograms in that county as of December 31, 2005, when a fee was collected for the filing of a first paper in a civil action under Section 26820.4 of the Government Code. (2) From each first paper filing fee in a limited civil case collected by the court as p rovided under subdivision (b) of Section 70613 or subdivision (b) of Section 70614 of the Government Code, and each first paper or petition filing fee collected by the court in a probate matter as provided under Section 70654, 70656, or 70658 of the Go v- ern ment Code, the same amount as was required to be collected for the support of dispute resolution programs in that county as of D e-

278 246 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS cember 31, 2005, when a fee was collected for the filing of a first p a- per in a civil action under Section 72055 of the Governme nt Code where the amount demanded, excluding attorney ’s fees and costs, was ten thousand dollars ($10,000) or less. (b) Distributions under this section shall be used only for the su p- port of dispute resolution programs authorized by this chapter. The y shall deposit the amounts distributed under this section in an count account created and maintained for this purpose by the county. Re c- ords of these distributions shall be available for inspection by the public upon request. that does not already have a dis- (c) After January 1, 2006, a county tribution from superior court filing fees under this section and that establishes a dispute resolution program authorized by this chapter may approve a distribution under this section. A county that already has a distribution under this section may change the amount of the distribution. The total amount to be distributed for the support of dispute resolution programs under this section may not exceed eight dollars ($8) per filing fee. (d) The county may make changes under su bdivision (c) to be effe c- tive January 1 or July 1 of any year, on and after January 1, 2006. The county shall provide the Administrative Office of the Courts with a copy of the action of the board of supervisors that establishes the change at least 15 days before the date that the change goes into ef fect. 4 (AB 145), effective July 19, 2005, operative January 1, 2006. Added Stats 2005 ch 75 § § 470.6. Carry over of moneys and fees A county may carry over moneys received from distributions under Section 47 0.5 and from the fees for the support of dispute resolution programs autho rized by this chapter that were added to fees for filing a first paper in a civil ac tion in superior court under the laws in effect before January 1, 2006. Added Stats 2005 ch 75 § 5 (AB 145), effective July 19, 2005, operative January 1, 2006. Article 7 Rules and Regulations § 471.3. Statewide uniformity with guidelines contained in rules and regulations The rules and regulations adopted by the advisory council pursuant to Section 471 shall be formulated to promote statewide uniformity with the guidelines contained in those rules and regulations. Added Stats 1987 ch 28 § 6, effective May 28, 1987.

279 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 247 § 471.5. Annual provision of statistical data o- Each program funded pursuant to this chapter shall annually pr vide the county with statistical data regarding its operating budget; the number of referrals, categories, or types of cases referred to the program; the number of persons served by the program; the number of disputes resolved; th e nature of the disputes resolved; rates of compliance; the number of persons utilizing the process more than once; the duration of and the estimated costs of the hearings conduc t- ed by the programs; and any other information that the county may e data shall maintain the confidentiality and an onymity of require. Th the persons employing the dispute resolution process. § 1. Amended Stats 1987 ch 56 § 1. Added Stats 1986 ch 1313 DIVISION 1.2 JOINT COMMITTEE ON BOARDS, COMMISSIONS, AND CONSUMER PROTE CTION Chapt er 1 Review of Boards under the Department of nsumer Affairs Co § 473. [Section repealed 2011.] § 473.1. [Section repealed 2011.] § 473.15. [Section repealed 2011.] § 473.16. [Section repealed 2011.] [Section repealed 2000.] § 473.17. § 473.2. [Section re pealed 2011.] § 473.3. [Section repealed 2011.] [Section repealed 2011.] § 473.4. § 473.5. [Section repealed 2011.] [Section repealed 2011.] § 473.6. § 473. [Section repealed 2011.] Added Stats 1994 ch 908 § 5 (SB 2036). Amended Stats 1998 ch 991 § 2 (S B 1980); Stats 2003 ch 874 § 3 (AB 1467), effective April 13, 2004. § 2 (SB 363); Stats 2004 ch 33 Repealed Stats 2010 ch 670 § 3 (AB 2130), effective January 1, 2011. The repealed section related to the establishment of the Joint Committee on Boards, Comm issions, and Consumer Protection, powers and duties, designation of staff, and termination of Committee. § 473.1. [Section repealed 2011.] Added Stats 1994 ch 908 § 5 (SB 2036). Amended Stats 1997 ch 78 § 3.5 (AB 71); Stats 2000 ch 393 § 1 (SB 2028); Stats 2002 ch 825 § 2 (SB 1952); Stats 2003 ch 789 § 3 (SB 364); Stats 2009 ch 310 § 5 (AB 48), effective January 1, 2010. Repealed Stats 2010 ch

280 248 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS 670 § 3 (AB 2130), effective January 1, 2011. The repealed section related to applicabi l- Boards under the Department of Consumer Affairs. Review of ity of chapter “ ” § 473.15. [Section repealed 2011.] 1 (SB 2034); Stats Added Stats 1997 ch 759 § 6 (SB 827). Amended Stats 2000 ch 199 § § 1.5 (SB 2025), effective September 27, 2002; S tats 2002 ch 681 § 1 (SB 1954), ch 1012 2004 ch 33 § 4 (AB 1467), effective April 13, 2004; Stats 2005 ch 659 § 0.5 (SB 248), effective January 1, 2006; Stats 2006 ch 658 § 4 (SB 1476), effective January 1, 2007. § 3 (AB 2130), effective January 1, 2011. The repealed Repealed Stats 2010 ch 670 section related to review of specified boards by committee and legislative intent. [Section repealed 2011.] § 473.16. Added Stats 2005 ch 674 § 3 (SB 231), effective January 1, 2006. Repealed Stats 2010 ch 670 § 3 (AB 2130), effective January 1, 2011 i- . The repealed section related to exam nation and report of Medical Board of California ’s composition, initial and biennial fees, and report of findings. [Section repealed 2000.] § 473.17. § 1 (SB 1981). Repealed Stats 2000 ch 393 § 3 (SB 2028). The r Added Stats ch 736 e- pealed section related to review of referral of cases by specified boards to Licensing and Health Quality Enforcement Sections of Attorney General ’s office. § 473.2. [Section repealed 2011.] Added Stats 1994 ch 908 § 5 (SB 2036). Amended § 4 (SB 2028); Stats 2000 ch 393 § 4 (SB 364); Stats 2004 ch 33 Stats 2003 ch 789 § 5 (AB 1467), effective April 13, 2004. Repealed Stats 2010 ch 670 § 3 (AB 2130), effective January 1, 2011. The repealed section related to submission of analysis and repo rt to committee concerning the board. [Section repealed 2011.] § 473.3. Added Stats 1994 ch 908 § 5 (SB 2036). Amended Stats 1997 ch 78 § 3.7 (AB 71); Stats 5 (SB 2028); Stats 2001 ch 399 § 1 (AB 1720); Stats 2003 ch 789 § 5 (SB 2000 ch 393 § 2004 ch 33 § 6 (AB 1467), effective April 13, 2004. Repealed Stats 2010 ch 364); Stats 670 § 3 (AB 2130), effective January 1, 2011. The repealed section related to public hearings prior to termination, continuation, or reestablishment of any board, the r e- view of the Bureau for Private Postsecondary and Vocational Education and Bureau of Automotive Repair. [Section repealed 2011.] § 473.4. Added Stats 1994 ch 908 7 (AB 1467), effe c- § 5 (SB 2036). Amended Stats 2004 ch 33 § tive April 13, 2004. Repealed Stats 2010 ch 670 § 3 (AB 2130), effective January 1, 2011. The repealed section related to the evaluation of boards and regulatory programs and determination of need for continued existence. § 473.5. [Section repealed 2011.] Added Stats 1994 ch 908 § 5 (SB 2036). Ame nded Stats 2000 ch 393 § 6 (SB 2028); Stats 2004 ch 33 § 8 (AB 1467), effective April 13, 2004. Repealed Stats 2010 ch 670 § 3 (AB 2130), effective January 1, 2011. The repealed section related to report of findings

281 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 249 and preliminary recommendations by Joint Committee on Boards, Commissions, and Consumer Protection. [Section repealed 2011.] § 473.6. 2 (SB 2025), e § 7 (SB 827). Amended Stats 2002 ch 1012 § Added Stats 1997 ch 759 f- fective September 27, 2002; Stats 2004 ch 33 § 9 (AB 1467), effective April 13, 2004, ch 3 (AB 909 § 1.5 (SB 136), effective September 30, 2004. Repealed Stats 2010 ch 670 § 2130), effective January 1, 2011. The repealed section related to the referral of pr o- posals to create new licensure categories, change requirements, or create n ew licensing board to Joint Committee. DIVISION 1.5 DENIAL, SUSPENSION AND REVOCATION OF LICENSES Chapter 1 General Provisions Applicability of division § 475. Exemptions § 476. “Board ”; “License ” § 477. § 478. ”; “Material ” “Application Chapter 2 Denial of Licenses § 480. Grounds for denial; Effect of obtaining certificate of rehabilitation § 481. Crime and job -fitness criteria § 482. Rehabilitation criteria Attestation to good moral character of applicant § 484. Procedure upon denial § 485. Conte nts of decision or notice § 486. Hearing; Time § 487. § 488. Hearing request Denial of application without a hearing § 489. Chapter 3 Suspension and Revocation of Licenses § 490. Grounds for suspension or revocation; Discipline for substantially related crimes; Conviction; Legislative findings Suspension of license for failure to comply with child support order § 490.5. § 491. Procedure upon suspension or revocation § 493. Evidentiary effect of record of conviction of crime substantially related to licensee ’s qu alifications, functions, and duties § 494. Interim suspension or restriction order § 494.5. Agency actions when licensee is on certified list; Definitions; Collection and distribution of certified list information; Timing; Notices; Challenges by applicants and licensees; Release forms; Interagency agreements; Fees; Remedies; Inquiries and disclosure of information; Severability § 494.6. Suspension under Labor Code Section 244

282 250 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Chapter 4 Public Reprovals § 495. Public reproval of licentiate or certificate h older for act constituting grounds for suspension or revocation of license or certificate; Proceedings Chapter 5 Examination Security Grounds for denial, suspension, or revocation of license § 496. § 498. r action against license Fraud, deceit or misrepresentation as grounds fo ’s actions regarding application of § 499. Action against license based on licentiate another Chapter 1 General Provisions § 475. Applicability of division (a) Notwithstanding any other provisions of this code, the prov i- sions of this division shall govern the denial of licenses on the grounds of: w- (1) Knowingly making a false statement of material fact, or kno cense. ingly omitting to state a material fact, in an application for a li (2) Conviction of a crime. (3) Commission of any act involving dishonesty, fraud or deceit with the intent to substantially benefit himself or another, or substantially injure another. (4) Commission of any act which, if done by a licentiate of the bus i- ness or profession in question, would be grounds fo r suspension or revocation of license. (b) Notwithstanding any other provisions of this code, the prov isions of this division shall govern the suspension and revocation of licenses on grounds specified in paragraphs (1) and (2) of subdivision (a). (c) A li cense shall not be denied, suspended, or revoked on the grounds of a lack of good moral character or any similar ground relat- ing to an applicant ’s character, reputation, personality, or habits. Added Stats 1972 ch 903 § 1. Amended Stats 1974 ch 1321 § 1; S tats 1992 ch 1289 § 5 (AB 2743). § 476. Exemptions (a) Except as provided in subdivision (b), nothing in this division shall apply to the licensure or registration of persons pursuant to Chapter 4 (commencing with Section 6000) of Division 3, or pursuan t

283 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 251 to Division 9 (commencing with Section 23000) or pursuant to Chap- ter 5 (commencing with Section 19800) of Division 8. Section 494.5 shall apply to the licensure of persons authorized (b) to practice law pursuant to Chapter 4 (commencing with Section r- 6000) of Division 3, and the licensure or registration of persons pu suant to Chapter 5 (commencing with Section 19800) of Division 8 or pursuant to Division 9 (commencing with Section 23000). Added Stats 1972 ch 903 § 1. Amended Stats 1983 ch 721 § 1; Stats 2011 ch 455 § 2 (AB 1424), effective January 1, 2012. § 477. “ Board ”; “License ” As used in this division: “Board (a) “bureau, ” “commission, ” “committee, ” “depar t- ” includes ” “division, ” “program, ment, ” and “agency. ” ” “examining committee, “License ” inc ludes certificate, registration or other means to en- (b) gage in a business or profession regulated by this code. Added Stats 1972 ch 903 § 1. Amended Stats 1974 ch 1321 § 2; Stats 1983 ch 95 § 1; Stats 1991 ch 654 § 5 (AB 1893). “ ”; “Materi al ” § 478. Application (a) As used in this division, “ application ” includes the original doc u- t- ments or writings filed and any other supporting documents or wri e- ings including supporting documents provided or filed contemporan ously, or later, in support of the application whe ther provided or filed by the applicant or by any other person in support of the applic ation. (b) As used in this division, “ material ” includes a statement or omission substantially related to the qualifications, functions, or d u- ties of the business or profession. § 6 (AB 2743). Added Stats 1992 ch 1289 Chapter 2 Denial of Licenses § 480. Grounds for denial; Effect of obtaining certificate of rehabilitation (a) A board may deny a license regulated by this code on the grounds that the applicant has one o f the following: (1) Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction fo llowing a plea of nolo contendere. Any action that a board is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been

284 252 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS affirmed on appeal, or when an order granting probation is made su s- pending the imposition of sentence, irrespective of a subs equent order under the pr e- ovisions of Section 1203.4, 1203.4a, or 1203.41 of the P nal Code. (2) Done any act involving dishonesty, fraud, or deceit with the i n- tent to substantially benefit himself or herself or another, or substan- tially injure another. done by a licentiate of the business or (3) (A) Done any act that if profession in question, would be grounds for suspension or revoc ation of license. (B) The board may deny a license pursuant to this subdivision only if the crime or act is substantially related to the qualifications , fun c- tions, or duties of the business or profession for which application is made. (b) Notwithstanding any other provision of this code, a person shall not be denied a license solely on the basis that he or she has been convicted of a felony if he or she has obtained a certificate of rehabili- tation under Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code or that he or she has been convicted of a misdemeanor if he or she has met all applicable requirements of the criteria o f rehabilitation developed by the board to evaluate the reh a- bilitation of a person when considering the denial of a license under subdivision (a) of Section 482. (c) Notwithstanding any other provisions of this code, a person shall not be denied a license solely on the basis of a conviction that has been dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code. An applicant who has a conviction that has been dis- missed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the P enal Code shall provide proof of the dismissal. (d) A board may deny a license regulated by this code on the ground that the applicant knowingly made a false statement of fact that is required to be revealed in the application for the license. Added Stats 1974 ch 1321 § 4. Amended Stats 1976 ch 947 § 1; Stats 1979 ch 876 § 2; Stats 2008 ch 179 1 (AB § 2 (SB 1498), effective January 1, 2009; Stats 2014 ch 737 § 2396), effective January 1, 2015 . § 481. Crime and job -fitness criteria Each board under the provisions of this code shall develop criteria to aid it, when considering the denial, suspension or revocation of a license, to determine whether a crime or act is substantially related to the qualifications, functions, or duties of the business or profession it regulates. Added Stats 1974 ch 1321 § 6.

285 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 253 § 482. Rehabilitation criteria Each board under the provisions of this code shall develop criteria to evaluate the rehabilitation of a person when: (a) Considering the denial of a license by the board under Section 480; or (b) Considering suspension or revocation of a license under Section 490. a- Each board shall take into account all competent evidence of reh bilitation furnished by the applicant or licensee. § 1. Amended Stats 1974 ch 1321 § Added Stats 1972 ch 903 7. § 484. Attestation to good moral character of applicant No person applying for licensure under this code shall be required to submit to any licensing board any attestation by other persons to his good moral character. § 1. Amended Stats 1974 ch 1321 Added Stats 1972 ch 903 § 9. § 485. Procedure upon denial Upon denial of an application for a license under this chapter or Section 496, the board shall do either of the following: (a) File and serve a statement of issues in accordance with Chapter 5 (commencing w ith Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (b) Notify the applicant that the application is denied, stating (1) the reason for the denial, and (2) that the applicant has the right to a hearing under Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code if written request for hearing is made within 60 days after service of the notice of denial. -day period, Unless written request for hearing is made within the 60 ’s right to a hearing is deemed waived. the applicant Service of the notice of denial may be made in the manner autho r- ized for service of summons in civil actions, or by registered mail ad- dressed to the applicant at the latest address filed by the applicant in writing with the board in his or her application or otherwise. Service by mail is complete on the date of mailing. Added Stats 1972 ch 903 § 1. Amended Stats 1997 ch 758 § 2.3 (SB 1346). § 486. Contents of decision or notice Where the board has denied an application for a license under this chapter or Section 496, it shall, in its decision, or in its notice under subdivision (b) of Section 485, inform the applicant of the follo wing: (a) The earliest date on which the applicant may reapply for a li- cense which shall be one year from the effective date of the decision,

286 254 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS or service of the notice under subdivision (b) of Section 485, unless the board prescribes an earlier date or a later date is prescribed by another statute. (b) That all competent evidence of rehabilitatio n presented will be considered upon a reapplication. Along with the decision, or the notice under subdivision (b) of Se c- a- tion 485, the board shall serve a copy of the criteria relating to reh bilitation formulated under Section 482. § 1. Amended Stats 1974 ch 1321 § 9.5; Stats 1997 ch 758 Added Stats 1972 ch 903 § 2.4 (SB 1346). Hearing; Time § 487. If a hearing is requested by the applicant, the board shall conduct such hearing within 90 days from the date the hearing is requested unless the applicant sha ll request or agree in writing to a postpon e- ment or continuance of the hearing. Notwithstanding the above, the Office of Administrative Hearings may order, or on a showing of good cause, grant a request for, up to 45 additional days within which to conduct a hearing, except in cases involving alleged examination or licensing fraud, in which cases the period may be up to 180 days. In no case shall more than two such orders be made or requests be granted. Added Stats 1972 ch 903 § 1. Amended Stats 1974 ch 1321 § 1, § 10; Stats 1986 ch 220 effective June 30, 1986. Hearing request § 488. Except as otherwise provided by law, following a hearing requested by an applicant pursuant to subdivision (b) of Section 485, the board may take any of the following actions: (a) Grant the license effective upon completion of all licensing r e- quirements by the applicant. (b) Grant the license effective upon completion of all licensing r e- quirements by the applicant, immediately revoke the license, stay the probationary conditions on the license, which revocation, and impose may include suspension. (c) Deny the license. (d) Take other action in relation to denying or granting the license as the board in its discretion may deem proper. Added Stats 2000 ch 568 § 2 (AB 2888). § 489. Denial of application without a hearing Any agency in the department which is authorized by law to deny an application for a license upon the grounds specified in Section 480

287 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 255 or 496, may without a hearing deny an application upon any of those n- grounds, if within one year previously, and after proceedings co ducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, that agency has denied an application from the same applicant upon the same ground. § 1, as B & P C § 116. Amended Stats 1978 ch 1161 § 2. R e- Added Stats 1955 ch 1151 numbered by Stats 1989 ch 1104 § 1. Amended Stats 1997 ch 758 § 2.5 (SB 1346). Chapter 3 Suspension and Revocation of Licenses Grounds for suspension or r § 490. evocation; Discipline for substantially related crimes; Conviction; Legislative findings (a) In addition to any other action that a board is permitted to take against a licensee, a board may suspend or revoke a license on the ground that the licensee has b een convicted of a crime, if the crime is substantially related to the qualifications, functions, or duties of the business or profession for which the license was issued. r- (b) Notwithstanding any other provision of law, a board may exe o discipline a licensee for conviction of a crime cise any authority t that is independent of the authority granted under subdivision (a) c- only if the crime is substantially related to the qualifications, fun tions, or duties of the business or profession for which the licensee ’s license was issued. (c) A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. An action that a board is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an n- order granting probation is made suspending the imposition of se tence, irrespective of a subsequent order under Section 1203.4 of the Penal Code. (d) The Legislature hereby finds and declares that the application of this section has been made unclear by the holding in Petropoulos v. Department of Real Estate (2006) 142 Cal.App.4th 554, and that the holding in that case has placed a significant number of statutes and regulations in question, resulting in potential harm to the consumers of California from licensees who have been convicted of crimes. Ther e- fore, the Legislature finds and declares that this section establishes an independent basis for a board to impose discipline upon a licensee, and that the amendments to this section made by Chapter 33 of the

288 256 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS Statutes of 2008 do not constitute a change to, but rather are declar a- tory of, existing law. Added Stats 1974 ch 1321 § 3; Stats 1980 ch 548 § 1; § 13. Amended Stats 1979 ch 876 § 2 (SB 797) (ch 33 prevails), effe c- Stats 1992 ch 1289 § 7 (AB 2743); Stats 2008 ch 33 tive June 23, 2008, ch 179 § 3 (SB 1498), effective January 1, 2009; Stats 2010 ch 328 § 2 (SB 1330), effective January 1, 2011. § 490.5. Suspension of license for failure to comply with child support order A board may suspend a license pursuant to Section 17520 of the Family Code if a licensee is not in compliance with a child support order or judgment. § 1 ( Added Stats 1994 ch 906 AB 923), operative January 1, 1996. Amended Stats 2010 ch 328 § 3 (SB 1330), effective January 1, 2011. § 491. Procedure upon suspension or revocation Upon suspension or revocation of a license by a board on one or n 490, the board shall: more of the grounds specified in Sectio (a) Send a copy of the provisions of Section 11522 of the Gover n- ment Code to the ex -licensee. (b) Send a copy of the criteria relating to rehabilitation formulated under Section 482 to the ex -licensee. Added Stats 1972 ch 903 § 1. A 14; Stats 1975 ch 678 § 1. mended Stats 1974 ch 1321 § Evidentiary effect of record of conviction of crime § 493. substantially related to licensee’s qualifications, functions, and duties Notwithstanding any other provision of law, in a proceeding co n- ted by a board within the department pursuant to law to deny an duc application for a license or to suspend or revoke a license or otherwise take disciplinary action against a person who holds a license, upon the ground that the applicant or the licensee has b een convicted of a crime substantially related to the qualifications, functions, and duties of the licensee in question, the record of conviction of the crime shall be conclusive evidence of the fact that the conviction occurred, but only of that fact, and the board may inquire into the circumstances surrounding the commission of the crime in order to fix the degree of discipline or to determine if the conviction is substantially related to sti on. the qualifications, functions, and duties of the licensee in que As used in this section, “ license ” includes “certificate, ” “permit, ” “authority, ” and “registration. ” Added Stats 1961 ch 934 § 1, as B & P C § 117. Amended Stats 1978 ch 1161 § 3. R e- numbered by Stats 1989 ch 1104 § 1.3.

289 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 257 § 494. Interim suspension or restriction order (a) A board or an administrative law judge sitting alone, as provid- s- ed in subdivision (h), may, upon petition, issue an interim order su pending any licentiate or imposing license restrictions, including, but not limited to, mandatory biological fluid testing, supervision, or r e- medial training. The petition shall include affidavits that demo n- strate, to the satisfaction of the board, both of the following: (1) The licentiate has engaged in acts or omissions constituting a violation of this c ode or has been convicted of a crime substantially related to the licensed activity. (2) Permitting the licentiate to continue to engage in the licensed activity, or permitting the licentiate to continue in the licensed activ i- endanger the public health, safety, or ty without restrictions, would welfare. (b) No interim order provided for in this section shall be issued without notice to the licentiate unless it appears from the petition and supporting documents that serious injury would result to the public before the matter could be heard on notice. (c) Except as provided in subdivision (b), the licentiate shall be gi v- en at least 15 days ’ notice of the hearing on the petition for an i nterim order. The notice shall include documents submitted to the board in support of the petition. If the order was initially issued wit hout notice as provided in subdivision (b), the licentiate shall be entitled to a hearing on the petition within 20 days of the issuance of the interim be given notice of the hea r- order without notice. The licentiate shall ing within two days after issuance of the initial interim o rder, and shall receive all documents in support of the petition. The failure of the board to provide a hearing within 20 days following the issuance r without notice, unless the licentiate waives his or of the interim orde her right to the hearing, shall result in the dissolution of the interim order by operation of law. (d) At the hearing on the petition for an interim order, the licentiate may: (1) Be represented by cou nsel. (2) Have a record made of the proceedings, copies of which shall be d- available to the licentiate upon payment of costs computed in accor ance with the provisions for transcript costs for judicial review co n- tained in Section 11523 of the Government Cod e. (3) Present affidavits and other documentary evidence. (4) Present oral argument. (e) The board, or an administrative law judge sitting alone as pr o- vided in subdivision (h), shall issue a decision on the petition for i n- terim order within five business d ays following submission of the matter. The standard of proof required to obtain an interim order pursuant to this section shall be a preponderance of the evidence

290 258 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS standard. If the interim order was previously issued without notice, the board shall determine whether the order shall remain in effect, be dissolved, or modified. (f) The board shall file an accusation within 15 days of the issuance of an interim order. In the case of an interim order issued without notice, the time shall run from the date of th e order issued after the noticed hearing. If the licentiate files a Notice of Defense, the hearing ’s receipt of the Notice of shall be held within 30 days of the agency Defense. A decision shall be rendered on the accusation no later than 30 days after submission of the matter. Failure to comply with any of the requirements in this subdivision shall dissolve the interim order by operation of law. (g) Interim orders shall be subject to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure and shall be heard only in the superior court in and for the Counties of Sacramento, San Francisco, Los Angeles, or San Diego. The review of an interim order shall be limited to a determination of whether the board abused its the interim order. Abuse of discretion is discretion in the issuance of established if the respondent board has not proceeded in the manner required by law, or if the court determines that the interim order is not supported by substantial evidence in light of the whole record. (h) The board may, in its sole discretion, delegate the hearing on any petition for an interim order to an administrative law judge in the Office of Administrative Hearings. If the board hears the noticed petition itself, an administrative law judge shall preside r- at the hea ing, rule on the admission and exclusion of evidence, and advise the board on matters of law. The board shall exercise all other powers relating to the conduct of the hearing but may delegate any or all of them to the administrative law judge. When the petition has been delegated to an administrative law judge, he or she shall sit alone and exercise all of the powers of the board relating to the conduct of the hearing. A decision issued by an administrative law judge sitting when it is filed with the board. If the administr a- alone shall be final tive law judge issues an interim order without notice, he or she shall preside at the noticed hearing, unless unavailable, in which case a n- other administrative law judge may hear the matter. The decision o f the administrative law judge sitting alone on the petition for an inte r- im order is final, subject only to judicial review in accordance with subdivision (g). (i) Failure to comply with an interim order issued pursuant to su b- division (a) or (b) shall cons titute a separate cause for disciplinary action against any licentiate, and may be heard at, and as a part of, the noticed hearing provided for in subdivision (f). Allegations of no n- compliance with the interim order may be filed at any time prior to the re ndering of a decision on the accusation. Violation of the interim order is established upon proof that the licentiate was on notice of the

291 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 259 interim order and its terms, and that the order was in effect at the time of the violation. The finding of a violatio n of an interim order made at the hearing on the accusation shall be reviewed as a part of any review of a final decision of the agency. If the interim order issued by the agency provides for anything less than a complete suspension of the licentiate from his or her business or profession, and the licentiate violates the interim order prior to the hearing on the accusation provided for in subdivision (f), the agency may, upon notice to the licentiate and proof of violation, modify or expand the interim orde r. n- (j) A plea or verdict of guilty or a conviction after a plea of nolo co tendere is deemed to be a conviction within the meaning of this se c- tion. A certified record of the conviction shall be conclusive evidence of the fact that the conviction occurred. A board may take action u n- der this section notwithstanding the fact that an appeal of the convi c- tion may be taken. (k) The interim orders provided for by this section shall be in addi- tion to, and not a limitation on, the authority to seek injunctive relief provided in any other provision of law. ( l ) In the case of a board, a petition for an interim order may be filed by the executive officer. In the case of a bureau or program, a petition may be filed by the chief or program administrator, as the case may be. “Board, ” as used in this section, shall include any agency de- (m) scribed in Section 22, and any allied health agency within the juris- diction of the Medical Board of California. Board shall also include e State Board of the Osteopathic Medical Board of California and th Chiropractic Examiners. The provisions of this section shall not be applicable to the Medical Board of California, the Board of Podiatric Medicine, or the State Athletic Commission. Added Stats 1993 ch 840 § 1 (SB 842). Amended Stats 1994 ch 1275 § 4 (SB 2101). § 494.5. Agency actions when licensee is on certified list; Definitions; Collection and distribution of certified list information; Timing; Notices; Challenges by applicants and licensees; Release forms; Interagency agreements; Fees; Remedies; Inquiries and disclosure of information; Severability (a) (1) Except as provided in paragraphs (2), (3), and (4), a state governmental licensing entity shall refuse to issue, reactivate, rein- state, or renew a license and shall suspend a licens e if a licensee's name is included on a certified list. (2) The Department of Motor Vehicles shall suspend a license if a li- censee's name is included on a certified list. Any reference in this se c-

292 260 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS tion to the issuance, reactivation, reinstatement, renewal, or denial of a license shall not apply to the Department of Motor Vehicles. (3) The State Bar of California may recommend to refuse to issue, s- reactivate, reinstate, or renew a license and may recommend to su pend a license if a licensee's name is included on a certified list. The word “may” shall be substituted for the word “shall” relating to the issuance of a temporary license, refusal to issue, reactivate, reinstate, renew, or suspend a license in this section for licenses under the j u- risdiction of the C alifornia Supreme Court. s- (4) The Department of Alcoholic Beverage Control may refuse to i i- sue, reactivate, reinstate, or renew a license, and may suspend a l cense, if a licensee's name is included on a certified list. (b) For purposes of this section: (1) “Certified list” means either the list provided by the State Board of Equalization or the list provided by the Franchise Tax Board of persons whose names appear on the lists of the 500 largest tax deli n- quencies pursuant to Section 7063 or 19195 of the Rev enue and Tax a- tion Code, as applicable. (2) “License” includes a certificate, registration, or any other a u- thorization to engage in a profession or occupation issued by a state governmental licensing entity. “License” includes a driver's license uant to Chapter 1 (commencing with Section 12500) of issued purs a- Division 6 of the Vehicle Code. “License” excludes a vehicle registr tion issued pursuant to Division 3 (commencing with Section 4000) of the Vehicle Code. (3) “Licensee” means an individual authorized by a license to drive a motor vehicle or authorized by a license, certificate, registration, or other authorization to engage in a profession or occupation issued by a state governmental licensing entity. (4) “State governmental licensing entity” means any entity listed in Section 101, 1000, or 19420, the office of the Attorney General, the Department of Insurance, the Department of Motor Vehicles, the State Bar of California, the Department of Real Estate, and any other state agency, board, or commission th at issues a license, certificate, or registration authorizing an individual to engage in a profession or occupation, including any certificate, business or occupational license, or permit or license issued by the Department of Motor Vehicles or the Departm ent of the California Highway Patrol. “State governme n- tal licensing entity” shall not include the Contractors' State License Board. (c) The State Board of Equalization and the Franchise Tax Board shall each submit its respective certified list to every sta te gover n- mental licensing entity. The certified lists shall include the name, social security number or taxpayer identification number, and the last known address of the persons identified on the certified lists.

293 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 261 (d) Notwithstanding any other law, each sta te governmental licen s- ing entity shall collect the social security number or the federal tax- payer identification number from all applicants for the purposes of matching the names of the certified lists provided by the State Board anchise Tax Board to applicants and lice n- of Equalization and the Fr sees. (e) (1) Each state governmental licensing entity shall determine whether an applicant or licensee is on the most recent certified list provided by the State Board of Equalization and the Franchise Tax Board. (2) If an applicant or licensee is on either of the certified lists, the state governmental licensing entity shall immediately provide a pr e- liminary notice to the applicant or licensee of the entity's intent to suspend or withhold issuance or renewal of the i- license. The prelim nary notice shall be delivered personally or by mail to the applicant's or licensee's last known mailing address on file with the state go v- ernmental licensing entity within 30 days of receipt of the certified list. Service by mail shall be completed in accordance with Section 1013 of the Code of Civil Procedure. (A) The state governmental licensing entity shall issue a te mporary license valid for a period of 90 days to any applicant whose name is on a certified list if the applicant is otherwise eligible for a license. (B) The 90 -day time period for a temporary license shall not be e x- tended. Only one temporary license shall be issued during a re gular license term and the term of the temporary license shall coincide with the first 90 days of the regular license term. A license for the full term or the remainder of the license term may be issued or renewed only upon compliance with this section. (C) In the event that a license is suspended or an application for a license is denied pursuant to this se license or the renewal of a ction, any funds paid by the applicant or licensee shall not be refunded by the state governmental licensing entity. (f) (1) A state governmental licensing entity shall refuse to issue or shall suspend a license pursua nt to this section no sooner than 90 days and no later than 120 days of the mailing of the preliminary n o- tice described in paragraph (2) of subdivision (e), unless the state b- governmental licensing entity has received a release pursuant to su division (h). The procedures in the administrative adjudication prov i- sions of the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to the denial or suspension of, or refusal to renew, a license or the issuance of a temporary license pursuant to this section. (2) Notwithstanding any other law, if a board, bureau, or commi s- sion listed in Section 101, other than the Contractors' S tate License Board, fails to take action in accordance with this section, the D e-

294 262 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS partment of Consumer Affairs shall issue a temporary license or su s- pend or refuse to issue, reactivate, reinstate, or renew a license, as appropriate. loped by each state governmental licensing (g) Notices shall be deve entity. For an applicant or licensee on the State Board of Equaliz a- tion's certified list, the notice shall include the address and telephone number of the State Board of Equalization, and shall emphasize the sity of obtaining a release from the State Board of Equalization neces as a condition for the issuance, renewal, or continued valid status of a license or licenses. For an applicant or licensee on the Franchise Tax e the address and tel Board's certified list, the notice shall includ e- phone number of the Franchise Tax Board, and shall emphasize the necessity of obtaining a release from the Franchise Tax Board as a condition for the issuance, renewal, or continued valid status of a l i- cense or licenses. e shall inform the applicant that the state governme n- (1) The notic tal licensing entity shall issue a temporary license, as provided in subparagraph (A) of paragraph (2) of subdivision (e), for 90 calendar days if the applicant is otherwise eligible and that upon expiration of that time period, the license will be denied unless the state gover n- mental licensing entity has received a release from the State Board of Equalization or the Franchise Tax Board, whichever is applicable. (2) The notice shall inform the licensee th at any license suspended n- under this section will remain suspended until the state governme tal licensing entity receives a release along with applications and fees, if applicable, to reinstate the license. (3) The notice shall also inform the applicant or licensee that if an application is denied or a license is suspended pursuant to this se c- tion, any moneys paid by the applicant or licensee shall not be r e- funded by the state governmental licensing entity. The state gover n- mental licensing entity shall also develop a form that the applicant or licensee shall use to request a release by the State Board of Equaliz a- tion or the Franchise Tax Board. A copy of this form shall be included with every notice sent pursuant to this subdivision. (h) If the applicant or l icensee wishes to challenge the submission of his or her name on a certified list, the applicant or licensee shall make a timely written request for release to the State Board of Equa l- ization or the Franchise Tax Board, whichever is applicable. The State B oard of Equalization or the Franchise Tax Board shall imm e- diately send a release to the appropriate state governmental licensing entity and the applicant or licensee, if any of the following conditions are met: (1) The applicant or licensee has complied with the tax obligation, either by payment of the unpaid taxes or entry into an installment payment agreement, as described in Section 6832 or 19008 of the Revenue and Taxation Code, to satisfy the unpaid taxes.

295 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 263 (2) The applicant or licensee has submitted a request for release not later than 45 days after the applicant's or licensee's receipt of a pr e- liminary notice described in paragraph (2) of subdivision (e), but the State Board of Equalization or the Franchise Tax Board, whichever is applicable, will be u nable to complete the release review and send notice of its findings to the applicant or licensee and state gover n- mental licensing entity within 45 days after the State Board of Equal- ization's or the Franchise Tax Board's receipt of the applicant's or lice nsee's request for release. Whenever a release is granted under i- this paragraph, and, notwithstanding that release, the applicable l cense or licenses have been suspended erroneously, the state gover n- mental licensing entity shall reinstate the applicable licenses with retroactive effect back to the date of the erroneous suspension and that suspension shall not be reflected on any license record. (3) The applicant or licensee is unable to pay the outstanding tax obligation due to a current financial hardship. “Financial hardship” means financial hardship as determined by the State Board of Equa l- ization or the Franchise Tax Board, whichever is applicable, where the applicant or licensee is unable to pay any part of the outstanding liability and the applicant or licensee is unable to qualify for an in- stallment payment arrangement as provided for by Section 6832 or Section 19008 of the Revenue and Taxation Code. In order to esta b- lish the existence of a financial hardship, the applicant or licensee shall submit any a- information, including information related to re sonable business and personal expenses, requested by the State Board of Equalization or the Franchise Tax Board, whichever is ap- plicable, for purposes of making that determination. see is required to act with diligence in r e- (i) An applicant or licen sponding to notices from the state governmental licensing entity and the State Board of Equalization or the Franchise Tax Board with the recognition that the temporary license will lapse or the license su s- pension will go into effect after 90 days and that the State Board of Equalization or the Franchise Tax Board must have time to act wit h- in that period. An applicant's or licensee's delay in acting, without State Board good cause, which directly results in the inability of the of Equalization or the Franchise Tax Board, whichever is applicable, to complete a review of the applicant's or licensee's request for release shall not constitute the diligence required under this section which would justify the issuance of a release. An applicant or licensee shall have the burden of establishing that he or she diligently responded to notices from the state governmental licensing entity or the State Board of Equalization or the Franchise Tax Board and that any delay was not wi thout good cause. (j) The State Board of Equalization or the Franchise Tax Board shall create release forms for use pursuant to this section. When the applicant or licensee has complied with the tax obligation by payment

296 264 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS of the unpaid taxes, or entry into an installment payment agreement, or establishing the existence of a current financial hardship as d e- a- fined in paragraph (3) of subdivision (h), the State Board of Equaliz tion or the Franchise Tax Board, whichever is applicable, shall mail a release form t o the applicant or licensee and provide a release to the appropriate state governmental licensing entity. Any state gover n- mental licensing entity that has received a release from the State Board of Equalization and the Franchise Tax Board pursuant to this subdivision shall process the release within five business days of its receipt. If the State Board of Equalization or the Franchise Tax Board determines subsequent to the issuance of a release that the licensee nt agreement, the has not complied with their installment payme State Board of Equalization or the Franchise Tax Board, whichever is applicable, shall notify the state governmental licensing entity and the licensee in a format prescribed by the State Board of Equalization hichever is applicable, that the licensee or the Franchise Tax Board, w is not in compliance and the release shall be rescinded. The State Board of Equalization and the Franchise Tax Board may, when it is economically feasible for the state governmental licensing entity to develop an a utomated process for complying with this subdivision, notify the state governmental licensing entity in a manner prescribed by the State Board of Equalization or the Franchise Tax Board, whichever is applicable, that the licensee has not complied with the installment payment agreement. Upon receipt of this notice, the state governmental licensing entity shall immediately notify the licensee on a form prescribed by the state governmental licensing entity that the licensee's license will be suspended on a specific date, and this date shall be no longer than 30 days from the date the form is mailed. The licensee shall be further notified that the license will remain suspended until a new release is issued in accordance with this su b- division. of Equalization and the Franchise Tax Board (k) The State Board may enter into interagency agreements with the state governmental licensing entities necessary to implement this section. l ( ) Notwithstanding any other law, a state governmental licensing val of the appropriate department director or entity, with the appro governing body, may impose a fee on a licensee whose license has been suspended pursuant to this section. The fee shall not exceed the amount necessary for the state governmental licensing entity to cover its c osts in carrying out the provisions of this section. Fees imposed pursuant to this section shall be deposited in the fund in which other fees imposed by the state governmental licensing entity are deposited and shall be available to that entity upon approp riation in the annual Budget Act.

297 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 265 (m) The process described in subdivision (h) shall constitute the sole administrative remedy for contesting the issuance of a temporary l i- cense or the denial or suspension of a license under this section. (n) Any state gov ernmental licensing entity receiving an inquiry as to the licensed status of an applicant or licensee who has had a l i- cense denied or suspended under this section or who has been gran t- i- ed a temporary license under this section shall respond that the l cense was denied or suspended or the temporary license was issued e- only because the licensee appeared on a list of the 500 largest tax d linquencies pursuant to Section 7063 or 19195 of the Revenue and Taxation Code. Information collected pursuant to this sectio n by any state agency, board, or department shall be subject to the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of n- Title 1.8 of Part 4 of Division 3 of the Civil Code). Any state gover mental licensing entity that discloses on its Internet Web site or other publication that the licensee has had a license denied or suspended under this section or has been granted a temporary license under this section shall prominently disclose, in bold and adjacent to the info r- mation regardin g the status of the license, that the only reason the license was denied, suspended, or temporarily issued is because the licensee failed to pay taxes. (o) Any rules and regulations issued pursuant to this section by any state agency, board, or department may be adopted as emergency regulations in accordance with the rulemaking provisions of the A d- ministrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). The ons shall be deemed an emergency and ne c- adoption of these regulati essary for the immediate preservation of the public peace, health, and safety, or general welfare. The regulations shall become effective i m- mediately upon filing with the Secretary of State. (p) The State Board of Eq ualization, the Franchise Tax Board, and state governmental licensing entities, as appropriate, shall adopt regulations as necessary to implement this section. (q) (1) Neither the state governmental licensing entity, nor any o f- ficer, employee, or agent, or former officer, employee, or agent of a state governmental licensing entity, may disclose or use any info r- mation obtained from the State Board of Equalization or the Fran- chise Tax Board, pursuant to this section, except to inform the public of the denial, refusal to renew, or suspension of a license or the iss u- ance of a temporary license pursuant to this section. The release or other use of information received by a state governmental licensing entity pu rsuant to this section, except as authorized by this section, is punishable as a misdemeanor. This subdivision may not be interpre t- ed to prevent the State Bar of California from filing a request with the Supreme Court of California to suspend a member of the bar pu r- suant to this section.

298 266 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS (2) A suspension of, or refusal to renew, a license or issuance of a temporary license pursuant to this section does not constitute denial or discipline of a licensee for purposes of any reporting requirements to the National Practitioner Data Bank and shall not be reported t o the National Practitioner Data Bank or the Healthcare Integrity and Protection Data Bank. (3) Upon release from the certified list, the suspension or revocation of the applicant's or licensee's license shall be purged from the state governmental licensin g entity's Internet Web site or other publication within three business days. This paragraph shall not apply to the State Bar of California. (r) If any provision of this section or the application thereof to any person or circumstance is held invalid, that invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the pr o- visions of this section are severable. tion to an applicant shall (s) All rights to review afforded by this sec also be afforded to a licensee. (t) Unless otherwise provided in this section, the policies, practices, and procedures of a state governmental licensing entity with respect to license suspensions under this section shall be the s ame as those applicable with respect to suspensions pursuant to Section 17520 of the Family Code. (u) No provision of this section shall be interpreted to allow a court to review and prevent the collection of taxes prior to the payment of olation of the California Constitution. those taxes in vi (v) This section shall apply to any licensee whose name appears on a list of the 500 largest tax delinquencies pursuant to Section 7063 or 19195 of the Revenue and Taxation Code on or after July 1, 2012. Added Stats 2011 ch 455 § 3 (AB 1424), effective January 1, 2012. Amended Stats 2012 ch 327 § 1 (SB 937), effective January 1, 2013. § 494.6 . Suspension under Labor Code Section 244 (a) A business license regulated by this code may be subject to su s- pension or revoca a- tion if the licensee has been determined by the L bor Commissioner or the court to have violated subdivision (b) of Sec- tion 244 of the Labor Code and the court or Labor Commi ssioner has taken into consideration any harm such suspension or revocation would cause to employees of the licensee, as well as the good faith efforts of the licensee to resolve any alleged violations after receiving notice. (b) Notwithstanding subdivision (a), a licensee of an agency within the Department of Consumer Affairs who has b een found by the L a- bor Commissioner or the court to have violated subdivision (b) of Sec-

299 CHAPTER 11. LAWS GOVERNING DEPARTMENT OF CONSUMER AFFAIRS 267 tion 244 of the Labor Code may be subject to disciplinary action by his or her respective licensing agency. n- tion u (c) An employer shall not be subject to suspension or revoca der this section for requiring a prospective or current employee to submit, within three business days of the first day of work for pay, an I-9 Employment Eligibility Verification form. 1 (SB 666), effective January 1, 2014 . Added Stats 2013 ch 577 § Chapter 4 Public Reprovals § 495. Public reproval of licentiate or certificate holder for act constituting grounds for suspension or revocation of license or certificate; Proceedings Notwithstanding any other provision of law, any entity authorized to issue a license or certificate pursuant to this code may publicly r e- prove a licentiate or certificate holder thereof, for any act that would constitute grounds to suspend or revoke a license or certificate. Any proceedings for public reproval, public rep roval and suspension, or public reproval and revocation shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of i- Title 2 of the Government Code, or, in the case of a licensee or certif cate holder under the jurisdiction of the State Department of Health Services, in accordance with Section 100171 of the Health and Safety Code. Added Stats 1977 ch 886 § 1. Amended Stats 1997 ch 220 § 2 (SB 68), effective August 4, 1997. Chapter 5 Examination Security § 496. Grounds for denial, suspension, or revocation of license A board may deny, suspend, revoke, or otherwise restrict a license on the ground that an applicant or licensee has violated Section 123 pertaining to subversion of licensing examinations. Added St ats 1989 ch 1022 § 3.

300 268 SECTION V. THE DEPARTMENT OF CONSUMER AF FAIRS § 498. Fraud, deceit or misrepresentation as grounds for action against license A board may revoke, suspend, or otherwise restrict a license on the w- ground that the licensee secured the license by fraud, deceit, or kno ing misreprese ntation of a material fact or by knowingly omitting to state a material fact. Added Stats 1992 ch 1289 § 8 (AB 2743). § 499. Action against license based on licentiate’s actions regarding application of another A board may revoke, suspend, or otherwise r estrict a license on the ground that the licensee, in support of another person ’s application for license, knowingly made a false statement of a material fact or knowingly omitted to state a material fact to the board regarding the application. Added Stats 1992 ch 1289 § 9 (AB 2743).

301 SECTION VI. E THE CONTRACTORS STAT SE LAW, LICENSE BOARD; LICEN RULES AND REGULATIONS, AND RELATED LAWS Chapter 12. Contractors License Law 13. Contractors State License Board Rules and Regulations Chapter 12. Contractors ’ State Licens e Law BUSINESS & PROF ESSIONS CODE DIVISION 3 PROFESSIONS AND VOCATIONS GENE RALLY Chapter 9 Contractors Article 1 Administration § 7000. Citation of chapter § 7000.2 Requiring contractors to show proof of compliance with local business tax . requirements prior to permit iss uance; Limit on business taxes § 7000.5. Contractors ’ State License Board; Members; Effect of repeal (Repealed January 1, 2020) § 7000.6 . Priority of board; Protection of the public § 7001. Members of board; Qualifications; Public member Board § 7002. members; Kinds of contractors and qualifications; Definitions § 7003. Terms, vacancies, and appointment of successors § 7005. Removal of members; Grounds § 7006. Meetings of board; Regular and special § 7007. Quorum; Notice of meetings Appoint ment of committees; Making of rules and regulations § 7008. 269

302 270 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7009. Administration of oaths and taking of proofs Functions and duties of board § 7010. Registrar of contractors (Repealed January 1, 2020) § 7011. § 7011.3 . Prohibition against double penalty for same offense ’ compensation Enforcements of licensing provisions and workers § 7011.4 . Investigators as peace officers § 7011.5 . . Reviewing and investigating complaints § 7011.7 False complaints against contractors; Penalties . § 7011.8 Cooperat ion in enforcement of legislation relating to construction i ndu s- § 7012. try; Assistants § 7013. Review of registrar ’s acts or decisions by board; Application of section . § 7013.5 Transcript of witness as evidence § 7014. Equipment and records; Procurement . § 7015 Seal of board Per diem and expenses of members of board § 7016. Report on complaints and case aging statistics § 7017.3 . Contractor license search by ZIP Code or geographic location . § 7018 Contract with licensed professionals for site inve § 7019. stigation of consumer complaints . § 7019.1 [Section repealed 2001.] § 7020. Computerized enforcement tracking system for consumer complaints § 7021 Interagency agreement for information to protect the public . Article 2 Application of Chapter § 7025. “Members of the personnel of record ”; “Person ”; “Qualifying person ”; “Qualifying individual ”; “Qualifier ” ”; “Roadway ” § 7026. “Contractor “Contractor . § 7026.1 ” Definitions § 7026.2 . . rpet § 7026.3 Persons who install or contract for the installation of ca § 7026.11. Permissible scope of work for the General Manufactured Housing Co n- -47) license classification tractor (C § 7026.12. Installations of fire protection systems . § 7026.13 [Section repealed 2017.] Advertising as contractor § 7027. § 7027.1 Ad vertising by unlicensed person; Penalties . § 7027.2 . Advertising by person not licensed § 7027.3 . Penalties for fraudulent use of incorrect license number § 7027.4 . Advertising as insured or bonded; Requirements; Cause for discipline . for landscape contractor to design systems or facilities; Prime § 7027.5 Authority contract for pool, spa, hot tub, outdoor cooking center, outdoor fireplace, or rainwater capture system; Subcontracting work outside of the field and scope of activities § 7028. Engaging in business without license; Fine and punishment; Statute of limita tions § 7028.1 . Penalties against uncertified contractors performing asbestos -related work § 7028.2 . Complaints; Disposition of penalties § 7028.3 . Injunction against violations . Injunction against continuing violation by person not holding state § 7028.4 contra ctor ’s license § 7028.5. Specified individuals acting as contractor without license § 7028.6. Authority to issue citations § 7028.7. Issuance of citation

303 CHAPTER 12. CONTRACT ORS LICENSE LAW 271 § 7028.8 . Service of citation Limitations period § 7028.9. § 7028.10 . Appeal to registrar . Citation as final order § 7028.11 § 7028.12 . Hearing; Decision Application for court order; Collection of civil penalty; Assignment of . § 7028.13 rights to civil penalty; Time limit for collection of penalty Waiver of part of civil penalty on issuance of license . § 7028.14 License required to submit bid to public agency; Exceptions . § 7028.15 § 7028.16 . Punishment for engaging in business without license with respect to ed by natural disaster for which state of emergency has stru ctures damag clared been de § 7028.17 . Failure of unlicensed person to comply with citation; Distribution of fines Issuance and suspension of joint venture license § 7029. § 7029.1 Unlawfully acting in joint ven ture without license . . Display of name, business address and business license number on § 7029.5 icles commercial veh Display of business name and contractors ’ license number . § 7029.6 Licensee ’s statement on contracts; Notice requirements; Excep tions § 7030. . Disclosure § 7030.1 § 7030.5 . Inclusion of license number in contracts, bids, and advertising Allegation and proof of license in action on contract; Recovery of compe n- § 7031. sation paid to unlicensed contractor; Substantial compliance; Exception s . Applicant ’s statement as to license required by city or county permit § 7031.5 regul ations; Penalty for violation § 7032. Construction of chapter; Complaints to registrar against licensees § 7033. Requirement of filing by licensee or applicant state ment as to license, or exemption and proof thereof § 7034. Insertion of void or unenforceable provisions in contract prohibited Article 3 Exemptions § 7040. United States, State, and subdivisions § 7041. Court officers Public utilities in th eir own business operations § 7042. . § 7042.1 Adoption fees; Deferral, waiver, or reduction § 7042.5 Application of chapter; Underground trenching operations; Cable telev i- . sion corporation defined Oil or gas drilling and operation § 7043. Property owne § 7044. r making own improvements § 7044.01 Remedies; Violations; Fees and costs § 7044.1 . Real estate licensee acting within scope of license § 7044.2 . Inapplicability of chapter § 7045. Sale or installation of products not part of structure Personal property work; Mobilehome accessory buildings or structures § 7046. Contracts aggregating less than specified amount; When exemption not § 7048. appl icable § 7049. Ditch work and agricultural or fire prevention work § 7051. Application of chapter to certain l icensees or registrants § 7052. People furnishing material or supplies § 7053. Employees § 7054. Inapplicability of chapter to licensed alarm company operators § 7054.5 . Application of licensing provisions to installation of satellite antenna systems on reside ntial structures

304 272 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Article 4 Classifications § 7055. Branches of contracting business General engineering contractor § 7056. § 7057. General building contractor “Specialty contractor ” § 7058. [Section repealed 2002.] . § 7058.1 Certi -related work fication of contractors performing asbestos § 7058.5. Registration with Division of Occupational Safety and Health as cond ition § 7058.6 . of asbestos certification; Certification examination; Proof of current regi stration . Hazardous substan ce certification examination § 7058.7 § 7058.8 Information to public regarding removal or encapsulation of asbestos - . ials containing mater § 7059. Rules and regulations affecting classification of contractors; Contracts contracts invol ving two or more crafts; Public works Misleading or incompatible use of name styles § 7059.1 . Article 5 Licensing § 7065. Investigation, classification, and examinations . § 7065.01 Examination not required for limited specialty license classification . Review and revisio n of examination contents § 7065.05 Waiver of examination § 7065.1. § 7065.2 . Waiver of examination § 7065.3 . Additional classification without examination under specified conditions § 7065.4 . Reciprocity Minor not to be licensed unless guardian appoi § 7065.5. nted Application; Form and contents; Fee § 7066. Blank forms § 7066.5 . . [Section repealed 2016.] § 7067.5 . Application form; Signatures required § 7067.6 § 7068. Qualifications ualifying § 7068.1. Duty of individual qualifying on behalf of another; Acting as q individual for additional person or firm; Violation as cause for disciplinary action and misdemeanor Disassociation of responsible managing officer; Notice; Replacement; § 7068.2. ition of licensee; Failure to notify registrar Pet § 7068.5 . Tak ing qualifying examination on behalf of applicant for contractor ’s license; Misd emeanor § 7068.7 . Obtaining examination for another; Misdemeanor Grounds for denial of license; Fingerprints of applicants; Criminal history § 7069. nformation and subsequent arrest i § 7069.1 Arrest of licensee or home improvement salesperson . § 7070. Showing that no license was refused or revoked § 7071. Refusal to corporation, partnership, or limited liability company for me m- ber ’s lack of qualifications § 7071.3 . Entry into armed forces by licensee; Designation of manager to act for such entrant; R enewal fee and duration of license § 7071.5. Contractor ’s bond § 7071.6 . Bond as condition precedent to license § 7071.6.5. Surety bond as condition precedent to license

305 CHAPTER 12. CONTRACT ORS LICENSE LAW 273 § 7071.7. i- Acceptance of bond as of effective date; Retroactive reinstatement of l cense § 7071.8. Bond required for restoration of suspended or revoked license Requirement of qualifying individual § 7071.9. ’s bond as condition precedent to license Qualifying individual ’s bond § 7071.10. Aggregate liability of surety on claim for wages and benefits; Renewal of § 7071.11. license contingent on satisfaction of claims and debts; Limitations periods; ot to be Notice of payment; Protest of settlement; Accord; Legal fees n charged Deposit in lieu of bond; When released; Limitations periods; Filing of § 7071.12 . claims for no npayment of wages or benefits § 7071.13 . Reference to bond in advertising, soliciting, or other presentments as nsion of license ground for suspe § 7071.14 Prohibited discrimination in denying license bond; Liability for da mages . . Revocation or suspension of license for failure to maintain bond § 7071.15 Bond required where applicant or licensee has unsatisfied final judgment § 7071.17. for failure to pay contractor, subcontractor, consumer, materials supplier, n- or employee; Notice of unsatisfied final judgments; Suspension for no compliance; Reinstatement; Disqualification from serving as personnel of record for other licensee; Disciplinary action . Report to registrar of convictions; Study of judgments, arbitration awards, § 7071.18 settlements for construction defects in rental residential units; Contents of study § 7071.19. Insurance as condition precedent to license; Aggregate limit of liability; Compliance with financial security requirements; Duties of registrar § 7072. Issuance of license § 7072.5. Issuance of pocket card § 7073. Grounds and procedures for denial of application; Rehabilitation and reapplication; Prob ationary license in lieu of denial § 7074. When application becomes void; Disposition of application; Fee for ation reapplic Display of license § 7075. Nontransferability of license § 7075.1. § 7076. Events resulting in cancellation of license; Continuance of license § 7076.1 Voluntary surrender of license . Suspension for failure to be registered and in good standing after notice; § 7076.2. Personal liability § 7076.5 . Inactive license certificate; Reinstatement; Holder not entitled to pra ctice § 7077. Original license prob ationary; Revocation Article 6 Records § 7080.5 . Public posting following acceptance of application § 7081. List of contractors § 7082. Publication and distribution of information of industry § 7083. Notification by licensees of changes in recorded i nformation § 7083.1 . Notification of registrar of change of address of licensee whose license is expired, suspended, or cancelled § 7084. Rules and regulations to carry out article

306 274 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Article 6.2 Arbitration Referral to arbitration; Conditions § 7085. ’s award deemed award of registrar Arbitrator § 7085.2 . § 7085.3 . Notice; Consequences of election; Right to retain counsel; Agreement to trate arbi Referral of agreement to arbitrate to arbitrator or arbitration associ ation; § 7085.4 . Notification of comp lainant and licensee Rules of conduct for arbitrations; court procedure and exclusion of liabi § 7085.5 . lity Failure to comply with award as grounds for automatic suspension; § 7085.6. Appeal; Reinstatement; Delay in revocation for good cause; Dissociation icensee from other l § 7085.7 . Enforcement of award . § 7085.9 Disclosure to public of complaint referred to arbitration Article 7 Disciplinary Proceedings Investigation, suspension, revocation; Construction without permit as § 7090. violation; Burd en of proof § 7090.1. Automatic suspension of license for failure to pay civil penalty or comply with order of correction; Contest of determination; Reinstatement; Delay in rev ocation for good cause; Dissociation from other licensee . Effect of c orrection of condition caused by fraudulent act § 7090.5 § 7091. Filing complaints and disciplinary actions Decision of registrar § 7095. § 7096. ” “Licensee § 7097. Suspension of additional license issued following suspension of any license § 7098. Revocation of additional license issued following revocation of license § 7099. Citation . Regulations for order of correction § 7099.1 Regulations for assessment of civil penalties; Factors; Maximum amount; § 7099.2. Letter of admonishment Appeal to reg istrar § 7099.3 . . Time to contest citation § 7099.4 . Hearing § 7099.5 . § 7099.6 Failure to comply with citation as ground for denial, suspension, or icense revocation of l § 7099.7 . Bond exempt from payment of civil penalty . § 7099.10 ction of telephone service Citation; Hearing; Disconne § 7099.11 . Advertising to promote services for asbestos removal; Notice to comply; Cit ation § 7100. Continuance of business pending review § 7102. Reinstatement or reissuance of license Effect of disciplinary action by another state § 7103. § 7104. Notice to complainant of resolution of complaint § 7106. Revocation or suspension of license incident to court action § 7106.5 . Effect of expiration, cancellation, forfeiture, revocation, or suspension of license on jurisdiction o f registrar § 7107. Abandonment of contract § 7108. Diversion or misapplication of funds or property § 7108.5. Failure to pay subcontractor § 7108.6 . Failure to pay transportation charges submitted by dump truck carrier

307 CHAPTER 12. CONTRACT ORS LICENSE LAW 275 § 7109. Departure from accepted trade standards; Departure from plans or specific ations § 7109.5 Violation of safety provisions . Disregard or violation of statutes § 7110. § 7110.1 . Requiring or causing execution of release Initiation of action against contractor after re ceipt of Labor Commissio n- § 7110.5 . er ’s finding of willful violation of Labor Code Failure to make and keep records for inspection; Disciplinary action § 7111. Failure to respond to request to cooperate in investigation of complaint . § 7111.1 Omission or misrepresentation of material fact by applicant § 7112. . Expungement of classification due to omission or misrepresentation § 7112.1 Failure to complete project for contract price § 7113. § 7113.5 . t Avoidance or settlement of obligations for less than full amoun § 7114. Aiding, abetting, or conspiring with unlicensed person to evade law False certification of qualifications § 7114.1. § 7114. 2. Administrative remedies authorized for misuse of contractor’s license § 7115. r, rules, or regulations Material failure to comply with chapte Wilful or fraudulent act injuring another § 7116. . § 7116.5 Causes for discipline § 7117. Acting as contractor under unlicensed name or personnel . § 7117.5 Acting as contractor under inactive or suspended license . Act ing as contractor in unauthorized classification § 7117.6 § 7118. Entering into contract with unlicensed contractor § 7118.4 . Asbestos inspections; Disclosure requirements § 7118.5 . Sanctions against contractor hiring uncertified person to perform asbe s- tos -relat ed work . Sanctions for contracting with uncertified person to perform removal or § 7118.6 ction remedial a Failure to prosecute work diligently § 7119. Failure to pay for materials or services; False denial of liability § 7120. Participation in certain acts as disqualification from employment, election § 7121. or association by licensee; Disciplinary action § 7121.1. o- Responsibility of disassociated partner, officer, director, manager, or ass ciate for compliance with citation cipation by qualifying individual in acts for which license § 7121.5. Effect of parti suspended, r evoked, or not renewed Restricted activities for specified individuals § 7121.6. § 7121.65. Notification of license revocation required § 7121.7. Employment of individuals with revo ked licenses § 7121.8. “Bona fide nonsupervising employee ” § 7122. When act or omission of individual or business entity constitutes cause for disciplinary action against licensee Responsibility of disassociated qualifying individual for compl iance with § 7122.1. citation; Applicability of § 7122.5 § 7122.2. Responsibility for compliance with arbitration award following disassoci ation § 7122.5. Immateriality of licensee ’s knowledge or participation § 7123. Criminal conviction as cause for discipline § 7123.5 Disciplinary action for violation of overpricing following emergency or . major disaster § 7124. What constitutes conviction; When license may be ordered suspended or revoked, or iss uance refused § 7124.5 . [Section repealed 2004.] § 7124.6 . Public access to complaints against licensees; Disclaimer; Limitations of disclosure

308 276 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Article 7.5 ’ Compensation Insurance Reports Workers Reports to registrar; Exemptions § 7125. Time limit for acceptance of certificate . § 7125.1 . Suspension of license for failure to maintain workers ’ compensation § 7125.2 insu rance Periods of licensure . § 7125.3 Causes for disciplinary action; Misdemeanor . § 7125.4 § 7125.5. Renewal of license; Exemption for workers’ compensation insurance; Recertification; Retroac tive renewal Violation of article; Misdemeanor § 7126. § 7127. Stop order; Failure to observe; Protest Article 8 Revenue Disposition of fees and penalties; Appropriation § 7135. Funds to enforce unlicensed activity provisions § 7135.1 . Perce ntage to be transferred to Consumer Affairs Fund § 7136. § 7137. Fee schedule § 7137.5 Transfer of funds for use of Uniform Construction Cost Accounting . commendation; Reimbursement Commission; Re Earned fee; Nonrefundability when application is filed § 7138. § 7138.1 . Reserve fund level Article 8.5 The Construction Management Education Sponsorship Act of 1991 § 7139. Title of article Legislative findings and declarations . § 7139.1 Creation of account § 7139.2 . . § 7139.3 Grant awards § 7139.4 . Postsecondary programs; Qualifications . § 7139.5 Amounts of grants § 7139.6 Purposes for which grants may be used . . § 7139.7 [Section repealed 2013.] . Report by president of institution receiving grant § 7139.8 § 7139.9 Allocation for administration . § 7139.10 . Intent of Legislature Article 9 Renewal of Licenses Expiration of licenses; Renewal of unexpired licenses § 7140. § 7141. Time for renewal; Effect; Failure to renew § 7141.5 . Retroactive issuance of license after failure to renew § 7143. Renewal of suspended license § 7143.5 Application for new license by person prohibited from renewing . § 7144. Reinstatement of revoked license § 7145. Incompleteness of application as grounds for refusal to renew license; Aba ndonment of application; Petition § 7145.5 . Failure to resolve outstanding liabilities as grounds for refusal to renew license

309 CHAPTER 12. CONTRACT ORS LICENSE LAW 277 Article 10 Home Improvement Business ” § 7150. “Person ” “Home improvement contractor § 7150.1 . . § 7150.2 [Section repealed 2004.] .] [Section repealed 2004 § 7150.3 . “Home improvement ”; “Home improvement goods or services ” § 7151. “Home improvement contract . § 7151.2 ” ” § 7152. “Home improvement salesperson Selling without registration § 7153. Salesperson ’s application for registration; Grounds for den ial; Finge r- § 7153.1 . prints of applicants; Criminal history and subsequent arrest information . Expiration of registrations § 7153.2 § 7153.3 Renewal of registration; Delinquent renewal penalty; Abandonment of . application; Petition Notification of employm ent of registered salesperson; Notification when § 7154. registered salesperson ceases employment; Discipline for failure to report y- regarding employment of registered salesperson; Discipline for emplo ment of unregistered salesperson Discipline of salesma § 7155. n . Discipline of contractor for salesperson ’s violations § 7155.5 § 7156. Misdemeanors; Grounds for discipline § 7156.6 Electronic transmission of applications, renewals, and notices . Prohibited inducements § 7157. § 7158. s False completion certificate § 7159. Requirements for home improvement contracts § 7159.1. Notice in sale of home improvement goods or services § 7159.2 . Security interest for home improvement goods or services Contract amount; Finance charges; Down payment; Violations § 7159.5. ; Restitu- tion and punishment § 7159.6 Work or change order . Requirements for home improvement contracts, exemption for fire alarm § 7159.9. system § 7159.10. Service and repair contract defined . Discipline for violation § 7159.11 § 7159.14. rements; Statement of agreed amount; Payment due; Further requi Punishment for violations; Restitution Penalty for fraudulent misrepresentation § 7160. § 7161. Specification of prohibited acts; Misdemeanor § 7162. Contents of contract; Representations as to goods an d materials § 7163. Enforceability of contract prior to buyer obtaining loan § 7164. Contract and changes to be in writing; Requirements Conditions under which swimming pool contract financed by third -party § 7165. eable lender is enforc Applica tion of article to contracts for construction of specfied swimming § 7166. pools § 7167. Certain contracts for construction of swimming pool void; Recovery for work performed § 7168. Reasonable attorney ’s fees § 7169 . Development and availability of “solar ener gy system disclosure doc u- ment” § 7170. Complaints regarding solar energy systems companies and solar contra c- tors

310 278 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Article 11 Asbestos Consultants Requirement of certification § 7180. contracts . § 7180.5 Requirement of certification for building owner or operator “Asbestos consultant § 7181. ” “Site surveillance technician ” § 7182. Notice of complete application; Issuance of certificate; Provisional certif i- § 7183. cation card . Enforcement by division § 7183.5 § 7184. Requirements for qualification as certified asbestos consultant Requirements for qualification as certified site surveillance technician § 7185. § 7186. [No section of this number.] Financial conflict of interest; Legislative intent § 7187. § 7188. [No section of this number.] § 7189. Penalties for violation Article 12 Prohibitions § 7189.5 . Application of article . Construction of article § 7189.7 Use of name or position of public official in advertisement or promotional § 7190. material; Di sclaimer Title of provision f § 7191. i- or arbitration of disputes in contract for work on spec fied residential property Chapter 9.3 Home Inspectors § 7195. Definitions § 7196. Duties § 7196.1 . Application Unfair practices § 7197. § 7198. Public policy § 7199. Statute of limitation pter 9.4 Cha Home Energy Rating System (HERS) Home Inspections § 7199.5. HERS California home energy audit § 7199.7. Legislative intent

311 CHAPTER 12. CONTRACT ORS LICENSE LAW 279 Chapter 9 Contractors Article 1 Administration § 7000. Citation of chapter ’ as, the Contractors This chapter constitutes, and may be cited State License Law. § 2. Amended Stats 1984 ch 193 § 1. Added Stats 1961 ch 1822 § 7000.2. Requiring contractors to show proof of compl iance ssuance; with local business tax requirements prior to permit i Limit on business taxes Nothi ng in this code shall be interpreted to prohibit cities, counties, and cities and counties from requiring contractors to show proof that they are in compliance with local business tax requirements of the entity prior to issuing any city, county, or city an d county permit. Nothing in this code shall be interpreted to prohibit cities, counties, and cities and counties from denying the issuance of a permit to a licensed contractor who is not in compliance with local business tax requirements. Any business tax required or collected as part of this process shall not exceed the amount of the license tax or license fee authorized by Section 37101 of the Government Code or Section 16000 of the Bus i- ness and Professions Code. § 1 (AB 2710). Added Stats 1992 ch 325 § 7000.5. Contractors ’ State License Board; Members; Effect of repeal (Repealed January 1, 2020) There is in the Department of Consumer Affairs a Contractors ’ (a) State License Board, which consists of 15 members. (b) Notwithstanding any other provision of law, the repeal of this section renders the board subject to review by the appropriate policy committees of the Legislature. (c) This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute , that is enacted before January 1, 2020, deletes or extends that date. Added Stats 1939 ch 37 § 1, as B & P C § 7000. Amended Stats 1961 ch 1821 § 61. Amended and renumbered by Stats 1961 ch 1822 § 3. Amended Stats 1963 ch 1098 § 1; Stats 1971 ch 716 § 98; Stats 1972 ch 1314 § 1; Stats 1975 ch 1153 § 1; Stats 1982 ch 676 § 40; Stats 1994 ch 908 § 48 (SB 2036); Stats 1997 ch 812 § 1 (SB 857), ch 813 § 1 (SB 825); Stats 1999 ch 656 § 5 (SB 1306); Stats 2000 ch 1005 § 1 (SB 2029); Stats 2002

312 280 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW ch 744 § 2 (SB 1953); Stats 2004 ch 33 § 24 (AB 1467), effective April 13, 2004; Stats § 105 (SB 10 (SB 232), effective January 1, 2006; Stats 2006 ch 658 2005 ch 675 § § 7 (SB 963), effective January 1, 1476), effective January 1, 2007; Stats 2008 ch 385 37 (SB 294), effective January 1, 2011, repealed January 1, 2009; Stats 2010 ch 695 § 2012; Stats 2011 ch 448 § 21 (SB 543), effective January 1, 2012, repealed January 1, 2016; Stats 2015 ch 656 § 6 (SB 467), effective January 1, 2016, repealed January 1, 2020. Priority of board; Protection of the public § 7000.6. n- Protection of the public shall be the highest priority for the Co ’ State License Board in exercising its licensing, regulatory, tractors and disciplinary functions. Whenever the protection of the public is inco nsistent with other interests sought to be promoted, the protec- tion of the public shall be paramount. § 3 (SB 1953). Added Stats 2002 ch 744 Members of board; Qualifications; Public me mber § 7001. All members of the board, except the public members, shall be co n- tractors actively engaged in the contracting business, have been so engaged for a period of not less than five years preceding the date of their appointment and shall so continue in the contracting business during the term of their office. No one, except a public member, shall be eligible for appointment who does not at the time hold an une x- pired license to operate as a contractor. The public members shall not be licentiates of the board. § 1. Amended Stats 1961 ch 1821 § 62; Stats 1971 ch 716 § 99; Added Stats 1939 ch 37 Stats 2000 ch 1005 § 2 (SB 2029). § 7002. Board members; Kinds of contractors and qualifications; Definitions (a) One member of the board shall be a general engineering co n- tractor, two members shall be general building contractors , two members shall be specialty contractors, one member shall be a me m- ber of a labor organization representing the building trades, one member shall be an active local building official, and eight members shall be public members, one of whom shall be from a statewide se n- ior citizen organization. (b) No public member shall be a current or former licensee of the board or a close family member of a licensee or be currently or for- me rly connected with the construction industry or have any financial interest in the business of a licensee of the board. Each public me m- ber shall meet all of the requirements for public membership on a board as set forth in Chapter 6 (commencing with Section 450) of D i- vision 1. Notwithstanding the provisions of this subdivision and th ose

313 CHAPTER 12. CONTRACT ORS LICENSE LAW 281 of Section 450, a representative of a labor organization shall be elig i- ble for appointment to serve as a public member of the board. (c) Each contractor member of the board shall be of recognized s and hold an standing in his or her branch of the contracting busines unexpired license to operate as a contractor. In addition, each co n- tractor member shall, as of the date of his or her appointment, be a c- tively engaged in the contracting business and have been so engaged rs. Each contractor member shall for a period of not less than five yea remain actively engaged in the contracting business during the entire term of his or her membership on the board. (d) Each member of the board shall be at least 30 years of age and of good character. In addition, each membe r shall have been a citizen e- and resident of the State of California for at least five years next pr ceding his or her appointment. (e) For the purposes of construing this article, the terms “ general ” “general building contractor, ” and “specialty engineering contractor, shall have the meanings given in Article 4 (commencing contractor” with Section 7055) of this chapter. Added Stats 1939 ch 37 § 1. Amended 1941 ch 971 § 1; Stats 1961 ch 1821 § 63; Stats 1963 ch 1098 § 2; Stats 1971 ch 716 § 100; Stats 1972 c h 1314 § 2; Stats 1973 ch 319 § 32; Stats 1975 ch 1153 § 2; Stats 1976 ch 1188 § 1 (AB 2190); § 39; Stats 1991 ch 1160 § 1 (AB 203); Stats 2000 ch 1005 Stats 1994 ch 279 § 3 (SB 2029). § 7003. Terms, vacancies, and appointment of succes sors erwise provided, an appointment to fill a vacancy Except as oth caused by the expiration of the term of office shall be for a term of four years and shall be filled, except for a vacancy in the term of a public member, by a member from the same branch of the contracting business as was the branch of the member whose term has expired. A vacancy in the term of a public member shall be filled by another pu b- lic member. Each member shall hold office until the appointment and qualification of his or her successor or until the office is deemed to be vacant pursuant to Section 1774 of the Government Code, whichever first occurs. Vacancies occurring in the membership of the board for any cause shall be filled by appointment for the balance of the unexpired term. No person shall se rve as a member of the board for more than two consecutive terms. The Governor shall appoint four of the public members, including the public member who is from a statewide senior citizen organiz ation, the local building official, the member of a labor org anization repr e- senting the building trades, and the five contractor members qualified as provided in Section 7002. The Senate Rules Committee and the Speaker of the Assembly shall each appoint two public me mbers.

314 282 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1939 ch 37 § 1; Stats 1961 ch 1821 § 64; § 1. Amended Stats 1 955 ch 1532 101; Stats 1972 ch 1314 § § 3; Stats 1971 ch 716 § 3; Stats 1973 ch Stats 1963 ch 1098 § 3; Stats 1976 ch 1188 § 40; Stats 1982 ch 676 § 41; Stats 319 § 33; Stats 1975 ch 1153 ch 279 § 2 (AB 203); Stats 1999 ch 983 § 5 (SB § 2 (AB 2190); Stats 1994 1991 ch 1160 4 (SB 2029). 1307); Stats 2000 ch 1005 § —See Government Code 1774, Vacancies; Appointments and Rea ppointments by the Governor and Senate, in Appendix. Removal of members; Grounds § 7005. The Governor may r emove any member of the board for misconduct, incompetency or neglect of duty. Added Stats 1939 ch 37 § 1. § 7006. Meetings of board; Regular and special The board shall meet at least once each calendar quarter for the purpose of transacting business as may properly come before it. Special meetings of the board may be held at times as the board may provide in its bylaws. Four members of the board may call a sp e- cial meeting at any time. § 1. Amended Stats 2001 ch 728 Added Stats 1939 ch 37 § 52 (SB 724). § 7007. Quorum; Notice of meetings Eight members constitute a quorum at a board meeting. Due notice of each meeting and the time and place thereof shall be given each member in the manner provided by the bylaws. Added Stats 1939 ch 37 § 1. Amended Stats 1 961 ch 1821 § 65; Stats 1972 ch 1314 § 4; Stats 1975 ch 1153 § 4; Stats 2000 ch 1005 § 5 (SB 2029). § 7008. Appointment of committees; Making of rules and regulations The board may appoint such committees and make such rules and regulations as are reason ably necessary to carry out the provisions of this chapter. Such rules and regulations shall be adopted in accor d- ance with the provisions of the Administrative Procedure Act. Added Stats 1939 ch 37 § 1. Amended Stats 1957 ch 2084 § 20; Stats 1983 ch 891 § 1. § 7009. Administration of oaths and taking of proofs Any member or committee of the board may administer oaths and may take testimony and proofs concerning all matters within the j u- risdiction of the board. Added Stats 1939 ch 37 § 1.

315 CHAPTER 12. CONTRACT ORS LICENSE LAW 283 § 7010. Functio ns and duties of board The board is vested with all functions and duties relating to the administration of this chapter, except those functions and duties vested in the director under the provisions of Division I of this code. Added Stats 1939 ch 37 § 1. § 7011. Registrar of contractors (Repealed January 1, 2020) (a) The board, by and with the approval of the director, shall ap- point a registrar of contractors and fix his or her compensation. (b) The registrar shall be the executive officer and secretary of the board and shall carry out all of the administrative duties as provided in this chapter and as delegated to him or her by the board. For the purpose of administration of this chapter, there may be (c) d hearing officer, appointed a deputy registrar, a chief reviewing an and, subject to Section 159.5, other assistants and subordinates as may be necessary. (d) Appointments shall be made in accordance with the provisions of civil service laws. (e) 020, This section shall remain in effect only until January 1, 2 and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date. Added Stats 1939 ch 37 § 1. Amended Stats 1947 ch 1406 § 1; Stats 1951 ch 1613 § 16; Stats 1963 ch 1587 § 1; Stats 1 971 ch 716 § 102; Stats 1994 ch 908 § 49 (SB 2036); Stats 1997 ch 812 § 2 (SB 857), ch 813 6 (SB 1306); § 2 (SB 825); Stats 1999 ch 656 § § 9 (SB 26), effective October 9, 2001; Stats 2002 ch 744 § Stats 2001 ch 615 4 (SB 1953); Stats 2005 ch 675 § 11 (SB 232), effective January 1, 2006; Stats 2006 ch 658 § 106 (SB 1476), effective January 1, 2007; Stats 2008 ch 385 § 8 (SB 963), effective uary 1, 2009; Stats 2010 ch 695 § 38 (SB 294), effective January 1, 2011, repealed Jan uary 1, 2012; Stats 2011 ch 448 § 22 (SB 543), effective January 1, 2012, repealed Jan Jan uary 1, 2016; Stats 2015 ch 656 § 7 (SB 467), effective January 1, 2016, repealed Jan uary 1, 2020. § 7011.3. Prohibition against double penalty for same o ffense The registrar shall not assess a civil penalty against a licensed co n- tractor who has been assessed a specified civil penalty by the Labor Commissioner under Section 1020 or 1022 of the Labor Code for the same offense. Added Stats 1982 ch 327 § 5, effective June 30, 1982. § 7011.4. Enforcements of licensing provisions and workers ’ compensation (a) Notwithstanding Section 7011, there is in the Contractors ’ State License Board, a separate enforcement division that shall rigo rously enforce this chapter prohibiting all forms of unlicensed activit y and

316 284 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW shall enforce the obligation to secure the payment of valid and cu r- rent workers ’ compensation insurance in accordance with Section 3700.5 of the Labor Code. (b) Persons employed as enforcement representatives of the Con- tractors n- ’ State License Board a nd designated by the Director of Co p- sumer Affairs shall have the authority to issue a written notice to a pear in court pursuant to Chapter 5C (commencing with Section t- 853.5) of Title 3 of Part 2 of the Penal Code. An employee so designa ed is not a peace officer and is not entitled to safety member retir e- ment benefits as a result of that designation. He or she does not have the power of arrest. (c) When participating in the activities of the Joint Enforcement Strike Force on the Underground Economy pursuan t to Section 329 of the Unemployment Insurance Code, the enforcement division shall have free access to all places of labor. Added Stats 1989 ch 1363 § 1. Amended Stats 1994 ch 413 § 1 (SB 1694); Stats 2004 ch 865 § 4 (SB 1914); Stats 2012 ch 85 § 1 (AB 25 54), effective January 1, 2013; Stats 2014 ch 392 § 1 (SB 315), effective January 1, 2015; Stats 2015 ch 389 § 2 (SB 560), effective January 1, 2016. nvestigations and —See Government Code Section 11181, Powers in Connection with I Actions, in Appendix. § 7011.5. Investigators as peace officers Persons employed as investigators of the Special Investigations ’ State License Board and designated by the Unit of the Contractors Director of Consumer Affairs have the authority of peace officers while engaged in e xercising the powers granted or performing the duties imposed upon them in investigating the laws administered by the Contractors ’ State License Board or commencing directly or ind i- rectly any criminal prosecution arising from any investigation co n- ducted un der these laws. All persons herein referred to shall be deemed to be acting within the scope of employment with respect to all acts and matters in this section set forth. Added Stats 1982 ch 1277 § 1. § 7011.7. Reviewing and investigating complaints (a) The registrar shall review and investigate complaints filed in a manner consistent with this chapter and the Budget Act. It is the i n- tent of the Legislature that complaints be reviewed and investigated as promptly as resources allow. (b) The board shall se t as a goal the improvement of its disciplinary system so that an average of no more than six months elapses from the receipt of a complaint to the completion of an investigation.

317 CHAPTER 12. CONTRACT ORS LICENSE LAW 285 (c) Notwithstanding subdivision (a), the goal for completing the r e- view and investigation of complaints that, in the opinion of the board, involve complex fraud issues or complex contractual arrangements, should be no more than one year. Added Stats 1983 ch 1301 § 1, operative January 1, 1984. Amended Stats 1989 ch 1132 § 1, effec tive September 29, 1989; Stats 2000 ch 1005 § 6 (SB 2029). False complaints against contractors; Pena lties § 7011.8. (a) Any person subject to licensure under this chapter who reports to, or causes a complaint to be filed with, the Contractors' State L i- o- cense Board that a person licensed by that entity has engaged in pr fessional misconduct, knowing the report or complaint to be false, may be issued a citation by the registrar. (b) The board may notify the appropriate district attorney or city t a person subject to licensure under this chapter has attorney tha made or filed what the entity believes to be a false report or com- plaint against a licensee. Added Stats 1992 ch 437 § 1 (AB 2966). Amended Stats 2001 ch 745 § 5 (SB 1191), effective October 12, 2001; Stats 2012 ch 661 § 10 (SB 1576), effective January 1, 2013. § 7012. Cooperation in enforcement of legislation rela ting to construction industry; Assistants The registrar, with the approval of the board and the director, may, when funds are available, co operate in the enforcement of gover n- mental legislation relating to the construction industry, and, except as provided by Section 159.5, shall appoint such assistants as may be necessary therefor. Added Stats 1939 ch 37 § 1. Amended Stats 1971 ch 716 § 103. § 7013. Review of registrar ’s acts or decisions by board; Application of section The board may in its discretion review and sustain or reverse by a majority vote any action or decision of the registrar. This section shall apply to any action, decision, order, or proceeding of the registrar conducted in accordance with the provisions of Cha p- ter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. Added Stats 1939 ch 37 § 1. Amended Stats 1961 ch 941 § 1; Stats 1979 ch 410 § 1. § 7013.5. Transcript of witness as evidence In all application, citation, or disciplinary proceedings pursuant to this chapter and conducted in accordance with the provisions of

318 286 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, the testimony of a witness given in any contested civil or criminal action or special proceeding, in any state or before any governmental body or agency, to which the licen- see or person complained against is a party, or in whose behalf the action or proceeding is prosecuted or defended, may be received in evidence, so far as relevant and material to the issues in the proceed- ings, by means of a duly authenticated transcript of that testimony and without proof of the unava ilability of the witness; provided that t- the registrar may order the production of and testimony by that wi ness, in lieu of or in addition to receiving a transcript of his or her testimony and may decline to receive in evidence the transcript of in whole or in part, when it appears that the testimony testimony, p- was given under circumstances that did not require or allow an o -examination. portunity for full cross Added Stats 2003 ch 607 § 30 (SB 1077). Equipment and records; Procurement § 7014. The board m ay procure equipment and records necessary to carry out the provisions of this chapter. Added Stats 1939 ch 37 § 1. § 7015. Seal of board The board shall adopt a seal for its own use. The seal shall have the words ’ State License Board, State of California, D e- “Contractors ” and the care and custody thereof partment of Consumer Affairs, shall be in the hands of the registrar. § 1. Amended Stats 1972 ch 1138 § 1. Added Stats 1939 ch 37 Per diem and expenses of members of board § 7016. Each member of the boa rd shall receive a per diem and expenses as provided in Section 103. Added Stats 1959 ch 1645 § 27. § 7017.3. Report on complaints and case aging stati stics The Contractors ’ State License Board shall report annually to the Legislature, not later than Oct ober 1 of each year, the following st a- tistical information for the prior fiscal year. The following data shall be reported on complaints filed with the board against licensed co n- tractors, registered home improvement salespersons, and unlicensed persons act ing as licensees or registrants:

319 CHAPTER 12. CONTRACT ORS LICENSE LAW 287 (a) The number of complaints received by the board categ orized by source, such as public, trade, profession, government agency, or -initiated, and by type of complaint, such as licensee or nonl i- board censee. (b) The number o f complaints closed prior to referral for field inve s- tigation, categorized by the reason for the closure, such as set tled, referred for mandatory arbitration, or referred for voluntary arbitra- tion. (c) The number of complaints referred for field investigat ion categ o- rized by the type of complaint, such as licensee or nonlicensee. a- (d) The number of complaints closed after referral for field investig eferred tion categorized by the reason for the closure, such as settled, r d for voluntary arbitr for mandatory arbitration, or referre ation. (e) For the board ’s Intake/Mediation Center and the board ’s Inve s- tigation Center closures, respectively, the total number of com plaints closed prior to a field investigation per consumer services represent a- tive, and the total n umber of complaints closed after referral for a field investigation per enforcement representative. Additionally, the board shall report the total number of complaints closed by other board staff during the year. (f) The number of complaints pending at the end of the fiscal year grouped in 90 -day increments, and the percentage of total co mplaints pending, represented by the number of complaints in each grouping. (g) The number of citations issued to licensees categorized by the type of citation such as orde ction r of correction only or order of corre and fine, and the number of citations issued to licensees that were vacated or withdrawn. (h) The number of citations issued to nonlicensees and the number of these citations that were vacated or withdrawn. (i) T m- he number of complaints referred to a local prosecutor for cri inal investigation or prosecution, the number of complaints r eferred to the Attorney General for the filing of an accusation, and the nu m- ber of complaints referred to both a local prosecutor an d the A ttorney General, categorized by type of complaint, such as licensee and nonl i- censee. l- (j) Actions taken by the board, including, but not limited to, the fo lowing: (1) The number of disciplinary actions categorized by type, such as revocations or sus pensions, categorized by whether the disc iplinary action resulted from an accusation, failure to comply with a citation, or failure to comply with an arbitration award. (2) The number of accusations dismissed or wit hdrawn. (k) For subdivisions (g) and (j), the number of cases containing vi o- lations of Sections 7121 and 7121.5, and paragraph (5) of su bdivision (a) of Section 7159.5, categorized by section.

320 288 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW ( mber of l ) The number of interim suspension orders sought, the nu e number of temporary re- interim suspension orders granted, th straining orders sought, and the number of temporary r estraining orders granted. (m) The amount of cost recovery ordered and the amount co llected. n- (n) Case aging data, including data for each major stage of the e forcement process, including the following: (1) The average number of days from the filing of a complaint to its ’s Intake/Mediation Center prior to the r closure by the board eferral for an investigation categorized by the type of complaint, such as l i- censee or nonlicensee. mplaint for (2) The average number of days from the referral of a co an investigation to its closure by the Investigation Ce nter categorized nsee. by the type of complaint, such as licensee or nonlice (3) The average number of days from the filing of a compla int to the referral of the completed investigation to the Attor ney General. (4) The average number of days from the referral of a completed i n- vestigation to the Attorney General to the filing of an acc usation by the Attorney General. (5) The average number of days from the filing of an accus ation to the first hearing date or date of a stipulated settlement. a- (6) The average number of days from the receipt of the Administr tive Law Judge ’s proposed decision to the registrar ’s final decision. § 5 (SB 1953). Amended Stats 2006 ch 106 § 1 (AB 2457), Added Stats 2002 ch 744 28 (AB 299), effective January 1, 2008. effective January 1, 2007; Stats 2007 ch 130 § —See Civil Code Section 3097, Preliminary 20 -Day Notice (Private Work), in Appendix. § 7018 . Contractor license search by ZIP Code or geographic location Prior to January 1, 2019, the board shall add an enhancement to the current contractor license check search function that permits consumers to search for a licensed contractor by either ZIP Code or geograph ic location. § 1 (AB 2486), effective January 1, 2017. Added Stats 2016 ch 270 § 7019. Contract with licensed professionals for site investigation of consumer complaints (a) If funding is made available for that purpose, the board may contract with licen sed professionals, as appropriate, for the site inve s- tigation of consumer complaints. (b) The board may contract with other professionals, including, but not limited to, interpreters and manufacturer ’s representatives, whose skills or expertise are required to aid in the investigation or

321 CHAPTER 12. CONTRACT ORS LICENSE LAW 289 prosecution of a licensee, registrant, applicant for a license or regi s- tration, or those subject to licensure or registration by the board. (c) The registrar shall determine the rate of reimbursement for those roviding assistance to the board pursuant to this section. individuals p All reports shall be completed on a form prescribed by the registrar. ” means, but is (d) As used in this section, “ licensed professionals not limited to, engineers, architects, landscape architects , geologists, and accountants licensed, certificated, or registered pursuant to this div ision. § 2, effective September 28, 1987. Amended Stats 1991 ch Added Stats 1987 ch 1264 § 4 (AB 2190); Stats 2002 ch 1013 § 59 (SB 2026). 1160 § 7019.1. [Section repealed 2001.] Added Stats 1997 ch 812 § 2 (SB 857), operative until July 1, 2000. Repealed, operative January 1, 2001, by its own terms. The repealed section related to copy of opinion. —See Unemployment Insurance Code Section 329, Joint Enforcement Strike Force on the Underground Economy, in Appendix. p- —See also Labor Code Section 106, Authority of the Labor Commissioner, in the A pendix. § 7020. Computerized enforcement tracking system for consumer complaints cement tracking sy s- The board shall maintain a computerized enfor tem for consumer complaints. Added Stats 1987 ch 1264 § 3, effective September 28, 1987. Amended Stats 1991 ch 1160 § 5 (AB 2190). § 7021 . Interagency agreement for information to protect the public The board may enter into an interage ncy agreement with any other state or local agency the board deems to be in possession of any i n- formation relevant to its priority to protect the public described in Section 7000.6. Added Stats 2016 ch 372 § 1 (SB 465), effective January 1, 2017.

322 290 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Article 2 Application of Chapter § 7025. Members of the personnel of record ”; “Person ”; “ ”; “Qualifier ” “Qualifying person ”; “Qualifying individual ” as used in this chapter “Members of the personnel of record (a) means every person listed in the records of the registrar as then ass o- ciated with a licensee. “Person ” as used in this chapter includes an individual, a firm, (b) partnership, corporation, limited liability company, association or other organization, or any combination thereof. “Qualifying person, ” or “qualifier, ” as (c) ” “qualifying individual, used in this chapter, means a person who qualifies for a license pu r- suant to Section 7068. Added Stats 1939 ch 37 § 2 (SB 392), effective January § 1. Amended Stats 2010 ch 698 1, 2011. § 7026. “ Contractor ”; “Roa dway ” “Contractor, ” for the purposes of this chapter, is synonymous with “builder ” and, within the meaning of this chapter, a contractor is any person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, su b- tract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, improvement, or to do any part thereof, including the development or erection of scaffolding or other structures or works in connection therewith, or the cleaning of grounds or structures in connection therewith, or the preparation and removal of roadway construction zones, lane closures, flagging, or traffic diversions, or the installation, repair, maintenance, or calibration of monitoring equipment for u n- derground storage tanks, and whether or not the performance of work herein described involves the addition to, or fa brication into, any structure, project, development or improvement herein described of any material or article of merchandise. “ Contractor ” includes subco n- tractor and specialty contractor. “ Roadway ” includes, but is not li m- ited to, public or city streets, highways, or any public conveyance. Added Stats 1939 ch 37 § 1. Amended Stats 1939 ch 1091 § 1; Stats 1941 ch 971 § 2; Stats 1949 ch 90 § 1; Stats 1963 ch 972 § 1; Stats 1969 ch 761 § 1; Stats 1970 ch 340 § 1; Stats 1973 ch 892 § 1; Stats 1977 ch 429 § 1; Stats 1999 ch 708 § 1 (AB 1206); Stats 2001 ch 728 § 53 (SB 724). § 7026.1. “ Contractor ” (a) The term “contractor” includes all of the following:

323 CHAPTER 12. CONTRACT ORS LICENSE LAW 291 (1) Any person not exempt under Section 7053 who maintains or ration equipment that is a services air -conditioning, heating, or refrige fixed part of the structure to which it is attached. (2) (A) Any person, consultant to an owner -builder, firm, associ ation, organization, partnership, business trust, corporation, or co mpany, who or which undertakes, offers to un dertake, purports to have the capacity to undertake, or submits a bid to construct any building or home improvement project, or part thereof. (B) For purposes of this paragraph, a consultant is a person, other than a public agency or an owner of privately owned real property to elates to be improved, who meets either of the following criteria as it r work performed pursuant to a home improvement contract as defined in Section 7151.2: (i) Provides or oversees a bid for a construction project. (ii) Arranges fo b- r and sets up work schedules for contractors and su contractors and maintains oversight of a construction project. (3) A temporary labor service agency that, as the employer, pr ovides employees for the performance of work covered by this chapter. The provi sions of this paragraph shall not apply if there is a properly li- censed contractor who exercises supervision in accordance with Se c- tion 7068.1 and who is directly responsible for the final results of the work. Nothing in this paragraph shall require a qualifying individual, as provided in Section 7068, to be present during the supervision of work covered by this chapter. A contra ctor requesting the services of a temporary labor service agency shall provide his or her license number to that temporary labor s ervice agency. (4) Any person not otherwise exempt by this chapter, who pe rforms tree removal, tree pruning, stump removal, or engages in tree or limb cabling or guying. The term contractor does not include a person pe r- forming the activities of a nurserype rson who in the normal course of routine work performs incidental pruning of trees, or guying of plan t- ed trees and their limbs. The term contractor does not include a ga r- dener who in the normal course of routine work performs incidental asuring less than 15 feet in height after planting. pruning of trees me (5) Any person engaged in the business of drilling, digging, boring, or otherwise constructing, deepening, repairing, reperforating, or abandoning any water well, cathodic protection well, or monitoring well. (b) The term “contractor” or “consultant” does not include a com mon interest development manager, as defined in Section 11501, and a common interest development manager is not required to have a con- tractor’s license when performing management services , as d efined in subdivision (d) of Section 11500.

324 292 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1971 ch 1365 § 1. Amended Stats 1991 ch 1160 § 6 (AB 2190); Stats 2003 10 (AB 3082); Stats 2012 ch 371 § 1 (AB 544); Stats 2004 ch 183 § 1 (AB 2237), ch 759 § effective January 1, 2013; Stats 2013 ch 319 § 6 (SB 822), effective January 1, 2014. § 7026.2. Definitions (a) For the purposes of this chapter, r- “contractor ” includes any pe a- son engaged in the business of the construction, installation, alter tion, repair, or preparation for moving of a mobilehome or m o- bilehome accessory buildings and structures upon a site for the pu r- pose of occupancy as a dwelling. “Contractor (b) o- ” does not include the manufacturer of the m n- bilehome or mobilehome accessory building or structure if it is co place other than the site upon which it is installed for structed at a the purpose of occupancy as a dwelling, and does not include the manufacturer when the manufacturer is solely performing work in ’s warranty. “ Contractor” includes compliance with the manufacturer the manufacturer if the manufacturer is engaged in onsite constru c- tion, alteration, or repair of a mobilehome or mobilehome accessory buildings and structures pursuant to specialized plans, specifications, or models, or any work other than in compliance with the manufa c- turer ’s warranty. (c) “Contractor ” does not include a seller of a manufactured home or mobilehome who holds a retail manufactured home or mobilehome dealer ’s license under Chapter 7 (commencing with Section 18045) of e Health and Safety Code, if the installation Part 2 of Division 13 of th i- of the manufactured home or mobilehome is to be performed by a l censed contractor and the seller certifies that fact in writing to the buyer prior to the performance of the installation. The certification shal l include the name, business address, and contractor ’s license number of the licensed contractor by whom the installation will be performed. (d) For the purposes of this chapter, the following terms have the following meanings: (1) “Mobilehome” means a veh icle defined in Section 18008 of the Health and Safety Code. (2) “Mobilehome accessory building or structure ” means a building or structure defined in Section 18008.5 of the Health and Safety Code. (3) “Manufactured home ” means a structure defined in Secti on 18007 of the Health and Safety Code. Added Stats 1969 ch 761 § 2 as § 7027. Amended Stats 1970 ch 340 § 2; Stats 1973 ch 892 § 1.5; Stats 1986 ch 851 § 1. Renumbered by Stats 1991 ch § 2; Stats 1983 ch 891 1160 § 17 (AB 2190). —See California Water Code Section 13750.5, License Required for Water Wells, in the Appendix.

325 CHAPTER 12. CONTRACT ORS LICENSE LAW 293 § 7026.3. Persons who install or contract for the installation of carpet For the purpose of this chapter, “ ” includes any person contractor who installs or contracts for the installatio n of carpet wherein the carpet is attached to the structure by any conventional method as determined by custom and usage in the trade; except that a seller of ’s license under installed carpet who holds a retail furniture dealer Chapter 3 (commencing with S ection 19000) of Division 8 shall not be required to have a contractor ’s license if the installation of the carpet is performed by a licensed contractor and the seller so certifies in writing to the buyer prior to the performance of the installation, which n- certification shall include the name, business address, and co ’s license number of the licensed contractor by whom the i tractor n- stallation will be performed. § 9 (AB 2190). Added Stats 1991 ch 1160 Permissible scope of work for the General § 7026.11. Manufactured Housing Contractor (C -47) license classification Notwithstanding any other provision of law, the permissible scope of work for the General Manufactured Housing Contractor (C -47) li- cense classification set forth in Section 832.47 of Division 8 o f Title 16 of the California Code of Regulations shall include manufactured homes, as defined in Section 18007 of the Health and Safety Code, mobilehomes, as defined in Section 18008 of the Health and Safety Code, and multifamily manufactured homes, as defined in Section 18008.7 of the Health and Safety Code. § 1 (SB 538), effective January 1, 2008. Added Stats 2007 ch 540 Installations of fire protection systems § 7026.12. Except as provided in Section 7026.13, the installation of a fire pr o- tection syste m, excluding an electrical alarm system, shall be pe r- formed only by either of the following: (a) A contractor holding a fire protection contractor classification, as defined in the regulations of the board. (b) An owner -builder of an owner -occupied, single -family dwelling, if not more than two single -family dwellings on the same parcel are constructed within one year, plans are submitted to, and approved by, the city, county, or city and county authority, and the city, county, or city and county authority i nspects and approves the installation. Added Stats 1988 ch 1035 § 1. Amended Stats 1994 ch 185 § 1 (AB 2646); Stats 2013 ch 377 § 1 (AB 433), effective January 1, 2014.

326 294 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7026.13. [Section repealed 2017.] anuary 1, 2014, repealed January 1, § 2 (AB 433), effective J Added Stats 2013 ch 377 o- 2017. The repealed section related to exception for installations of residential fire pr tection systems. § 7027. Advertising as contractor Any person who advertises or puts out any sign or card or other de- vice that wo uld indicate to the public that he or she is a contractor, or s- who causes his or her name or business name to be included in a cla sified advertisement or directory under a classification for constru c- bject to the tion or work of improvement covered by this chapter is su provisions of this chapter regardless of whether his or her operations as a builder are otherwise exempted. Added Stats 1957 ch 948 § 1, as B & P C § 7026.6. Amended Stats 1978 ch 771 § 1. Amended and renumbered by Stats 1991 ch 1160 § 12 (AB 2190); Stats 2011 ch 432 § 8 (SB 944), effective January 1, 2012. § 7027.1. Advertising by unlicensed person; Penalties (a) It is a misdemeanor for any person to advertise for construction or work of improvement covered by this chapter unless that person holds a valid license under this chapter in the classification so adve r- tised, except that a licensed building or engineering contractor may advertise as a general contractor. (b) “Advertise, ” as used in this section, includes, but not by way of , the issuance of any card, sign, or device to any person, the limitation causing, permitting, or allowing of any sign or marking on or in any building or structure, or in any newspaper, magazine, or by airwave or any electronic transmission, or in any directory unde r a listing for construction or work of improvement covered by this chapter, with or without any limiting qualifications. (c) A violation of this section is punishable by a fine of not less than seven hundred dollars ($700) and not more than one thousand dollars ($1,000), which fine shall be in addition to any other punishment i m- posed for a violation of this section. (d) If upon investigation, the registrar has probable cause to believe that an unlicensed individual is in violation of this section, the regis- trar may issue a citation pursuant to Section 7028.7 or 7099.10. Added Stats 1957 ch 948 7026.7. Amended Stats 1978 ch 771 § 2; § 2, as B & P C § Stats 1986 ch 518 § 1. Amended and renumbered by Stats 1991 ch 1160 § 13 (AB 2190). Amended Stats 1994 ch 413 § 2 (SB 1694); Stats 1998 ch 599 § 2 (SB 597). § 7027.2. Advertising by person not licensed Notwithstanding any other provision of this chapter, a person who is not licensed pursuant to this chapter may advertise for constru c- tion work or a work of impro vement covered by this chapter only if

327 CHAPTER 12. CONTRACT ORS LICENSE LAW 295 the aggregate contract price for labor, material, and all other items on a project or undertaking is less than five hundred dollars ($500), and he or she states in the advertisement that he or she is not licensed r this chapter. unde Added Stats 1978 ch 771 § 3, as B & P C § 7026.8. Amended and renumbered by Stats ; Stats 2014 ch 392 § 2 (SB 315), effective January 1, 2015. 1991 ch 1160 § 14 (AB 2190) Penalties for fraudulent use of incorrect license § 7027.3. number Any person, licensed or unlicensed, who willfully and intentionally uses, with intent to defraud, a contractor ’s license number that does ’s license not correspond to the number on a currently valid contractor exceeding ten tho held by that person, is punishable by a fine not u- n- sand dollars ($10,000), or by imprisonment in state prison, or in cou n- ty jail for not more than one year, or by both that fine and impriso ment. The penalty provided by this section is cumulative to the pena l- ties available under all othe r laws of this state. If, upon invest igation, the registrar has probable cause to believe that an unlicensed ind i- vidual is in violation of this section, the registrar may issue a c itation pursuant to Section 7028.7. Added Stats 1984 ch 815 § 1, as B & P C § 7026.10. Amended Stats 1987 ch 930 § 1, effective September 22, 1987. Amended and renumbered by Stats 1991 ch 1160 § 15 (AB 2190). Amended Stats 2001 ch 728 § 54 (SB 724). Advertising as insured or bonded; Requir § 7027.4. ements; Cause for discipline (a) It is a cause for discipline for any contractor to advertise that he or she is “insured” or has insurance without identifying in the adve r- commercial tisement the type of insurance, including, for example, “ ” or “workers ’ compe nsation insurance ” general liability insurance that is carried by the contractor. The contractor may abbreviate the title of the type of insurance. (b) It is cause for discipline for a contractor to advertise that he or she is “bonded” if the reference is to a contractor ’s license bo nd r e- quired pursuant to Section 7071.6 or to a disciplinary bond required pursuant to Section 7071.8. (c) “Advertise, ” as used in this section, includes, but is not limited to, the issuance of any card, sign, or device to any person, the causing, permittin g, or allowing of any sign or marking on or in any building or structure or business vehicle or in any newspaper, magazine, or by airwave or any electronic transmission, or in any directory under a listing for construction or work of improvement covered by this cha p- ter, for the direct or indirect purpose of performing or offering to pe r- form services that require a contractor’ s license.

328 296 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 2003 ch 607 § 31 (SB 1077). Authority for landscape contractor to design § 7027.5. systems or facilities; Pri me contract for pool, spa, hot tub, outdoor cooking center, outdoor fireplace, or rainwater capture system; Subcontracting work outside of the field and scope of activities (a) A landscape contractor working within the classification for which the license is issued may design systems or facilities for work to be performed and supervised by that contractor. d- (b) Notwithstanding any other provision of this chapter, a lan i- scape contractor working within the classification for which the l er into a prime contract for the construction of cense is issued may ent any of the following: (1) A swimming pool, spa, or hot tub, provided that the improv e- ments are included within the landscape project that the landscape contractor is supervising and the construction of any s wimming pool, spa, or hot tub is subcontracted to a single licensed contractor holding a Swimming Pool (C -53) classification, as set forth in Section 832.53 of Title 16 of the California Code of Regulations, or performed by the landscape contractor if the landscape contractor also holds a Swim- ming Pool (C -53) classification. The contractor constructing the swimming pool, spa, or hot tub may subcontract with other appropr i- onents ately licensed contractors for the completion of individual comp ion. of the construct (2) An outdoor cooking center, provided that the improvements are included within a residential landscape project that the contractor is n- supervising. For purposes of this subdivision, “outdoor cooking ce e that is used for the ter” means an unenclosed area within a landscap cooking or preparation of food or beverages. (3) An outdoor fireplace, provided that it is included within a res i- dential landscape project that the contractor is supervising and is not attached to a dwelling. (4) A rainwater capture system, as defined in Section 10573 of the Water Code, used exclusively for landscape irrigation or as a water supply for a fountain, pond, or similar decorative water feature in a landscaping project. (c) (1) Work performed in connection with a landscape project spec i- fied in paragraph (2) , (3), or (4) of subdivision (b) that is outside of the field and scope of activities authorized to be performed under the Landscape Contractor (C -27) classification , as set forth in Section 832.27 of Title 16 of the California Code of Regulations, may only be performed by a landscape contractor if the landscape contractor also either holds an appropriate specialty license classification to perform the work or is licensed as a General Building contractor. If the lan d-

329 CHAPTER 12. CONTRACT ORS LICENSE LAW 297 scape contractor neither holds an appropriate specialty license class i- fication to perform the work nor is licensed as a General Building contractor, the work shall be performed by a Specialty contractor holding the appropriate license classification or by a Gen eral Building contractor performing work in accordance with the requirements of subdivision (b) of Section 7057. (2) Notwithstanding paragraph (1), a landscape contractor perfor m- ing work under the Landscape Contractor (C -27) classification, as set forth in Section 832.27 of Title 16 of the California Code of Regula- tions, may design and install all exterior components of a rainwater capture system, as defined in Section 10573 of the Water Code, that are not a part of, or attached to, a structure. tion of this section shall be cause for disciplinary action. (d) A viola (e) Nothing in this section authorizes a landscape contractor to e n- gage in or perform activities that require a license pursuant to the Pr o- ion 6700)). fessional Engineers Act (Chapter 7 (commencing with Sect Added Stats 1983 ch 699 § 12. Amended Stats 2003 ch 34 § 1 (AB 341); Stats 2007 ch 107 § 1 (AB 711), effective January 1, 2008; Stats 2008 ch 179 § 17 (SB 1498), effective January 1, 2009; Stats 2012 ch 537 § 1 (AB 1750), effective January 1, 2013. § 7028. Engaging in business without license; Fine and punishment; Statute of limitations (a) Unless exempted from this chapter, it is a misdemeanor for a person to engage in the business of, or act in the capacity of, a co n- tractor within this state under either of the following conditions: pter. (1) The person is not licensed in accordance with this cha (2) The person performs acts covered by this chapter under a l i- cense that is under suspension for failure to pay a civil penalty or to comply with an order of correction, pursuant to Section 7090.1, or for failure to resolve all outstanding final liabilities, pursuant to Section 7145.5. (b) A first conviction for the offense described in this section is pu n- ishable 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 de scribed in this section, unless the provisions of subdivision (d) are a pplicable, 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 d irection of, the unlicensed person, or five thousand dollars ($5,000), whichever is greater, and, unless the sentence pres cribed in subdivision (d) is i m- posed, 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

330 298 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW 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 n is punishable by a fine of not less than five thousand do sectio llars ($5,000) nor more than the greater amount of ten thousand do llars ($10,000) or 20 percent of the contract price, or 20 percent of the a g- gregate payments made to, or at the direction of, the u nlicensed pe r- son, 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 c u- mulative to the penalties available under all other laws of this state. tion is subject to the penalties pr e- (e) A person who violates this sec scribed in subdivision (d) if the person was named on a license that was previously revoked and, either in fact or under law, was held r e- sponsible for any act or omission resulting in the revocation. d person engaging in the business of or acting in (f) If the unlicense 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 fu rnished 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 information or a complaint shall be 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 t o 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 subdiv i- sion are declarator y of existing law. § 1. Amended Stats 1963 ch 1883 Added Stats 1939 ch 37 § 4; § 1; Stats 1969 ch 1583 Stats 1972 ch 125 § 1; Stats 1982 ch 607 § 1; Stats 1989 ch 366 § 1; Stats 1995 ch 467 § 1 (SB 1061); Stats 1996 ch 145 § 1 (AB 2958); Stats 2003 ch 706 § 1 (SB 443); Stats 2004 ch 183 § 11 (AB 3082); Stats 2005 ch 205 § 1 (SB 488), effective January 1, 2006; Stats 2008 ch 33 § 13 (SB 797), effective June 23, 2008; Stats 2009 ch 319 § 1 (AB 370), 15 (SB 1330), effective January 1, 2011; effective January 1, 2010; Stats 2010 ch 328 § § 3 (SB 315), effective January 1, 2015. Stats 2014 ch 392 § 7028.1. Penalties against uncertified contractors performing asbestos -related work It is a misdemeanor for any contractor, whether licensed or unl i- censed, to perform or engage in asbestos -related work, as defined in Section 6501.8 of the Labor Code, without certification pursuant to Section 7058.5 of this code, or to perform or engage in a removal or remedial action, as defined in subdivision (d) of Section 7058.7, or ,

331 CHAPTER 12. CONTRACT ORS LICENSE LAW 299 unless otherwise exempted by this chapter, to bid for the installation or removal of, or to install or remove, an underground storage tank, without certification pursuant to Section 7058.7. A contractor in vio- he following penalties: lation of this section is subject to one of t (a) Conviction of a first offense is punishable by a fine of not less than one thousand dollars ($1,000) or more than three thousand do l- lars ($3,000), and by possible revocation or suspension of any contra c- ’s license. tor (b) Convict ion of a subsequent offense requires a fine of not less l- than three thousand dollars ($3,000) or more than five thousand do lars ($5,000), or imprisonment in the county jail not exceeding one year, or both the fine and imprisonment, and a mandatory action t o ’s license. suspend or revoke any contractor Added Stats 1985 ch 1587 § 1, effective October 2, 1985. Amended Stats 1986 ch 1443 § 1, effective September 30, 1986, ch 1451 § 1.4, effective September 30, 1986; Stats § 1 (SB 2004), effective Se 1990 ch 1366 § 18 (AB ptember 26, 1990; Stats 1991 ch 1160 2190); Stats 1993 ch 589 § 10 (AB 2211); Stats 1996 ch 712 § 1 (SB 1557); Stats 2004 ch 865 § 7 (SB 1914). § 7028.2. Complaints; Disposition of penalties A criminal complaint pursuant to this chapter may be brought by the Attorney General or by the district attorney or prosecuting attor- ney of any city, in any county in the state with jurisdiction over the contractor or employer, by reason of the contractor ’s ’s or employer act, or failure to act, within that ju risdiction. Any penalty assessed by the court shall be paid to the office of the prosecutor bringing the complaint. § 2, effective October 2, 1985. Amended Stats 1986 ch 1451 Added Stats 1985 ch 1587 § 2; Stats 1998 ch 931 § 8 (SB § 1.5, effective September 30, 1986; Stats 1989 ch 366 2139), effective September 28, 1998. § 7028.3. Injunction against violations In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that a licensee has engaged in, or is enga ging in, any act, practice, or transaction which constitutes a violation of this chapter whereby another person may be substantial- ly injured, or that any person, who does not hold a state contra ctor ’s license in any classification, has engaged in, or is en gaging in, any act, practice, or transaction which constitutes a violation of this chap- ter, whether or not there is substantial injury, the registrar may, e i- ther through the Attorney General or through the district attorney of the county in which the act, practice, or transaction is alleged to have been committed, apply to the superior court of that county or any ot h- er county in which such person maintains a place of business or r e- sides, for an injunction restraining such person from acting in the capacity of a contractor without a license in violation of this chap ter,

332 300 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW or from acting in violation of this chapter when another person may be substantially injured, and, upon a proper showing, a tempo rary c- t injun restraining order, a preliminary injunction, or a permanen tion shall be granted. Added Stats 1965 ch 942 § 1. Amended Stats 1969 ch 698 § 1, ch 1583 § 7; Stats 1982 § 17. ch 517 § 7028.4. Injunction against continuing violation by pe rson ’s license not holding state contractor In addition to the remedies set forth in Section 7028.3, on proper showing by (1) a licensed contractor, or an association of contractors, (2) a consumer affected by the violation, (3) a district attorney, or (4) the Attorney General, of a continuing violation of this chapter by a person who does not hold a state contractor ’s license in any classific a- tion, an injunction shall issue by a court specified in Section 7028.3 at the request of any such party, prohibiting such violation. The plaintiff in any such action shall not be require d to prove irreparable in jury. Added Stats 1969 ch 1583 § 8. Amended Stats 1971 ch 442 § 1. Specified individuals acting as contractor without § 7028.5. license It is unlawful for a person who is or has been a partner, officer, di- rector, manager, respons ible managing employee, responsible manag- ing member, responsible managing manager, or responsible manag- ing officer of, or an individual who is listed in the personnel of record of, a licensed partnership, corporation, limited liability company, firm, assoc iation or other organization to individually engage in the business or individually act in the capacity of a contractor within this state without having a license in good standing to so engage or act. Added Stats 1941 ch 971 § 3. Amended Stats 2010 ch 698 § 3 (SB 392), effective Jan u- ary 1, 2011. § 7028.6. Authority to issue citations The Registrar of Contractors is hereby empowered to issue citations containing orders of abatement and civil penalties against persons acting in the capacity of or engaging in the business of a contractor within this state without having a license in good standing to so act or engage. Added Stats 1981 ch 1124 § 1. Amended Stats 1998 ch 633 § 1 (SB 2217); Stats 2010 ch 415 § 17 (SB 1491), effective January 1, 2011.

333 CHAPTER 12. CONTRACT ORS LICENSE LAW 301 § 7028.7. Issuance of citation (a) If upon inspection or investigation, either upon complaint or otherwise, the registrar has probable cause to believe that a person is acting in the capacity of or engaging in the business of a contractor a- or salesperson within this state without having a license or registr tion in good standing to so act or engage, and the person is not ot h- erwise exempted from this chapter, the registrar shall issue a cit a- tion to that person. (b) Within 72 hours of receiving notice that a public enti ty is i n- n- tending to award, or has awarded, a contract to an unlicensed co tractor, the registrar shall give written notice to the public entity that a citation may be issued if a contract is awarded to an unli- n notice from the regi censed contractor. If after receiving the writte s- trar that the public entity has awarded or awards the contract to an unlicensed contractor, the registrar may issue a citation to the r e- sponsible officer or employee of the public entity as specified in Se c- tion 7028.15. (c) Each cita tion shall be in writing and shall describe with parti c- ularity the basis of the citation. Notwithstanding Sections 125.9 and 148, each citation shall contain an order of abatement and an as- sessment of a civil penalty in an amount not less than two hundred dollars ($200) nor more than fifteen thousand dollars ($15,000). (d) With the approval of the Contractors ’ State License Board, the n- registrar shall prescribe procedures for the issuance of a citation u s- der this section. The board shall adopt regulations covering the a sessment of a civil penalty that shall give due consideration to the gravity of the violation, and any history of previous violations. (e) The sanctions authorized under this section shall be separate es either civil or criminal. from, and in addition to, all other remedi Added Stats 1986 ch 995 § 3, operative January 1, 1988. Amended Stats 1990 ch 774 § 1 (SB 1079), effective September 11, 1990; Stats 1991 ch 785 § 1 (AB 800); Stats 1992 ch 606 § 1 (AB 3240); Stats 2001 ch 728 § 55 (SB 724); St ats 2009 ch 307 § 69 (SB 821), effective January 1, 2010; Stats 2010 ch 415 § 18 (SB 1491), effective January 1, 2011. § 7028.8. Service of citation Service of a citation issued under Section 7028.7 may be made by certified mail at the last known busines s address or residence address of the person cited. Added Stats 1981 ch 1124 § 3. § 7028.9. Limitations period A citation under Section 7028.7 shall be issued by the registrar within four years after the act or omission that is the basis for the

334 302 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW citation or within 18 months after the date of the filing of the co m- plaint with the registrar, whichever is later. Added Stats 1981 ch 1124 § 4. Amended Stats 1996 ch 145 § 2 (AB 2958); Stats 2010 ch 415 § 19 (SB 1491), effective January 1, 2011. Appe al to registrar § 7028.10. Any person served with a citation under Section 7028.7 may appeal to the registrar within 15 working days after service of the citation with respect to violations alleged, scope of the order of abatement, or amount of civil penalty assessed . Added Stats 1981 ch 1124 § 5. Amended Stats 1985 ch 1281 § 1. Citation as final order § 7028.11. If within 15 working days after service of the citation, the person cited fails to notify the registrar that he or she intends to appeal the citation, the citation shall be deemed a final order of the registrar and not subject to review by any court or agency. The 15 -day period may be extended by the registrar for good cause. Added Stats 1981 ch 1124 § 6. Amended Stats 1985 ch 1281 § 2. Hearing; § 7028.12. Decision If the person cited under Section 7028.7 timely notifies the registrar that he or she intends to contest the citation, the registrar shall a f- ford an opportunity for a hearing. The registrar shall thereafter issue a decision, based on findings of fact, affirming, modifying, or vacating the citation or directing other appropriate relief. The proceedings u n- der this section shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Titl e 2 of the Government Code, and the registrar shall have all the powers granted therein. Added Stats 1981 ch 1124 § 7. § 7028.13. Application for court order; Collection of civil penalty; Assignment of rights to civil penalty; Time limit for co llection o f penalty (a) After the exhaustion of the review procedures provided for in Sections 7028.10 to 7028.12, inclusive, the registrar may apply to the appropriate superior court for a judgment in the amount of the civil penalty and an order compelling the cite d person to comply with the order of abatement. The application, which shall include a certified copy of the final order of the registrar, shall constitute a sufficient showing to warrant the issuance of the judgment and order. If the

335 CHAPTER 12. CONTRACT ORS LICENSE LAW 303 cited person did not appeal the citation, a certified copy of the citation and proof of service, and a certification that the person cited is not or was not a licensed contractor or applicant for a license at the time of r- issuance of the citation, shall constitute a sufficient showing to wa rant the issuance of the judgment and order. (b) Notwithstanding any other provision of law, the registrar may delegate the collection of the civil penalty for any citation issued to any person or entity legally authorized to engage in collec tions. Costs of collection shall be borne by the person cited. The registrar shall not delegate the authority to enforce the order of abatement. (c) Notwithstanding any other provision of law, the registrar shall the civil penalty, or a po have the authority to assign the rights to r- tion thereof, for adequate consideration. The assignee and the regi s- s- trar shall have all the rights afforded under the ordinary laws of a signment of rights and delegation of duties. The registrar shall not assign the order of abatement. The assignee may apply to the appr o- priate superior court for a judgment based upon the assigned rights upon the same evidentiary showing as set forth in subdivision (a). i- (d) Notwithstanding any other provision of law, including subdiv sions (a) and (b) of Section 340 of the Code of Civil Procedure, the reg- istrar or his or her designee or assignee shall have four years from the date of the final order to collect civil penalties except that the reg- istrar or his or her designee or assignee shall have 1 0 years from the date of the judgment to enforce civil penalties on citations that have been converted to judgments through the process described in subdi- visions (a) and (c). § 8. Amended Stats 2001 ch 728 § 56 (SB 724); Stats 2005 ch Added Stats 1981 ch 1124 § 2 (SB 1112), effective January 1, 2006. 280 Waiver of part of civil penalty on issuance of § 7028.14. license Notwithstanding any other provision of the law, the registrar may waive part of the civil penalty if the person against whom the civil pen alty is assessed satisfactorily completes all the requirements for, and is issued, a contractor ’s license. Any outstanding injury to the public shall be satisfactorily settled prior to issuance of the li cense. Added Stats 1989 ch 1174 § 1. § 7028.15. Lic ense required to submit bid to public agency; Ex ceptions (a) It is a misdemeanor for any person to submit a bid to a public agency in order to engage in the business or act in the capacity of a contractor within this state without having a license therefor , except in any of the following cases:

336 304 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (1) The person is particularly exempted from this chapter. (2) The bid is submitted on a state project governed by Section v- 10164 of the Public Contract Code or on any local agency project go of the Public Contract Code. erned by Section 20103.5 (b) If a person has been previously convicted of the offense de- scribed in this section, the court shall impose a fine of 20 percent of r- the price of the contract under which the unlicensed person pe formed contracting work, or f our thousand five hundred dollars ($4,500), whichever is greater, or imprisonment in the county jail for not less than 10 days nor more than six months, or both. In the event the person performing the contracting work has agreed to furnish materials and la the price of the bor on an hourly basis, “ ” for the purposes of this subdivision means the aggregate contract m- sum of the cost of materials and labor furnished and the cost of co pleting the work to be performed. (c) This section shall not apply to a joint v e- enture license, as r quired by Section 7029.1. However, at the time of making a bid as a joint venture, each person submitting the bid shall be subject to this section with respect to his or her individual licensure. (d) This section shall not affect the r ight or ability of a licensed ar- chitect, land surveyor, or registered professional engineer to form joint ventures with licensed contractors to render services within the scope of their respective practices. es, a bid submitted (e) Unless one of the foregoing exceptions appli to a public agency by a contractor who is not licensed in accordance with this chapter shall be considered nonresponsive and shall be r e- jected by the public agency. Unless one of the foregoing exceptions applies, a local public agency s hall, before awarding a contract or is- suing a purchase order, verify that the contractor was properly l i- censed when the contractor submitted the bid. Notwithstanding any other provision of law, unless one of the foregoing exceptions applies, the registrar may issue a citation to any public officer or employee of a public entity who knowingly awards a contract or issues a purchase order to a contractor who is not licensed pursuant to this chapter. The amount of civil penalties, appeal, and finality of such c itations shall be subject to Sections 7028.7 to 7028.13, inclusive. Any contract awarded to, or any purchase order issued to, a contractor who is not licensed pursuant to this chapter is void. (f) Any compliance or noncompliance with subdivision (e) of thi s section, as added by Chapter 863 of the Statutes of 1989, shall not invalidate any contract or bid awarded by a public agency during which time that subdivision was in effect. (g) A public employee or officer shall not be subject to a citation pursuant t o this section if the public employee, officer, or employing agency made an inquiry to the board for the purposes of verifying the license status of any person or contractor and the board failed to r e-

337 CHAPTER 12. CONTRACT ORS LICENSE LAW 305 spond to the inquiry within three business days. For pur poses of this section, a telephone response by the board shall be deemed suff icient. § 1. Amended Stats 1990 ch 321 § 1 (SB 929), effective July Added Stats 1989 ch 863 16, 1990; Stats 1991 ch 785 § 2 (AB 800); Stats 1992 ch 294 § 1 (AB 2347). Contract Code Section 10164, License Required for Award of Contract on —See Public State Project; 10262 Payment to Subcontractors, and 20103.5, Public Works Contracts: Bidder or Contract Not Licensed; Penalties, in Appendix. Punishment for engaging in bus § 7028.16. iness without license with respect to structures damaged by natural disaster for which state of emergency has been declared A person who engages in the business or acts in the capacity of a contractor, without having a license therefor, in connection with the offer or performance of repairs to a residential or nonresidential structure for damage caused by a natural disaster for which a state of emergency is proclaimed by the Governor pursuant to Section 8625 of the Government Code, or for which an emergency or major disaster is declared by the President of the United States, shall be punished by a fine up to ten thousand dollars ($10,000), or by imprisonment purs u- ant to subdivision (h) of Section 1170 of the Penal Code for 16 months, or for two or three year n- s, or by both that fine and impriso s- ment, or by a fine up to one thousand dollars ($1,000), or by impri onment in a county jail not exceeding one year, or by both that fine and imprisonment. In addition, a person who utilized the services of the unlicensed contractor is a victim of crime regardless of whether that person had knowledge that the contractor was unlicensed. 1990 ch 36 § 3, effective September 22, 1990. Amended Added Stats 1st Ex Sess 1989- Stats 2009 ch 319 § 2 (AB 370), effective January 1, 2010; Stats 2011 ch 15 § 18 (AB 109), effective April 4, 2011, operative October 1, 2011. —See Penal Code Sections 670, State of Emergency; Fraud of Owners or Lessees of Res- idential Structures; Penalties; 667.16, Enhanced Sentence for Fraud in Repairing Nat u- ral Disaster Damage; 551, Insu rance Fraud, in Appendix. § 7028.17. Failure of unlicensed person to comply with citation; Distribution of fines (a) The failure of an unlicensed individual to comply with a citation after it is final is a misdemeanor. (b) No twithstanding Section 1462.5 or 1463 of the Penal Code or any other provision of law, any fine collected upon conviction in a criminal action brought under this section shall be distributed as fo l- lows:

338 306 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (1) If the action is brought by a district attorney, a ny fine collected shall be paid to the treasurer of the county in which the judgment was entered to be designated for use by the district attorney. (2) If the action is brought by a city attorney or city prosecutor, any fine collected shall be paid to the treasurer of the city in which the judgment was entered, to be designated for use by the city atto rney. 7099.85. Amended Stats 1989 ch 366 § 3. § 1, as B & P C § Added Stats 1988 ch 725 § 30 (AB 2190). Amended and renumbered by Stats 1991 ch 1160 § 7029. icense Issuance and suspension of joint venture l A joint venture license is a license issued to any combination of in- dividuals, corporations, limited liability companies, partnerships, or in other joint ventures, each of which holds a current, active license a- good standing. A joint venture license may be issued in any classific tion 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. Added Stats 1983 ch 891 § 3. Amended Stats 1984 ch 1174 § 1; Stats 2010 ch 698 § 4 (SB 392), effective January 1, 2011. Unlawfully acting in joint venture without l § 7029.1. icense (a) Except as provided in this section, it is unlawful for any two or a- more licensees, each of whom has been issued a license to act sep rately in the capacity of a contractor within this state, to be awarded a contract jointly or otherwise act as a contractor without first having secured a joint venture license in accordance with the provisions of this chapter. (b) Prior to obtaining a joint venture license, contractors licensed in accordance with this chapter may jointly bid for the performance of work covered by this section. If a combination of licensees submit a bid for the performance of work for which a joint venture license is i- required, a failure to obtain that license shall not prevent the impos tion of any penalty specified by law for the failure of a c ontractor who submits a bid to enter into a contract pursuant to the bid. (c) A violation of this section constitutes a cause for disciplinary ac- tion. Added Stats 1983 ch 891 § 4. Amended Stats 1987 ch 930 § 3, effective September 22, 1987; Stats 2003 ch 607 § 32 (SB 1077).

339 CHAPTER 12. CONTRACT ORS LICENSE LAW 307 § 7029.5. Display of name, business address and business license number on commercial vehicles Every C -45 sign contractor, and C -57 -36 plumbing contractor, C s- well- drilling contractor licensed under this chapter shall have di played on each side of each motor vehicle used in his or her business, u- for which a commercial vehicle registration fee has been paid purs ant to Article 3 (commencing with Section 9400) of Chapter 6 of Div i- ess a d- sion 3 of the Vehicle Code, his or her name, permanent busin dress, and contractor’s license number, all in letters and numerals not less than 1½ inches high. The identification requirements of this section shall also apply to any drill rig used for the drilling of water wells. Failure to comply with this sect ion constitutes a cause for discipl i- nary action. Added Stats 1972 ch 681 § 1, operative July 1, 1973, as B & P C § 7029.6. Amended and renumbered by Stats 1991 ch 1160 § 20 (AB 2190); Stats 2011 ch 432 § 9 (SB 944), effective January 1, 2012. § 7029.6. D isplay of business name and contractors ’ license number Except for contractors identified in Section 7029.5, every contractor licensed under this chapter shall have displayed, in or on each motor r- vehicle used in his or her construction business, for which a comme cial vehicle registration fee has been paid pursuant to Article 3 (commencing with Section 9400) of Chapter 6 of Division 3 of the V e- hicle Code, his or her business name and contractors ’ license number at least 72- point font or in a clearly visible location in print type of -quarters of an inch in height and width. three Added Stats 2003 ch 118 § 1 (AB 1538). § 7030. Licensee’s statement on contracts; Notice requirements; Exceptions (a) r- Except for contractors writing home improvement contracts pu suant to Section 7151.2 and contractors writing service and repair contracts pursuant to Section 7159.10, every person licensed purs u- ant to this chapter shall include the following statement in at least 10- point type on all written contracts with respect to which the pe r- son is a prime contractor: “Contractors are required by law to be licensed and regulated by the Contractors’ State License Board which has jurisdiction to inve s- tigate complaints against contractors if a complaint regarding a p a- tent act or omi ssion is filed within four years of the date of the alleged violation. A complaint regarding a latent act or omission pertaining to

340 308 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW structural defects must be filed within 10 years of the date of the a l- e- leged violation. Any questions concerning a contractor may be r ferred to the Registrar, Contractors’ State License Board, P.O. Box 26000, Sacramento, CA 95826.” (b) Every person licensed pursuant to this chapter shall include the following statement in at least 12- point type in all home improvement written pursuant to Section 7151.2 and service and repair contracts contracts written pursuant to Section 7159.10: “Information about the Contractors’ State License Board (CSLB): CSLB is the state consumer protection agency that licenses and regulates construction contractors. ntractor you are Contact CSLB for information about the licensed co considering, including information about disclosable complaints, dis- ciplinary actions and civil judgments that are reported to CSLB. Use only licensed contractors. If you file a complaint against a li- censed contractor within the legal deadline (usually four years), CSLB has authority to investigate the complaint. If you use an unl i- censed contractor, CSLB may not be able to help you resolve your in civil court, and you may be complaint. Your only remedy may be liable for damages arising out of any injuries to the unlicensed co n- tractor or the u nlicensed contractor’s employees. For more information: Visit CSLB’s Internet Web site at www.cslb.ca.gov Call CSLB at 800- 321- CSLB (2752) Write CSLB at P.O. Box 26000, Sacramento, CA 95826.” Failure to comply with the notice requirements set forth in su b- (c) division (a) or (b) of this section is cause for disciplinary action. ative January 1, Added Stats 2005 ch 48 § 5 (SB 1113), effective July 18, 2005, oper 2006. Amended Stats 2011 ch 432 § 10 (SB 944), effective January 1, 2012. § 7030.1. Disclosure (a) A contractor, who has his or her license suspended or revoked two or more times within an eight -year period, shall disclose either in capital letters in 10 -point roman boldface type or in contrasting red print in at least 8 -point roman boldface type, in a document provided prior to entering into a contract to perform work on residential prop- erty with four or fewer units, any disciplinary lic ense suspension, or license revocation during the last eight years resulting from any vio- lation of this chapter by the contractor, whether or not the suspe nsion or revocation was stayed. (b) The disclosure notice required by this section may be provided in a bid, estimate, or other document prior to entering into a con tract. (c) A violation of this section is subject to the following pena lties: (1) A penalty of one thousand dollars ($1,000) shall be assessed for the first violation.

341 CHAPTER 12. CONTRACT ORS LICENSE LAW 309 (2) A penalty of two tho usand five hundred dollars ($2,500) shall be assessed for the second violation. (3) A penalty of five thousand dollars ($5,000) shall be assessed for -year suspension of license by a third violation in addition to a one operation of law. (4) A fourth violat ion shall result in the revocation of license in ac- cordance with this chapter. Added Stats 1996 ch 282 § 3 (AB 2494). Inclusion of license number in contracts, bids, and § 7030.5. advertising is l Every person licensed pursuant to this chapter shall include h i- cense number in: (a) all construction contracts; (b) subcontracts and calls for bid; and (c) all forms of advertising, as prescribed by the re g- istrar of contractors, used by such a person. Added Stats 1972 ch 124 tats 1973 ch 153 § 1, § 1, operative July 1, 1973. Amended S effective July 6, 1973, operative July 1, 1973. § 7031. Allegation and proof of license in action on contract; Recovery of compensation paid to unlicensed contractor; Substantial compliance; Exceptions (a) Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or main- tain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that he or she was a duly licensed contractor at all times du r- ing the performance of that act or contract regardless of the merits of the cause of action brought by the person, ex cept that this prohibition shall not apply to contractors who are each individually licensed u n- der this chapter but who fail to comply with Section 7029. (b) Except as provided in subdivision (e), a person who utilizes the services of an unlicensed contrac tor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or co n- tract. (c) A security interest taken to secure any payment for the perfo r- mance of an y act or contract for which a license is required by this chapter is unenforceable if the person performing the act or contract was not a duly licensed contractor at all times during the perfo r- mance of the act or contract. (d) If licensure or proper licens ure is controverted, then proof of l i- censure pursuant to this section shall be made by production of a ve r- ified certificate of licensure from the Contractors’ State License Board

342 310 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW which establishes that the individual or entity bringing the action was duly licensed in the proper classification of contractors at all times during the performance of any act or contract covered by the action. Nothing in this subdivision shall require any person or entity controverting licensure or proper licensure to produce a v r- erified ce tificate. When licensure or proper licensure is controverted, the bu r- den of proof to establish licensure or proper licensure shall be on the licensee. (e) The judicial doctrine of substantial compliance shall not apply under this section where t he person who engaged in the business or acted in the capacity of a contractor has never been a duly licensed contractor in this state. However, notwithstanding subdivision (b) of Section 143, the court may determine that there has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the i- business or acted in the capacity of a contractor (1) had been duly l censed as a contractor in this state prior to the performan ce of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, and (3) acted promptly and in good faith to remedy the failure to comply with the licensure requirements upon learning of the failure. (f) The exceptions to the prohibition against the application of the judicial doctrine of substantial compliance found in subdivision (e) shall apply to all contracts entered into on or after January 1, 1992, and to all actions or arbitrations arising therefrom, except that the am endments to subdivisions (e) and (f) enacted during the 1994 po r- tion of the 1993– 94 Regular Session of the Legislature shall not apply to either of the following: (1) Any legal action or arbitration commenced prior to January 1, 1995, regardless of the dat e on which the parties entered into the co n- tract. (2) Any legal action or arbitration commenced on or after January 1, 1995, if the legal action or arbitration was commenced prior to January 1, 1995, and was subsequently dismissed. Added Stats 1939 ch 37 § 1. Amended Stats 1957 ch 845 § 1; Stats 1961 ch 1325 § 1; Stats 1965 ch 681 § 1; Stats 1989 ch 368 § 1; Stats 1991 ch 632 § 1 (AB 1382); Stats 1992 ch 229 § 1 (AB 628); Stats 1994 ch 550 § 1 (SB 1 (AB 2413); Stats 1993 ch 797 § 1844); Stats 2001 ch 226 § 1 (AB 678); Stats 2003 ch 289 § 1 (AB 1386); Stats 2016 ch 244 § 1 (AB 1793), effective January 1, 2017. § 7031.5. Applicant’s statement as to license required by city or county permit regulations; Penalty for violation Each county or city which requires the issuance of a permit as a condition precedent to the construction, alteration, improvement, demolition or repair of any building or structure shall also require

343 CHAPTER 12. CONTRACT ORS LICENSE LAW 311 that each applicant for such a permit file as a condition precedent to the issuance of a permit a statement which he has prepared and signed stating that the applicant is licensed under the provisions of this chapter, giving the number of the license and stating that it is in full force and effect, or, if the applicant is exempt from the provis ions of this chapter, the basis for the alleged exemption. Any violation of this section by any applicant for a permit shall be subject to a civil penalty of not more than five hundred dollars ($500). Added Stats 1963 ch 1140 § 1. Amended Stats 1977 ch 1052 § 1. Construction of chapter; Complaints to registrar § 7032. against licensees Nothing in this chapter shall limit the power of a city or county to regulate the quality and character of installations made by contrac- inspections which are designed tors through a system of permits and to secure compliance with and aid in the enforcement of applicable state and local building laws, or to enforce other local laws necessary for the protection of the public health and safety. Nothing in this chapter shall lim it the power of a city or county to adopt any system of permits requiring submission to and approval by the city or county of plans and specifications for an installation prior to the commenc e- ment of construction of the installation. Cities or counties may direct complaints to the registrar against li- censees based upon determinations by city or county enforcement of- ficers of violations by such licensees of codes the enforcement of which m- is the responsibility of the complaining city or county. Such co s shall to the extent determined to be necessary by the registrar plaint be given priority in processing over other complaints. Nothing contained in this section shall be construed as authorizing a city or county to enact regulations relating to the qualification c- s ne essary to engage in the business of contracting. Added Stats 1959 ch 1403 § 1, effective July 1, 1959. Amended Stats 1961 ch 198 § 1. § 7033. Requirement of filing by licensee or applicant statement as to license, or exemption and proof thereof Ever y city or city and county which requires the issuance of a bus i- ness license as a condition precedent to engaging, within the city or city and county, in a business which is subject to regulation under this chapter, shall require that each licensee and each applicant for issuance or renewal of such license shall file, or have on file, with such city or city and county, a signed statement that such licensee or applicant is licensed under the provisions of this chapter and stating that the license is in full force and effect, or, if such licensee or appl i- cant is exempt from the provisions of this chapter, he shall furnish proof of the facts which entitle him to such exemption.

344 312 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1965 ch 1082 § 1. —See Government Code Section 37101.7, Licensing for Rev enue by Cities, in Appendix. Insertion of void or unenforceable provisions in § 7034. contract prohibited (a) No contractor that is required to be licensed under this chapter shall insert in any contract, or be a party, with a subcontractor that is i- sed under this chapter to any contract which contains, a prov licen sion, clause, covenant, or agreement which is void or unenforceable under Section 2782 of the Civil Code. (b) No contractor that is required to be licensed under this chapter shall require a waiver of lien rights from any subcontractor, emplo y- ee, or supplier in violation of Section 8122 of the Civil Code. § 1. Amended Stats 1979 ch 1013 § 3; Stats 2010 ch 697 § 1 Added Stats 1976 ch 411 (SB 189), effective January 1, 2011, operative July 1, 2012. —See Civil Code Sections 2782 Construction Contracts; Invalidity of Provisions to I n- demnify Promissee Against Liability; Exceptions and 2782.6 Exception for Professional Engineer or Geologist; “Hazardous Materials ” Defined, in Appendix. Article 3 Exemptions § 7040. United States, State, and subdivisions (a) This chapter does not apply to an authorized representative of the United States government, the State of California, or any inco r- porated town, city, county, irrigation district, reclamation district or other municipal or political corporation or subdivision of this state when the entity or its representative is acting within the scope of the ’s or representative’ entity s official capacity. (b) Nothing in this section authorizes the entity or it ’s auth orized representative thereof either to enter into or authorize a contract with an unlicensed contractor for work which is required by this chapter to be performed by a licensed contractor. Added Stats 1939 ch 37 § 1; Stats 1995 ch 467 § 2 (SB § 1. Amended Stats 1986 ch 1230 1061). —See Public Contract Code Section 6100 License Required for Award of Contract, in Appendix. § 7041. Court officers This chapter does not apply to officers of a court when they are ac t- ing within the scope of their office. Added Stats 1939 ch 37 § 1.

345 CHAPTER 12. CONTRACT ORS LICENSE LAW 313 § 7042. Public utilities in their own business oper ations This chapter does not apply to public utilities operating under the regulation of the State Railroad Commission on construction, maintenance and development work incidental t o their own business. Added Stats 1939 ch 37 § 1. Adoption fees; Deferral, waiver, or reduction § 7042.1. (a) Notwithstanding any other provisions of this chapter, gas heat, or electrical corporations and their subsidiaries that are regulated as public u tilities by the Public Utilities Commission shall not conduct s license is required, except under any work for which a contractor’ one or more of the following conditions: a- (1) The work is performed upon the gas, heat, or electrical corpor ’s properties. tion (2) The work is performed through a contract with a contractor or contractors licensed pursuant to this chapter or the work is pe r- -income citizens pursuant to a program authorized by formed for low order of the Public Utilities Commission. (3) The work is undertaken by the gas, heat, or electrical corpor a- tion in furtherance of the generation, transmission, or distribution of electricity, gas, or steam, whether within or without the service area of the corporation, if any work performed within a structure an d b e- yond a customer ’s utility meter is necessary to protect the public saf e- ty or to avoid interruption of service. pter. (4) The work is otherwise exempt from the provisions of this cha (5) The work is performed to comply with programs or procedures ordered or authorized by the Public Utilities Commission not inco n- sistent with the objectives expressed in Chapter 984 of the Statutes of 1983. l- (b) For the purposes of this section, the following terms have the fo lowing meanings: (1) “Gas, heat, or electrical co rporation properties ” means properties which a gas, heat, or electrical corporation owns or leases, or over which it has been granted an easement for utility purposes, or facil i- ties which a gas, heat, or electrical corporation owns or operates for purposes. utility (2) “Subsidiaries ” means subsidiaries of a gas, heat, or electrical corporation regulated as public utilities by the Public Utilities Co m- mission which carry out activities solely for utility purposes. (c) It is the intention of the Legislature in enacting this section that public utility regulations be clearly based on the principle that the energy conservation industry should be allowed to develop in a co m- petitive manner, as declared in Chapter 984 of the Statutes of 1983. Added Stats 1984 ch 1136 § 1. Amended Stats 1989 ch 29 § 1.

346 314 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW —See Labor Code Section 3099 Electrician Competency and Training Standards, in Appendix. Application of chapter; Underground trenching § 7042.5. operations; Cable television corporation defined This chapter does not a pply to public utilities operating under the regulation of the Public Utilities Commission on construction, maintenance, and development work incidental to their own business, or to those activities of a cable television corporation subject to reg u- lation p ursuant to Section 768.5 of the Public Utilities Code, except unde rground trenching by a cable television corporation within the public streets, other than that necessary solely for the connection of its di stribution system to, or within the properties of, subscribers or ntial subscribers. pote As used in this section, a cable television corporation is a corpor a- tion or person that transmits television programs by cable to su b- scribers for a fee. § 1. Amended Stats 1984 ch 945 § 1. Added Stats 1983 ch 1230 § 7043. Oil or gas drilling and operation This chapter does not apply to any construction, repair or operation incidental to the discovering or producing of petroleum or gas, or the drilling, testing, abandoning or other operation of any petroleum or gas we ll, when performed by an owner or lessee. § 1. Added Stats 1939 ch 37 Property owner making own improvements § 7044. (a) This chapter does not apply to any of the following: p- (1) An owner who builds or improves a structure on his or her pro that both of the following conditions are met: erty, provided (A) None of the improvements are intended or offered for sale. (B) The property owner personally performs all of the work or any work not performed by the owner is performed by the owner’s em- ployees with wage s as their sole compensation. (2) An owner who builds or improves a structure on his or her pro p- erty, provided that both of the following conditions are met: (A) The owner directly contracts with licensees who are duly l i- censed to contract for the work of the respective trades i nvolved in completing the project. (B) For projects involving single -family residential structures, no more than four of these structures are intended or o ffered for sale in a calendar year. This subparagraph shall not apply if the o wner co n- tracts with a general contractor for the construction.

347 CHAPTER 12. CONTRACT ORS LICENSE LAW 315 (3) A homeowner improving his or her principal place of res idence or appurtenances thereto, provided that all of the following conditions exist: (A) The work is performed prior to sale. idence for the 12 (B) The homeowner has actually resided in the res months prior to completion of the work. (C) The homeowner has not availed himself or herself of the exem p- tion in this paragraph on more than two structures more than once -year per iod. during any three (4) A nonprofit corporation providing assistance to an owner - builder, as defined in subdivision (a) of Section 50692 of the Health and Safety Code, who is participating in a mutual self -help housing program, as defined in Section 50078 of the Health a nd Safety Code. (b) In all actions brought under this chapter, both of the following shall apply: (1) Except as provided in paragraph (2), proof of the sale or o ffering for sale of a structure by or for the owner -builder within one year af- ter completion of the structure constitutes a rebuttable pr esumption affecting the burden of proof that the structure was unde rtaken for purposes of sale. (2) Proof of the sale or offering for sale of five or more stru ctures by -builder within one year after completion constitutes a co the owner n- clusive presumption that the structures were undertaken for purpo s- es of sale. § 10. Amended Stats 1988 ch 1035 § 1.3; Stats 2009 ch 307 Added Stats 1981 ch 1124 1 (SB 944) , effective Jan u- § 70 (SB 821), effective January 1, 2010; Stats 2016 ch 714 § ary 1, 2017. § 7044.01. Remedies; Violations; Fees and costs In addition to all other remedies, any licensed contractor or associ a- tion of contractors, labor organization, consumer affected by the viola- tion, di ney General shall be entitled to strict attorney, or the Attor seek injunctive relief prohibiting any violation of this chapter by an owner -builder who is neither licensed nor exempted from licensure under this chapter. The plaintiff in that action shall not be required to prove irrepa rable injury and shall be entitled to attorney ’s fees and all costs incurred in the prosecution of the action, provided the plai n- tiff is the prevailing party. The defendant in that action shall be ent i- tled to attorney ’s fees and all costs in curred in the defense against the action, provided the defendant is the prevailing party. Enacted by Stats. 2009, Ch. 307.

348 316 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7044.1. Real estate licensee acting within scope of l icense This chapter does not apply to a real estate licensee acting within cope of his or her license pursuant to the Real Estate the course and s v- Law (Part 1 (commencing with Section 10000) of Division 4). Howe er, nothing in this section shall authorize a real estate licensee or a property manager to act in the capacity of a contractor unless l i- censed by the board. § 1 (AB 2636). Added Stats 1994 ch 361 § 7044.2. Inapplicability of chapter v- This chapter does not apply to an admitted surety insurer whene e- er that surety insurer engages a contractor to undertake the compl ch a performance or completion bond was i tion of a contract on whi s- sued by the surety insurer, provided all actual construction work is performed by duly licensed contractors. Added Stats 1996 ch 287 § 1 (SB 2002). Amended Stats 1997 ch 17 § 7 (SB 947). § 7045. ion of products not part of stru cture Sale or installat This chapter does not apply to the sale or installation of any fi n- ished products, materials, or articles of merchandise that do not b e- come a fixed part of the structure, nor shall it apply to a material supplier or man ufacturer furnishing finished products, materials, or articles of merchandise who does not install or contract for the insta l- finished products lation of those items. The term “ ” shall not include installed carpets or mobilehomes or mobilehome accessory stru ctures, as defined in Section 7026.2. This chapter shall apply to the installation of home improvement goods, as defined in Section 7151. § 1. Amended Stats 1961 ch 1585 § 1; Stats 1967 ch 687 § 1; Added Stats 1939 ch 37 Stats 1969 ch 761 § 3; Stats 1970 c h 340 § 3; Stats 1973 ch 892 § 3; Stats 1979 ch 1012 § 1; Stats 1981 ch 916 § 1; Stats 1991 ch 1160 § 23 (AB 2190); Stats 1993 ch 589 § 11 (AB 2211). Personal property work; Mobilehome accessory § 7046. buildings or structures to any construction, alteration, im- This chapter does not apply provement, or repair of personal property. The term “personal prope r- ty” shall not include mobilehomes or mobilehome accessory stru ctures as defined in Section 7026.2. Added Stats 1939 ch 37 § 1. Amended Stats 1969 ch 761 § 4; Stats 1970 ch 340 § 4; Stats 1973 ch 892 § 4; Stats 1991 ch 1160 § 24 (AB 2190).

349 CHAPTER 12. CONTRACT ORS LICENSE LAW 317 § 7048. Contracts aggregating less than specified amount; When exemption not applicable This chapter does not apply to any work or operation on one unde r- taking or proj ect by one or more contracts, the aggregate contract price which for labor, materials, and all other items, is less than five hundred dollars ($500), that work or operations being considered of casual, minor, or inconsequential nature. This exemption does not apply in any case wherein the work of co n- struction is only a part of a larger or major operation, whether unde r- taken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than five hundred dollars ($500) for the purpose of evasion of this chapter or othe rwise. This exemption does not apply to a person who advertises or puts out any sign or card or other device which might indicate to the public is qualified to engage that he or she is a contractor or that he or she in the business of a contractor. § 1. Amended Stats 1945 ch 1361 Added Stats 1939 ch 37 § 1; § 1; Stats 1977 ch 416 Stats 1986 ch 293 § 1; Stats 1998 ch 633 § 3 (SB 2217); Stats 2004 ch 865 § 8 (SB 1914). § 7049. Ditch work and ag ricultural or fire prevention work This chapter does not apply to any construction or operation inc i- h- dental to the construction and repair of irrigation and drainage ditc stricts, es of regularly constituted irrigation districts, reclamation di or to farming , dairying, agriculture, viticulture, horticulture, or stock or poultry raising, or clearing or other work upon the land in rural districts for fire prevention purposes, except when performed by a licensee under this chapter. The provisions of this chapter do apply to the business of drilling, digging, boring, or otherwise constructing, deepening, repairing, reperforating, or abandoning water wells. Added Stats 1939 ch 37 § 1. Amended 1959 ch 1691 § 2. § 7051. r Application of chapter to certain licensees o registrants This chapter does not apply to a licensed architect or a registered civil or professional engineer acting solely in his or her professional capacity or to a licensed structural pest control operator acting within the scope of his or her licen se or a licensee operating within the scope of the Geologist and Geophysicist Act. Added Stats 1949 ch 90 § 4. Amended Stats 1955 ch 1532 § 4; Stats 1994 ch 26 § 206 (AB 1807), effective March 30, 1994.

350 318 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7052. People furnishing material or supplies e- chapter does not apply to any person who only furnishes mat This rials or supplies without fabricating them into, or consuming them in the performance of, the work of the contractor. Added Stats 1949 ch 90 § 5. § 7053. Employees 10 (commencing with Section 7150), Except as provided in Article i- this chapter does not apply to any person who engages in the activ ties herein regulated as an employee who receives wages as his or her sole compensation, does not customarily engage in an independently e- established business, and does not have the right to control or discr tion as to the manner of performance so as to determine the final r e- sults of the work performed. § 6. Amended Stats 1970 ch 227 § 1; Stats 1974 ch 434 § 1; Added Stats 1949 ch 90 Stats 1982 ch 1427 § 2. § 7054. Inapplicability of chapter to licensed alarm co mpany operators This chapter does not apply to any person who performs work in the installation, maintenance, monitoring, selling, alteration, or servicing n (n) of Section 7590.1, and of alarm systems, as defined in subdivisio who holds an alarm company operator ’s license issued pursuant to Chapter 11.6 (commencing with Section 7590). Added Stats 1982 ch 1210 § 25 (AB 2190). § 1. Amended Stats 1991 ch 1160 § 7054.5. Application of licensing provisi ons to install ation of satellite antenna systems on residential structures The licensing provisions of this chapter do not apply to any person registered under Chapter 20 (commencing with Section 9800) if that person ’s activities consist only of installing satellite antenna systems on residential structures or property. Added Stats 1987 ch 422 § 1. —See Business & Professions Code Sections 7590.1, Definitions; 5537 Licensed Contra c- tor Exemptions from the Architect Act 5537.2 Exemp tions and 6737.5, Exemption s for the Provisions of the Engineers Act, in Appendix.

351 CHAPTER 12. CONTRACT ORS LICENSE LAW 319 Article 4 Classifications § 7055. Branches of contracting business For the purpose of classification, the contracting business includes any or all of the following branches: contracting. (a) General engineering (b) General building contracting. (c) Specialty contracting. § 1. Added Stats 1945 ch 1159 General engineering contractor § 7056. A general engineering contractor is a contractor whose principal contracting business is in connection with fi xed works requiring sp e- cialized engineering knowledge and skill, including the following div i- sions or subjects: irrigation, drainage, water power, water supply, flood control, inland waterways, harbors, docks and wharves, ship- yards and ports, dams and hydr oelectric projects, levees, river co ntrol and reclamation works, railroads, highways, streets and roads, tu n- nels, airports and airways, sewers and sewage disposal plants and systems, waste reduction plants, bridges, overpasses, underpasses s- and other similar works, pipelines and other systems for the tran mission of petroleum and other liquid or gaseous substances, parks, playgrounds and other recreational works, refineries, chemical plants and similar industrial plants requiring specialized engineering know ledge and skill, powerhouses, powerplants and other utility l- plants and installations, mines and metallurgical plants, land leve ing and earthmoving projects, excavating, grading, trenching, paving and surfacing work and cement and concrete works in connect ion with the above -mentioned fixed works. Added Stats 1945 ch 1159 § 2. Amended Stats 1951 ch 1606 § 1; Stats 2011 ch 296 § 12 (AB 1023), effective January 1, 2012. § 7057. General building contractor (a) Except as provided in this section, a general bui lding contractor is a contractor whose principal contracting business is in conne ction with any structure built, being built, or to be built, for the su pport, shelter, and enclosure of persons, animals, chattels, or movable pro p- erty of any kind, requiring in its construction the use of at least two unrelated building trades or crafts, or to do or superintend the whole or any part thereof. This does not include anyone who merely furnishes materials or supplies under Section 7045 without fabricating them into , or co n-

352 320 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW suming them in the performance of, the work of the general buil ding contractor. (b) A general building contractor may take a prime contract or a subcontract for a framing or carpentry project. However, a general building contractor shall not take a prime contract for any project i n- volving trades other than framing or carpentry unless the prime co n- tract requires at least two unrelated building trades or crafts other ntractor than framing or carpentry, or unless the general building co holds the appropriate license classification or subcontracts with an appropriately licensed contractor to perform the work. A general building contractor shall not take a subcontract involving trades ot h- equires at leas er than framing or carpentry, unless the subcontract r t two unrelated trades or crafts other than framing or carpentry, or ppropriate license unless the general building contractor holds the a classification. The general building contractor shall not count framing or carpentry in calculating the two unrelated trades necessary in o r- der for the general building contractor to be able to take a prime co n- ving other trades. tract or subcontract for a project invol (c) A general building contractor shall not contract for any project that includes a fire protection syst em as provided for in Section 7026.12 or 7026.13, or the “C -57” Well Drilling classification as pr o- vided for in Section 13750.5 of the Water Code, unless the general building contractor holds the appropriate license classification, or subcontracts with the appropriately licensed contractor. Added Stats 1945 ch 1159 § 3. Amended Stats 1997 ch 812 § 2 (SB 857); Stats 2002 ch 60 (SB 2026); Stats 2013 ch 377 § 1013 § 3 (AB 433), effective January 1, 2014. § 7058. “ Specialty contractor ” tor is a contractor whose operations involve (a) A specialty contrac the performance of construction work requiring special skill and whose principal contracting business involves the use of specialized building trades or crafts. (b) A specialty contractor includes a contractor w hose operations i n- clude the business of servicing or testing fire extinguishing sy stems. (c) A specialty contractor includes a contractor whose operations are concerned with the installation and laying of carpets, linoleum, and resilient floor covering. (d) A specialty contractor includes a contractor whose operations are concerned with preparing or removing roadway construction zones, lane closures, flagging, or traffic diversions on roadways, in- cluding, but not limited to, public streets, highways, or any public conveyance. Added Stats 1945 ch 1159 § 4. Amended Stats 1959 ch 2175 § 1; Stats 1963 ch 1320 § 1; Stats 1967 ch 687 § 2; Stats 1985 ch 253 § 1; Stats 1991 ch 1160 § 26 (AB 2190); Stats 1999 ch 708 § 2 (AB 1206); Stats 2007 ch 354 § 15 (SB 1047), ef fective January 1, 2008.

353 CHAPTER 12. CONTRACT ORS LICENSE LAW 321 § 7058.1. [Section repealed 2002.] § 61 (SB 2026). § 3 (AB 1206). Repealed Stats 2002 ch 1013 Added Stats 1999 ch 708 The repealed section related to requirements for exemption from testing. rs performing asbe stos § 7058.5. Certification of contracto - related work (a) No contractor shall engage in asbestos -related work, as defined in Section 6501.8 of the Labor Code, that involves 100 square feet or more of surface area of asbestos containing materials, unless the qualifier for th e license passes an asbestos certification examination. e- Additional updated asbestos certification examinations may be r quired based on new health and safety information. The decision on whether to require an updated certification examination shall be made by the Contractors State License Board, in consultation with the Division of Occupational Safety and Health in the Department of Industrial Relations and the Division of Environmental and Occupa- tional Disease Control in the State Department of Public Health. No asbestos certification examination shall be required for contrac- tors involved with the installation, maintenance, and repair of asbe s- tos cement pipe or sheets, vinyl asbestos floor materials, or asbestos bituminous or resinous materials. “Asbestos, ” as used in this section, has the same meaning as de- fined in Section 6501.7 of the Labor Code. (b) The Contractors State License Board shall make available to all applicants, either on the board ’s Internet Web site or, if requested, in hard copy, a booklet containing information relative to handling and disposal of asbestos, together with an open book examination concer n- ing asbestos -related work. All applicants for an initial contractor li- cense shall complete the open book examination and, prior to the i s- suance of a contractor’ s license, submit it to the board electronically or by mail if the applicant elects to use the hard -copy format. Added Stats 1985 ch 1587 § 3, effective October 2, 1985. Amended Stats 1986 ch 1451 § 2, effective September 30, 1986; Stats 1987 ch 930 § 4, effective September 22, 1987; Stats 1991 ch 1160 § 20 (SB 1491), effective January § 27 (AB 2190); Stats 2010 ch 415 1, 2011. § 7058.6. Registration with Division of Occupational Safety and Health as condition of asbestos certificatio n; Certification examination; Proof of current registration (a) The board shall not issue an asbestos certification, as required by Section 7058.5, unless the contractor is registered with the Div i- sion of Occupational Safety and Health of the Department of Indu s- trial Relations pursuant to Section 6501.5 of the Labor Code. The board may issue an asbestos certification to a contractor who is not

354 322 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW registered, provided the contractor in a written statement acknow l- edges that he or she does not perform asbestos -related work. The board shall notify both the division and the contractor, in writing, of r- the contractor’s passage of the certification examination, for the pu pose of allowing the contractor to satisfy the requirement of par a- graph (1) of subdivision (a) of Section 6501.5 of the Labor Code. The contractor shall register with the division within 90 days from the date the contractor is notified of the passage of the certification exa m- ination. The board may require a reexamination if the contractor fails to regi ster within 90 days following issuance of the notification. A p- plicable test fees shall be paid for any reexamination required u nder this section. Any contractor who is certified to engage in asbestos (b) -related tion with the division pu work shall present proof of current registra r- suant to Section 6501.5 of the Labor Code upon application for r e- newal of his or her license, if the contractor engages in asbestos - related work, as defined in Section 6501.8 of the Labor Code. A contractor who is not certifie d pursuant to this section may bid (c) on and contract to perform a project involving asbestos -related work as long as the asbestos- related work is performed by a contractor who is certified and registered pursuant to this section and Section 6501.5 of the Lab or Code. (d) The board shall obtain and periodically update the list of co n- -related work who are regi tractors certified to engage in asbestos s- tered pursuant to Section 6501.5 of the Labor Code. Added Stats 1988 ch 1003 § 1.5, operative July 1, 1989. Amende d Stats 1995 ch 467 § 3 (SB 1061); Stats 2011 ch 432 § 11 (SB 944), effective January 1, 2012. § 7058.7. ation Hazardous substance certification examin (a) No contractor may engage in a removal or remedial action, as defined in subdivision (d), unless the qualifier for the license has passed an approved hazardous substance certification examin ation. (b)(1) The Contractors ’ State License Board, the Division of Occup a- tional Safety and Health of the Department of Industrial Relations, xic Substances Control shall jointly select and the Department of To an advisory committee, which shall be composed of two represent a- tives of hazardous substance removal workers in California, two ge n- eral engineering contractors in California, and two representatives of insurance companies in California who shall be selected by the Insu r- ance Commissioner. (2) The Contractors ’ State License Board shall develop a written test for the certification of contractors engaged in hazardous su b- stance removal or remedial action, in consultation with the Division of Occupational Safety and Health, the State Water Resources Co n-

355 CHAPTER 12. CONTRACT ORS LICENSE LAW 323 trol Board, the Department of Toxic Substances Control, and the a d- visory committee. (c) The Contractors ’ State License Board may require additional updated approved hazardous substance certification examinations of licensees currently certified based on new public or occupational health and safety information. The Contractors ’ State License Board, in consultation with the Department of Toxic Substances Control and Water Resources Control Board, shall approve other initial the State and updated hazardous substance certification examinations and de- termine whether to require an updated certification examination of all current certificate holders. n “removal or remedial action ” has the (d) For purposes of this sectio same meaning as found in Chapter 6.8 (commencing with Section 25300) of Division 20 of the Health and Safety Code, if the action r e- quires the contractor to dig into the surface of the earth and remove the dug material and the action is at a site listed pursuant to Section 25356 of the Health and Safety Code or any other site listed as a haz- ardous substance release site by the Department of Toxic Su bstances Control or a site listed on the National Priorities List compil ed pu r- suant to the Comprehensive Environmental Response, Co mpensation, and Liability Act of 1980 (42 U.S.C. Sec. 9601 et seq.). “ Removal or remedial action ” does not include asbestos -related work, as defined in Section 6501.8 of the Labor Code, or work rel ated to a hazardous su b- stance spill on a highway. (e)(1) A contractor may not install or remove an underground sto r- age tank, unless the contractor has passed the hazardous substance cert ification examination developed pursuant to this section. (2) A contra ctor who is not certified may bid on or contract for the installation or removal of an underground tank, if the work is pe r- formed by a contractor who is certified pursuant to this section. “underground storage tank ” (3) For purposes of this subdivision, ha s the same meaning as defined in subdivision (y) of Section 25281 of the Health and Safety Code. Added Stats 1986 ch 1443 § 2, effective September 30, 1986. Amended Stats 1990 ch 1366 § 2 (SB 2004), effective September 26, 1990; Stats 1992 ch 1289 § 42.5 ( AB 2743), ch 1290 § 1 (AB 427); § 1 (AB 3188), effective September 30, 1992; Stats 1993 ch 168 Stats 2002 ch 999 § 1 (AB 2481). —See Health and Safety Code Section 25281 Definitions in Appendix. —See Labor Code Sections 6501.5 Asbestos Certification, 6501.7 Asbe stos: Definitions and 6501.8 Asbestos -Related Work Containing Co nstruction Material, in Appendix. —See also Health and Safety Code Sections 25914 Asbestos and Ha zardous Removal Contracts Intent, 25914.1 Definitions, 25914.2 Need for Separate Contra ct; Emergency Conditions and 25914.3 Certific ation Requirements: Bids, in Appendix

356 324 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7058.8. Information to public regarding removal or encapsulation of asbestos -containing materials r- The board shall make available to the public upon request info mation a bout contracting for the removal or encapsulation of asbe s- tos -containing materials in a building including all of the following: Steps to take when contracting with a company to remove asbes- (a) tos. Existing laws and regulations pertaining to asbestos (b) -related work in California. Basic health information as contained in the United States E (c) n- vironmental Protection Agency publication, “Guidance for Controlling Asbestos -Containing Materials in Buildings.” (d) ed pursuant to Se c- A current list of contractors who are certifi tion 7058.5 to engage in asbestos -related work and who are registered pursuant to Section 6501.5 of the Labor Code. Added Stats 1988 ch 1003 § 2, operative July 1, 1989. Amended Stats 2011 ch 432 § 12 (SB 944), effective January 1, 2012. Rules and regulations affecting classification of § 7059. contractors; Contracts involving two or more crafts; Public works contracts (a) The board may adopt reasonably necessary rules and regula- tions to effect the classification of contractors in a mann er consistent with established usage and procedure as found in the construction business, and may limit the field and scope of the operations of a l i- censed contractor to those in which he or she is classified and qual i- fied to engage, as defined by Sections 7055, 7056, 7057, and 7058. A licensee may make application for classification and be classified in more than one classification if the licensee meets the qualifications prescribed by the board for such additional classification or classific a- tions. The ap plication shall be in a form as prescribed by the registrar and shall be accompanied by the application fee fixed by this chapter. s- No license fee shall be charged for an additional classification or cla sifications. Nothing contained in this section shall prohibit a specialty contrac- tor from taking and executing a contract involving the use of two or more crafts or trades, if the performance of the work in the crafts or trades, other than in which he or she is licensed, is incidental and supplemental to the performance of the work in the craft for which the specialty contractor is licensed. (b) In public works contracts, as defined in Section 1101 of the Pu b- lic Contract Code, the awarding authority shall determine the license classification necessary to bid and perform the project. In no case shall the awarding authority award a prime contract to a specialty

357 CHAPTER 12. CONTRACT ORS LICENSE LAW 325 contractor whose classification constitutes less than a majority of the project. When a specialty contractor is authorized to bid a project, all work to be performed outside of his or her license specialty, except work authorized by subdivision (a), shall be performed by a licensed subcontractor in compliance with the Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code). 9; Stats 1945 ch 1159 § Added Stats 1939 ch 37 § 1. Amended Stats 1941 ch 971 § 5; Stats 21; Stats 1966 ch 4 § 1; Stats 1983 ch 891 § 5; Stats 1987 ch 485 § 1. 1957 ch 2084 § Misleading or § 7059.1. incompatible use of name styles (a) A licensee shall not use any business name that indicates the li- censee is qualified to perform work in classifications other than those issued for that license, or any business name that is incompatible business entity licensed. with the type of (b) A licensee shall not conduct business under more than one name for each license. Nothing in this section shall prevent a licensee from obtaining a business name change as otherwise provided by this chapter. Added Stats 1983 c h 891 § 6. Amended Stats 2001 ch 728 § 57 (SB 724). Article 5 Licensing Investigation, classification, and examinations § 7065. (a) 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 e x- amination shall include questions designed to show that the applicant has the necessary degree of knowledge required by Section 7068 and shall include pertinent questions rela ting to the laws of this state and the contracting business and trade. (b) Contractors’ licenses are to be issued to individual owners, par t- nerships, corporations, and limited liability companies in accordance with this chapter. (1) officer, member, responsible manager, or Every person who is an director of a corporation or limited liability company seeking lice n- sure under this chapter shall be listed on the application as a member of the personnel of record. (2) Every person who is a member of a partnersh ip seeking lice n- sure under this chapter shall be listed on the application as a member of the personnel record. (c) An applicant shall qualify for licensure in accordance with this subdivision as follows:

358 326 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (1) c- An individual owner may qualify by examination for a contra tor’s license upon the appearance of the owner or a qualifying indi- vidual appearing as a responsible managing employee on behalf of the owner. i- (2) A partnership may qualify by examination for a contractor’s l cense upon the appearance of a pa rtner or a qualifying individual ap- pearing as a responsible managing employee on behalf of the partne r- ship. A corporation may qualify by examination for a contractor’s l (3) i- cense upon the appearance of a qualifying individual appearing either y- as a responsible managing officer or a responsible managing emplo ee on behalf of the corporation. (4) 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, a responsible managing member, or a responsible manag- ing employee on behalf of the company. (d) 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 i- -year period immed i- ately preceding the application for licensure and in the same classif cation being applied for. Added Stats 1939 ch 37 § 1. Amended Stats 1979 ch 1013 § 4; Stats 1980 ch 138 § 1, effective May 30, 1980; Stats 1981 ch 1122 § 1; Stats 1982 ch 378 § 1, ch 1347 § 2; Stats 1989 ch 350 § 1; Stats 2010 ch 698 § 5 (SB 392), effective January 1, 2011; Stats 2011 ch 296 § 13 (AB 1023), effective January 1, 2012. —See Government Code Section 12944, Discrimination by “Licensing Board, ” in A p- pendix. § 7065.01. Examination not required for limited specialty license classification Notwithstanding Section 7065, no trade examination shall be r e- quired of an applicant for the limited specialty license classific ation. Added Stats 2002 ch 311 § 2 (AB 264). § 7065.05. Review and revision of examination co ntents The board shall periodically review and, if needed, revise the co n- tents of qualifying examinations to insure that the examination que s- tions are timely and relevant to the business of c ontracting. The board shall, in addition, construct and conduct examinations in such

359 CHAPTER 12. CONTRACT ORS LICENSE LAW 327 a manner as to preclude the possibility of any applicant having prior knowledge of any specific examination question. § 8 (SB 2029); Stats 2005 § 5. Amended Stats 2000 ch 1005 Added Stats 1979 ch 1013 § 3 (SB 1112), effective January 1, 2006. ch 280 § 7065.1. Waiver of examination i- Notwithstanding Section 7065, the registrar may waive the exam nation for a contractor ’s license under any of the following circu m- stances: (a) The qualifying individual has, for five of the seven years imm e- diately preceding the application for licensure, been listed on the offi- cial records of the board as a member of the personnel of any licensee tanding, in the who held a license, which was active and in good s same classification being applied for, and who during the period listed on the license has been actively engaged in a licensee ’s co nstruction activities in the same classification within which the applicant ap- plies for a license. (b) The qu alifying 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 appl ication for licensure, and the qualifying individual is able to show all of the fo l- lowing: (1) The qualifying individual has been actively engaged in the lice n- ’s business for five of the seven years immediately preced see ing 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. a- (3) An application is made for a new license in the same classific tions in which the licensee is or was licensed. (c) The qualifying individual is an employee of a corporation or a limited liability comp any seeking to replace its former qualifying in- dividual and has been employed by that corporation or limited liabi l- ity company under the following conditions: (1) For five of the seven years immediately preceding the applic a- tion for licensure, the qualifyi m- ng individual has been continually e ployed by the corporation or limited liability company in a supervis o- ry capacity in the same classifications being applied for. (2) For five of the seven years immediately preceding the applic a- tion for licensure, the co rporation or limited liability co mpany has held an active license in good standing in the same classifications be- ing applied for. (3) The corporation or limited liability company has not r equested 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

360 328 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW corporation and the officers and managers of a limited liability co m- pany. Added Stats 1981 ch 1122 tats 1982 ch 378 § 2; Stats 1986 ch 27 § 1; § 3. Amended S Stats 1990 ch 1456 § 1 (SB 2476); Stats 1992 ch 746 § 1 (AB 2424); Stats 2010 ch 698 § 6 (SB 392), effective January 1, 2011. § 7065.2. Waiver of examination e the exam Notwithstanding Section 7065, the registrar may waiv i- nation for a contractor ’s license if the applicant has previously held a ’s license in this state and has been acting in the c valid contractor a- pacity of a contractor for the United States government in a position exempt from licensure under this chapter. Added Stats 1987 ch 630 § 1. § 7065.3. Additional classification without examin ation under specified conditions Notwithstanding Section 7065, upon a conclusive showing by a li- censee that he or she possesses experience satisfactory to the regi s- trar in the classification applied for, an additional classification may be added, without further examination, under all of the following conditions: a- (a) For five of the seven years immediately preceding the applic tion, the qualifying individual of the li censee has been listed as a member of the personnel of any licensee whose license was active and in good standing, and who during the period listed on a license was actively engaged in the licensee’s construction activities. or the applicant has had within the (b) The qualifying individual f last 10 years immediately preceding the filing of the application, not less than four years experience as a journeyman, foreman, supervi s- ing employee, or contractor in the classification within which the li- censee intends to engage in the additional classification as a contrac- tor. (c) The application is, as determined by the registrar, for a classif i- cation that is closely related to the classification or classifications in which the licensee is licensed, or the qualifying individual is associa t- ed with a licensed general engineering contractor or licensed general building contractor and is applying for a classification that is a signif- icant component of the licensed contractor’s construction business as determined by the reg istrar. This section shall not apply to an appli- cant who is licensed solely within the limited -specialty classifications. Pursuant to Section 7065, the registrar shall conduct a comprehe n- sive investigation of no less than 3 percent of applications filed un der this section to ensure that the applicants met the experience r e- quirements of this section.

361 CHAPTER 12. CONTRACT ORS LICENSE LAW 329 Added Stats 1990 ch 1456 § f- 3 (SB 2476). Amended Stats 2013 ch 319 § 7 (SB 822), e fective January 1, 2014. § 7065.4. Reciprocity The registrar may accept the qualifications of an applicant who is licensed as a contractor in a similar classification in another state if that state accepts the qualifications of a contractor licensed in this state for purposes of licensure in that other state, and if the board rtains, on a case -by-case basis, that the professional qualific a- asce tions and conditions of good standing for licensure and continued l i- censure are at least the same or greater in that state as in California. The registrar may waive the trade examination for t hat applicant if the applicant provides written certification from that other state in which he or she is licensed, that the applicant ’s license has been in good standing for the previous five years. Added Stats 1990 ch 1326 ber 25, 1990. § 2 (AB 3480), effective Septem § 7065.5. Minor not to be licensed unless guardian a ppointed No license shall be issued to a minor, nor to any partnership a partner of which is a minor, nor to any corporation any officer, dire c- tor or responsible managing employee of which is a minor, nor to any limited liability company any officer, manager, or responsible manag- ing employee of which is a minor, nor to any other kind of business organization in which a minor holds a responsible official position, unless the minor shall firs t have had a guardian appointed by a court of competent jurisdiction. § 10. Amended Stats 2010 ch 698 Added Stats 1941 ch 971 u- § 7 (SB 392), effective Jan ary 1, 2011. § 7066. Application; Form and contents; Fee To obtain an original license, an applicant shall submit to the regi s- trar an application in writing containing the statement that the ap- p- plicant desires the issuance of a license under the terms of this cha ter. The application shall be made on a form prescribed by the registrar in accordance with t he rules and regulations adopted by the board and shall be accompanied by the fee fixed by this chapter. Added Stats 1939 ch 37 § 1. § 7066.5. Blank forms Any person may obtain blank license application forms from the board or may cause to be printed for ms used by or approved by the Registrar of Contractors.

362 330 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1984 ch 1252 § 1. Amended Stats 2011 ch 432 § 13 (SB 944), effective Jan- uary 1, 2012. [Section repealed 2016.] § 7067.5. § 1; Stats 1974 ch 435 § 1; Added Stats 1965 ch 636 § 1. Amended Stats 1969 ch 735 8 (SB 467), effective January 1, § 6. Repealed Stats 2015 ch 656 § Stats 1979 ch 1013 2016. The repealed section related to financial solvency, requirements to license appl i- cants, and financial statements of licensees. § 7067.6. Applica tion form; Signatures required e- (a) Every application form for an original license, for renewal ther c- of, for reinstatement or for reissuance, including both active and ina tive licenses, shall be signed by both the applicant and by the person qualifying on behalf of an individual or firm as referred to in Section 7068.1. (b) (1) Notwithstanding any other law, the board may implement a system that provides for the electronic transmission of an application described in subdivision (a) and the acceptance of a d igital or ele c- tronic signature as part of the filing of those applications. (2) The board by regulation may specify the form and manner of these transmissions and acceptances, including, but not limited to, the adoption of any protocols necessary to ensure the validity and s e- curity of any information, signature, data, or document transmitted electronically or digitally. Upon the effective date of the regulations, the electronic submission of an initial license application or a renewal application, including a digital or electronic signature, shall satisfy the requirements of this article. § 1. Amended Stats 2015 ch 281 § 1 (SB 561), effective Jan Added Stats 1963 ch 1016 u- ary 1, 2016. § 7068. Qualifications (a) The board shall require an applicant to show t he degree of knowledge and experience in the classification applied for, and the general knowledge of the building, safety, health, and lien laws of the state and of the administrative principles of the contracting business that the board deems necessary f or 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 ap pearance or by the appearance of his or he r responsible managing employee who is qualified for the same license classification as the classific a- tion being applied for. (2) If a partnership or a limited partnership, it shall qualify by the appearance of a general partner or by the appearance of a r esponsible

363 CHAPTER 12. CONTRACT ORS LICENSE LAW 331 managing employee who is qualified for the same license classific a- tion 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 ap pearance of a responsible managing officer, a responsible managing manager, responsible managing member, or a responsible managing employee who is qualified for the same license classification as the classific a- tion being applied for. pter (c) A responsible managing employee for the purpose of this cha ual who is a bona fide employee of the appl shall mean an individ icant and is actively engaged in the classification of work for which that responsible managing employee is the qualifying person on be half of the applicant. (d) The board shall, in addition, require an applicant who qualifies a- by means of a responsible managing employee under either par graph (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 cont racting 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), (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 se c- tion. (f) At the time of application for renewal of a license, the current qualifying individual shall file a statement with the registrar, on a form prescribed by the registrar, verifying his or her capacity as a qualifying individual to the licensee. (g) Statements made by or on behalf of an applicant as to the appl i- cant ’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. Added Stats 1939 ch 37 § 1. Amended Stats 1941 ch 971 § 11; Stats 1957 ch 720 § 1; Stats 1959 ch 407 1; Stats 1967 ch 1368 § 1; Stats 1979 ch § 1; Stats 1963 ch 1017 § 1013 § 7; Stats 1980 ch 138 § 2, effective May 30, 1980; Stats 1986 ch 995 § 4; Stats 1989 ch 1174 § 2; Stats 1991 ch 1160 § 28 (AB 2190); Stats 2004 ch 865 § 9 (SB 1914); Stats 2010 ch 698 § 8 (SB 392), effective January 1, 2011. —See Unemployment Code Sect ion 1095, Permissible Uses for EDD Data, in Appendix.

364 332 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7068.1. Duty of individual qualifying on behalf of another; Acting as qualifying individual for additional person or firm; Violation as cause for disciplinary action and misdemeanor ualifying on behalf of an individual or firm under (a) The person q paragraph (1), (2), (3), or (4) of subdivision (b) of Section 7068 shall be responsible for exercising that direct supervision and co ntrol of his or m- her employer’s or principal’s construction operations to secure co ations of the board. pliance with this chapter and the rules and regul 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: (1) There is a common ow nership of at least 20 percent of the equ ity ing of each individual or firm for which the person acts in a qualify capacity. (2) The additional firm is a subsidiary of or a joint venture with the first. “Subsidiary,” as used in this subdivision, means any f irm at least 20 percent of the equity of which is owned by the other firm. (3) With respect to a firm under paragraph (2), (3), or (4) of subdiv i- sion (b) of Section 7068, the majority of the partners, officers, or ma n- agers are the same. (b) Notwithstanding paragraphs (1) to (3), inclusive, of subdivision (a), a qualifying individual may act as the qualifier for no more than three firms in any one -year period. (c) The following definitions shall apply for purposes of this se ction: hip, a limited partnership, a corpor (1) “Firm” means a partners a- tion, a limited liability company, or any other combination or organ i- zation described in Section 7068. (2) “Person” is limited to natural persons, notwithstanding the defi- nition of “person” in Section 7025. d shall require every applicant or licensee qualifying by (d) The boar the appearance of a qualifying individual to submit detailed info r- mation on the qualifying individual’s duties and responsibilities for supervision and control of the applicant’s construction oper ations. (e) Violation of this section shall constitute a cause for disciplinary action and shall be punishable as a misdemeanor by imprisonment in a county jail not to exceed six months, by a fine of not less than three thousand dollars ($3,000), but not to exceed five thousand dollars ($5,000), or by both the fine and imprisonment. Added Stats 1959 ch 407 § 2. Amended Stats 1961 ch 1777 § 1; Stats 1963 ch 1016 § 2; Stats 1967 ch 1368 § 2; Stats 1979 ch 1013 § 8; Stats 1991 ch 145 § 1 (AB 425); Stats 2006 ch 106 § 2 (AB 2457), effective January 1, 2007; Stats 2010 ch 698 § 9 (SB 392), effective January 1, 2011; Stats 2011 ch 296 § 14 (AB 1023), effective January 1, 2012; Stats 2013 ch 180 § 1 (SB 262), effective January 1, 2014.

365 CHAPTER 12. CONTRACT ORS LICENSE LAW 333 § 7068.2. Disassociation of r esponsible managing officer; Notice; Replacement; Petition of licensee; Failure to notify registrar m- (a) If the responsible managing officer, responsible managing e ployee, responsible managing member, or responsible managing manager disassociates from the licensed entity, the licensee or the qualifier shall notify the registrar in writing within 90 days after the date of disassociation. The licensee shall have 90 days after the date of disassociation in which to replace the qualifier. Upon failure to r e- e the qualifier within 90 days after the date of disassociation, the plac license shall be automatically suspended or the classification removed at the end of the 90 days. (b) To replace a responsible managing officer, responsible managing employee, responsible managing member, 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. (c) Upon failure of th s- e licensee or the qualifier to notify the regi trar of the disassociation of the qualifier within 90 days after the date of disassociation, the license shall be automatically suspended or the classification removed and the qualifier removed from the licens e ef- fective the date the written notification is received at the board's headquarters office. (d) The person qualifying on behalf of a licensee under Section 7068 shall be responsible for the licensee's construction operations until ion or the date the board receives the written the date of disassociat notification of disassociation, whichever is later. (e) (1) Upon a showing of good cause by the licensee, the registrar may review and accept a petition for one 90- day extension to replace the qualifier immediately following the initial 90- day period described in subdivision (a) only under one or more of the following circu m- stances: (A) If the licensee is disputing the date of disassociation. (B) If the responsible managing officer, employee, member, or ma n- ager has died. (C) If there has been a delay in processing the application to replace the qualifier that is out of the applicant's control and it is the respo n- sibility of the board or another state or federal agency that is relied upon in the application proce ss. (2) This petition shall be received within 90 days after the date of disassociation or death or delay. The petition shall only be considered if an application to replace the qualifier as prescribed by the registrar is on file with the board. Under the circumstances described in su b- paragraphs (A) and (B) of paragraph (1), the licensee shall have no

366 334 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW more than a total of 180 days after the date of disassociation or death in which to replace the qualifier. ify the registrar of (f) Failure of the licensee or the qualifier to not the qualifier's disassociation within 90 days after the date of disass o- ciation shall constitute grounds for disciplinary action. Added Stats 1983 ch 891 § 5, 9. Amended Stats 1984 ch 1174 § 3; Stats 1987 ch 930 § , 1987; Stats 2010 ch 698 § 10 (SB 392), effective January 1, effective September 22 1 (AB 1091), effective January 1, 2012; Stats 2012 ch 162 § 2 2011; Stats 2011 ch 168 § (SB 1171), effective January 1, 2013. Taking qualifying examination on behalf of § 7068.5. contractor ’s license; Misdemeanor applicant for It is a misdemeanor for any person other than the examinee named in the application to take the qualifying examination on behalf of an ’s license. applicant for a contractor Added Stats 1961 ch 491 § 1. § 7068.7. Obtaining examination for another; Misd emeanor Any person who obtains and provides for another the qualifying e x- amination, or any part thereof, when not authorized to do so, is guilty of a misdemeanor. § 9. Added Stats 1979 ch 1013 Grounds for denial of license; Fingerprints of § 7069. applicants; Criminal history and subsequent arrest information o- (a) An applicant, and each officer, director, partner, manager, ass ciate, and responsible managing employee thereof, shall not have committed acts or crimes that are grounds for denial of licensure u n- der 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 pu r- poses of conducting a criminal history record check. Fingerprints fur- nished pursuant to this subdivision shall be submitted in an electro n- ic format if readily available. Requests for alternative methods of fu r- nishing fingerprints are subject to the approval of the registrar. The board shall use the fingerprints furnishe d 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. Added Stats 1939 c h 37 § 1. Amended Stats 1941 ch 971 § 12; Stats 1955 ch 1547 § 1; Stats 1978 ch 1161 § 362; Stats 2002 ch 744 § 6 (SB 1953); Stats 2003 ch 874 § 20 (SB

367 CHAPTER 12. CONTRACT ORS LICENSE LAW 335 363); Stats 2004 ch 909 § 27.3 (SB 136), effective September 30, 2004; Stats 2007 ch ffective January 1, 2008; Stats 2010 ch 698 240 § 11 (SB 392), effective § 1 (AB 936), e January 1, 2011. § 7069.1. Arrest of licensee or home improvement sales person (a) Upon notification of an arrest of a member of the personnel of a licensee or a home improvement salesperson, the registrar, by first - class mail to the last official address of record, may require the ar- restee to provide proof of the disposition of the matter. y- (b) The proof required by this section shall be satisfactory for carr ’s discretion ing out the purposes of this chapter, and at the registrar may include, but is not limited to, certified court documents, certified court orders, or sentencing documents. Any proof required by this se c- tion shall be received by the registrar within 90 days of the date of the disposition, or within 90 days of the registrar r- ’s demand for info mation if that date is later. (c) Failure to comply with the provisions of this section constitutes cause for disciplinary action. Added Stats 2004 ch 586 § 1 (AB 2216). § 7070. Showing that no license was refused or revoked i- An applicant shall show that he or she has never been denied a l cense or had a license revoked for reasons that would preclude the granting of the license applied for. Where the board has denied an application for license under this chapter or Chapter 2 (commencing o- with Section 480) of Division 1.5, it shall, in its decision, or in its n tice under subdivision (b) of Section 485, inform the applicant of the earliest date that the applicant may reapply for a license, which shall be one year from the effective date of the decision or service of notice under subdivision (b) of Section 485, unless the board prescribes an earlier date. Added Stats 1939 ch 37 § 1. Amended Stats 1997 ch 334 § 1 (SB 299). § 7071. corporation, partnership, or limited Refusal to liability company for member’s lack of qualifications No license shall be issued to a corporation, partnership, limited lia- bility company, or other combination or organization if a responsible officer or director of th e corporation, or other combination or organ i- zation, or a partner of the partnership, or a manager or officer of the limited liability company, or any member of an organization seeking licensure under this chapter does not meet the qualifications required of an applicant other than those qualifications relating to knowledge and experience.

368 336 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1939 ch 37 § 1. Amended Stats 1955 ch 1267 § 1; Stats 2010 ch 698 § 12 (SB 392), effective January 1, 2011; Stats 2011 ch 296 § 15 (AB 1023), effective Jan u- ary 1, 2012. § 7071.3. ation of Entry into armed forces by licensee; Design manager to act for such entrant; Renewal fee and d uration of license Notwithstanding any other provision of this code, the holder of a as entered or enters the current valid license under this chapter who h armed forces of the United States may designate a responsible ma n- aging person or persons to act for him while in the armed forces and until one year after his discharge therefrom, after which time the a u- censee shall terminate. The renewal fee shall thority to so act for the li be paid for any such licensee so designating others to act for him. Any license shall remain in full force and effect for 30 days after the entrance of the licensee into the armed forces, but he shall prior to the expiration of such 30 -day period provide the registrar with the name or names of the persons so designated to conduct his business. The registrar may qualify such persons in any manner he may adopt. i- Persons so designated shall not have committed acts or crimes const tuting grounds for denial of licensure under Section 480. Persons so designated committing any of the acts or crimes const i- tuting grounds for denial of licensure under Section 480 shall be r e- moved from the business of such licensee after a h earing as provided in this chapter. § 1, effective May 24, 1945. Amended Stats 1961 ch 1636 Added Stats 1945 ch 452 § 1, operative October 1, 1962; Stats 1978 ch 1161 § 363. Contractor ’s bond § 7071.5. ’s bond required by this article shall be executed by The contractor an admitted surety in favor of the State of California, in a form a c- ceptable to the registrar and filed with the registrar by the licensee or applicant. The contractor ’s bond shall be for the benefit of the follo w- ing: (a) A homeowner contra cting for home improvement upon the homeowner ’s personal family residence damaged as a result of a vio- lation of this chapter by the licensee. (b) A property owner contracting for the construction of a single - family dwelling who is damaged as a result of a violation of this chap- ter by the licensee. That property owner shall only recover under this subdivision if the single -family dwelling is not intended for sale or offered for sale at the time the damages were incurred. (c) A person damaged as a result of a willful and deliberate viola- tion of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract.

369 CHAPTER 12. CONTRACT ORS LICENSE LAW 337 (d) An employee of the licensee damaged by the licensee ’s failure to pay wages. (e) A person or e ivision ntity, including a laborer described in subd (b) of Section 8024 of the Civil Code, to which a portion of the co m- pensation of an employee of a licensee is paid by agreement with that employee or the collective bargaining agent of that employee, da m- s failure to pay fringe benefits for its aged as the result of the licensee’ employees, including, but not limited to, employer payments de- scribed in Section 1773.1 of the Labor Code and regulations thereu n- d on a pr der (without regard to whether the work was performe ivate or public work). Damage to a person or entity under this subdiv ision is limited to actual employer payments required to be made on behalf of employees of the licensee, as part of the overall compens ation of those employees, which the licensee fails to pay. Added Stats 1967 ch 1604 § 6, operative July 1, 1969. Amended Stats 1979 ch 1013 § 10, ch 1138 1.5, effective March 5, 1980; Stats 1982 ch 517 § 1.5; Stats 1980 ch 27 § § 18; Stats 1999 ch 795 § 1 (SB 914); Stats 2008 ch 157 § 1 (SB 1432), effective January 1, 2009; Stats 2010 ch 697 § 2 (SB 189), effective January 1, 2011, operative July 1, 2012. —See Code of Civil Procedure, Bond and Undertaking Law Sections 995.010 to 996.560 in Appendix. Bond as condition precedent to license § 7071.6. uance, (a) The board shall require as a condition precedent to the iss reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee file or have on file a co ntractor’s rs ($15,000). bond in the sum of fifteen thousand dolla (b) Excluding the claims brought by the beneficiaries specified in subdivision (a) of Section 7071.5, the aggregate liability of a surety on claims brought against a bond required by this section shall not e x- ceed the sum of seven thousand fiv e 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 beneficiar- ies specified in subdivision (a) of Section 7071.5. However, nothing in be construed so as to prevent any beneficiary spec i- this section shall fied in subdivision (a) of Section 7071.5 from claiming or recovering the full measure of the bond required by this section. (c) No bond shall be required of a holder of a license that has been inactivate d on the official records of the board during the period the license is inactive. (d) Notwithstanding any other law, as a condition precedent to l i- censure, the board may require an applicant to post a contractor’s bond in twice the amount required pursuant to subdivision (a) until the time that the license is renewed, under the following conditions:

370 338 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (1) The applicant has either been convicted of a violation of Section 7028 or has been cited pursuant to Section 7028.7. suant to Section 7028.7, the (2) If the applicant has been cited pur citation has been reduced to a final order of the registrar. (3) The violation of Section 7028, or the basis for the citation issued pursuant to Section 7028.7, constituted a substantial injury to the public. Added Stats 2002 c h 1123 § 2 (SB 1919), operative January 1, 2004. Amended Stats 4 (SB 1112), effective January 1, 2006; Stats 2007 ch 354 § 16 (SB 1047), 2005 ch 280 § effective January 1, 2008; Stats 2015 ch 656 § 9 (SB 467), effective January 1, 2016. Surety bond as condition precedent to license § 7071.6.5. (a) The board shall require, as a condition precedent to the iss u- ance, reissuance, reinstatement, reactivation, renewal, or conti nued valid use of a limited liability company license, that the applicant or licensee ndred file or have on file a surety bond in the sum of one hu thousand dollars ($100,000). (b) The bond required by this section shall be executed by an admi t- ted surety in favor of the State of California, in a form acceptable to the registrar and filed wit h the registrar, electronically or othe rwise, by the applicant or licensee. (c) The bond required by this section shall be for the benefit of any employee damaged by his or her employer ’s failure to pay wages, in- terest on wages, or fringe benefits and is i ntended to serve as an addi- tional safeguard for workers employed by or contracted to work for a limited liability company. (d) If an applicant or licensee subject to subdivision (a) is also a par- ty to a collective bargaining agreement, the bond required by c- this se tion shall also cover, in addition to the coverage described in subdiv i- sion (c), welfare fund contributions, pension fund contributions, and apprentice program contributions. (e) The bond required by this section shall not be applicable to a li- cen see whose license has been inactivated on the official records of the board during the period the license is inactive. Added Stats 2010 ch 698 § 13 (SB 392), effective January 1, 2011. § 7071.7. Acceptance of bond as of effective date; Retr oactive reinst atement of license (a) Except as provided in subdivision (b), the registrar shall accept a bond required by Section 7071.6, 7071.6.5, 7071.8, or 7071.9 as of the effective date shown on the bond, if the bond is received by the regi s- trar within 90 days afte r that date, and shall reinstate the li cense to which the bond pertains, if otherwise eligible, retroactive to the effec- tive date of the bond.

371 CHAPTER 12. CONTRACT ORS LICENSE LAW 339 (b) Notwithstanding subdivision (a), the registrar shall accept a bond as of the effective date shown on the bond, even if the bond is not received by the registrar within 90 days after that date, upon a showing by the licensee, on a form acceptable to the registrar, that the failure to have a bond on file was due to circumstances beyond the control of the licensee. The registrar shall reinstate the license to which the bond pertains, if otherwise eligible, retroactive to the effec- tive date of the bond. § 14 (SB 392), effective Jan u- Added Stats 1986 ch 27 § 2. Amended Stats 2010 ch 698 ary 1, 2011. Bond req uired for restoration of suspended or § 7071.8. revoked license (a) This section applies to an application for a license, for renewal or restoration of a license, an application to change officers or mem- ntinued bers of a corporation or a limited liability company, or for co valid use of a license which has been disciplined, whether or not the disciplinary action has been stayed, made by any of the following pe r- sons or firms: (1) A person whose license has been suspended or revoked as a r e- sult of disciplinary action, o r a person who was a qualifying individ u- al for a licensee at any time during which cause for disciplinary ac- tion occurred resulting in suspension or revocation of the licensee ’s license, whether or not the qualifying individual had knowledge or participate d in the prohibited act or omission. (2) A person who was an officer, director, manager, partner, or member of the personnel of record of a licensee at any time during which cause for disciplinary action occurred resulting in suspension or revocation of th e licensee’ s license and who had knowledge of or i- participated in the act or omission which was the cause for the disc plinary action. (3) A partnership, corporation, limited liability company, firm, or association of which an existing or new officer, direc tor, manager, partner, qualifying person, or member of the personnel of record has had a license suspended or revoked as a result of disciplinary a ction. (4) A partnership, corporation, limited liability company, firm, or he personnel of record, i ncluding, association of which a member of t but not limited to, an officer, director, manager, partner, or qualifying person was, likewise, a manager, officer, director, or partner of a l i- censee at any time during which cause for disciplinary action o c- curred result ing 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 i ssuance, reissuance, renewal, or r estoration of a license to the appl icant, or to

372 340 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW the approval of an application to change officers of a corpo rationor a limited liability company, or removal of suspension, or to the contin- evoked, but ued valid use of a license which has been suspended or r 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 viol ation, 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 ar for a period of at least two shall remain on file with the registr years and for any additional time that the registrar determines. The bond period shall run only while the license is current, active, and in r- good standing, and shall be extended until the license has been cu d in good standing for the required period. Each appl i- rent, active, an cant or licensee shall be required to file only one disciplinary contrac- tor ’s bond of the type described in this section for each application or license subject to this bond requirement. § 1, as B & P C § 7071.5. Amended Stats 1961 ch 1125 § 1; Stats Added 1941 ch 882 1963 ch 1972 § 1; Stats 1965 ch 1022 § 1, ch 1025 § 1. Amended and renumbered Stats 1967 ch 1604 § 1, operative July 1, 1969. Amended Stats 1968 ch 482 § 2, operative July 1, 1969; Stats 1974 ch 434 § 2; Stats 1982 ch 517 § 1; Stats 20; Stats 1986 ch 79 § 2 (AB 2347); Stats 1994 ch 192 § 15 (SB 1992 ch 294 § 1 (AB 3475); Stats 2010 ch 698 § 392), effective January 1, 2011. Requirement of qualifying individual ’s bond as § 7071.9. precedent to license condition (a) If the qualifying individual, as referred to in Sections 7068 and 7068.1, is neither the proprietor, a general partner, nor a joint lice n- see, he or she shall file or have on file a qualifying individual’ s bond as provided in Sectio n 7071.10 in the sum of twelve thousand five hundred dollars ($12,500). This bond is in addition to, and may not be s bond required by Sections 7071.5 to combined with, any contractor’ 7071.8, inclusive, and is required for the issuance, reinstatement, r e- activation, 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 lia- bility of a surety on claims brought against the bond required by this section shall not exceed the sum of seven thousand five hundred do l- lars ($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 sub division (a) of Se c- tion 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

373 CHAPTER 12. CONTRACT ORS LICENSE LAW 341 bond required by this secti on. 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 m anaging 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 -percent membership interest in the li m- he or she owns at least a 10 ited liability company and certifies to that fact on a form prescribed by the registrar. § 7, operative July 1, 1970. Amended Stats 1968 ch 482 § 3, Added Stats 1967 ch 1604 operative July 1, 1970; Stats 1971 ch 669 § 2; Stats 1972 ch 7 § 2, effective February § 36, Stats 1979 ch 1013 § 12; 29, 1972, operative March 4, 1972; Stats 1973 ch 319 § 3, effective March 5, 1980; Stats 1982 ch 517 § 21; Stats 1986 ch 27 Stats 1980 ch 27 § 3; Stats 1993 ch 1264 § 6.4 (SB 574); Stats 2004 ch 865 § 10 (SB 1914); Stats 2007 ch 354 § 17 (SB 1047), effective January 1, 2008; Stats 2010 ch 698 § 16 (SB 392), effective January 1, 2011. § 7071.10. Qualifying individual ’s bond s bond required by this article shall be The qualifying individual’ i- executed by an admitted surety insurer in favor of the State of Cal fornia, in a form acceptable to the registrar and filed with the regi s- s bond trar by the qualifying individual. The qualifying individual’ shall not be required in addition to the contractor ’s bond when, as set forth under paragraph (1) of subdivision (b) of Section 70 68, the ind i- vidual proprietor has qualified for the license by his or her personal appearance, or the qualifier is a general partner as set forth under paragraph (2) of subdivision (b) of Section 7068. The qualifying ind i- vidual’ s bond shall be for the bene fit of the following persons: (a) A homeowner contracting for home improvement upon the ’s personal family residence damaged as a result of a vio- homeowner lation of this chapter by the licensee. (b) A property owner contracting for the construction of a sin gle - family dwelling who is damaged as a result of a violation of this chap- ter by the licensee. That property owner shall only recover under this subdivision if the single -family dwelling is not intended for sale or offered for sale at the time the damages were incurred. (c) A person damaged as a result of a willful and deliberate viola- tion of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract. (d) An employee of the licensee damaged by th e licensee’ s failure to pay wages.

374 342 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (e) A person or entity, including a laborer described in subdi vision (b) of Section 8024 of the Civil Code, to which a portion of the co m- pensation of an employee of a licensee is paid by agreement with that e collective bargaining agent of that employee, that is employee or th 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 adop t- rformed on ed thereunder (without regard to whether the work was pe a public or private work). Damage to a person or entity u nder this subdivision is limited to employer payments required to be made on e overall compens behalf of employees of the licensee, as part of th a- tion of those employees, which the licensee fails to pay. § 8, operative July 1, 1969. Amended Stats 1968 ch 482 Added Stats 1967 ch 1604 § 4, operative July 1, 1969; Stats 1979 ch 1013 § 13, ch 1138 § 2.5; Stats 1982 ch 517 § 22; 999 ch 795 Stats 1 § 2 (SB 1432), effective January 1, § 2 (SB 914); Stats 2008 ch 157 2009; Stats 2010 ch 697 § 3 (SB 189), effective January 1, 2011, operative July 1, 2012. § 7071.11. Aggregate liability of surety on claim for wages and benefits; Renewal of l icense contingent on satisfaction of claims and debts; Limitations periods; Notice of payment; Protest of settlement; Accord; Legal fees not to be charged (a) The aggregate liability of a surety on a claim for wages and fringe benefits brought against a bo nd 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 a bond required by this article is insufficient to pay all claims in full, the sum of the bond shall be di s- all claimants in proportion to the amount of their respe c- tributed to tive claims. (b) No license may be renewed, reissued, or reinstated while a judgment or admitted claim in excess of the amount of the bond r e- mains unsatisfied. (c) Except for claims covered by subdi vision (d), any action against a bond required under this article, excluding the judgment bond spec i- fied under Section 7071.17, shall be brought in accordance with the following: (1) Within two years after the expiration of the license period du r- ing which the act or omission occurred. The provisions of this par a- graph shall be applicable only if the license has not been inact ivated, canceled, or revoked during the license period for which the bond was posted and accepted by the registrar as specified under S ection 7071.7. (2) If the license has been inactivated, canceled, or revoked, an a c- tion shall be brought within two years of the date the license of the active licensee would have expired had the license not been inactiva t- ed, canceled, or revoked. For the provisions of this paragraph to be

375 CHAPTER 12. CONTRACT ORS LICENSE LAW 343 applicable, the act or omission for which the action is filed must have occurred prior to the date the license was inactivated, canceled, or revoked. (3) An action against a disciplinary bond filed by an active li censee pursuant to Section 7071.8 shall be brought in accordance with the provisions of paragraph (1) or (2), as applicable, or within two years after the last date for which a disciplinary bond filed pursuant to Se c- tion 7071.8 was required, whichever date is firs t. (d) A claim to recover wages or fringe benefits shall be brought within six months from the date that the wage or fringe benefit deli n- quencies were discovered, but in no event shall a civil action thereon e wage or fringe ben- be brought later than two years from the date th efit contributions were due. (e) Whenever the surety makes payment on a claim against a bond required by this article, whether or not payment is made through a y- court action or otherwise, the surety shall, within 30 days of the pa ment, provide notice to the registrar. The notice required by this su b- division 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 am ount 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. c- (6) Whether or not the payments were the result of a good faith a tion by the surety. The notice shall also clear ly indicate whether or not the licensee filed a protest in accordance with this section. (f) 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. T his protest shall instruct the surety not to make payment from the bond on the licensee ’s account upon the spe- cific grounds that the claim is opposed by the licensee, and provide the surety a specific and reasonable basis for the licensee ’s opposition to p ayment. (1) Whenever a licensee files a protest in accordance with this su b- division, the board shall investigate the matter and file discipli nary 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 pe r- son or entity covered under Section 7071.5. (2) A licensee that fails to file a protest as specified in this subdiv i- sion shall have 90 days from the date of notifica tion 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 admi tted claim in

376 344 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW excess of the amount of the bond or, by operation of law, the license shall be suspended at the e nd 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 ap all plicable to licenses covered by the provisions of subdivision (g). (g) During any period in which a surety remains unreimbursed for a loss or expense sustained on a bond issued pursuant to this article, ense on the license for which the bond was issued, and any other lic which any member of the licensee ’s personnel of record has also been listed, may not be renewed, reissued, or reinstated while the licensee was subject to suspension or disciplinary action under this section. (h) 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 pa y- ment. By operation of law, failure to abide by the accord shall result in the automatic suspension of a license to which this section applies. is suspended for failure to abide by the accord may only A license that be renewed or reinstated when proof of satisfaction of all debts is made. (i) Legal fees may not be charged against the bond by the board. Added Stats 1963 ch 1972 § 7071.6. Amended Stats 1965 ch 1022 § 2. § 2, as B & P C Amended and renumbered by Stats 1967 ch 1604 § 2, operative July 1, 1969. Amended Stats 1968 ch 482 § 5, operative July 1, 1969; Stats 1972 ch 7 § 3, effective February 29, 1972, operative March 4, 1972; Stats 1974 ch 201 § 1; Stats 1977 ch 280 § 1, effe c- tive July 7, 1977; Stats 1979 ch 1013 § 14, ch 1138 § § 3.5, effe c- 3.5; Stats 1980 ch 27 § 23; Stats 1986 ch 1353 tive March 5, 1980; Stats 1982 ch 517 § 1, operative July 1, 1987; Stats 1990 ch 1326 § 3 (AB 3480), effective September 25, 1990; Stats 1993 ch § 7 (SB 574); Stats 1999 ch 795 § 3 (SB 914); Stats 2001 ch 728 § 1264 58 (SB 724); Stats 2002 ch 311 § 3 (AB 264); Stats 2004 ch 865 § 11 (SB 1914); Stats 2005 ch 280 § 5 (SB 1112), effective January 1, 2006; Stats 2008 ch 157 § 3 (SB 1432), effective January 1, 2009; Stats 2010 ch 698 § 17 (SB 392), effective January 1, 2011. —See Code of Civil Procedure, Bond and Undertaking Law Sections 995.010 to 996.560 in Appendix. Deposit in lieu of bond; When released; Lim itati § 7071.12. ons periods; Filing of claims for nonpayment of wages or ben efits (a) Instead of the bond provided by this article a deposit may be given pursuant to Article 7 (commencing with Section 995.710) of Chapter 2 of Title 14 of Part 2 of the Code of Civil Proced ure. (b) If the board is notified, in writing, of a civil action against the deposit authorized under this section, the deposit or any portion thereof shall not be released for any purpose, except as determined by the court. (c) If any deposit authorized u nder this section is insufficient to pay, in full, all claims that have been adjudicated under any action filed in

377 CHAPTER 12. CONTRACT ORS LICENSE LAW 345 accordance with this section, the sum of the deposit shall be distri buted to all claimants in proportion to the amount of their respective cl aims. (d) The following limitations periods apply to deposits in lieu of the bond required by this article: (1) Any action, other than an action to recover wages or fringe ben e- fits, against a deposit given in lieu of a contractor ’s bond or bond of a qualif ying individual filed by an active licensee shall be brought wit h- in three years after the expiration of the license period during which i- the act or omission occurred, or within three years of the date the l cense of the active licensee was inactivated, canc eled, or revoked by the board, whichever occurs first. e- (2) Any action, other than an action to recover wages or fringe ben fits, against a deposit given in lieu of a disciplinary bond filed by an active licensee pursuant to Section 7071.8 shall be brought within three years after the expiration of the license period during which the act or omission occurred, or within three years of the date the license of the active licensee was inactivated, canceled, or revoked by the e last date for which a deposit board, or within three years after th given in lieu of 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 delin- quencies were discovered, but in no event shall a civil action thereon be brought later than two years from the date the wage or fringe ben- efit contributions were due. (e) In any case in which a claim is filed against a deposit given in lieu of a bond by any employee or by an employee organization on b e- half of an employee, concerning wages or fringe benefits based upon the employee’ s employment, claims for the nonpayment shall be filed with the Labor Commissioner. The Labor Commissioner s hall, purs u- ant to the authority vested by Section 96.5 of the Labor Code, con duct hearings to determine whether or not the wages or fringe ben efits should be paid to the complainant. Upon a finding by the commi s- sioner that the wages or fringe benefits shou ld be paid to the co m- plainant, the commissioner shall notify the register of the findings. The registrar shall not make payment from the deposit on the basis of r- findings by the commissioner for a period of 10 days following dete mination of the findings. I f, within the period, the complainant or the contractor files written notice with the registrar and the commissio n- er of an intention to seek judicial review of the findings pursuant to Section 11523 of the Government Code, the registrar shall not make paym ent if an action is actually filed, except as determined by the court. If, thereafter, no action is filed within 60 days following dete r- mination of findings by the commissioner, the registrar shall make payment from the deposit to the complainant. (f) Lega l fees may not be charged by the board against any deposit posted pursuant to this section.

378 346 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1982 ch 517 § 24.5. Amended Stats 2005 ch 280 § 6 (SB 1112), effective January 1, 2006. § 7071.13. Reference to bond in advertising, soliciting, or ot her presentments as ground for suspension of license Any reference by a contractor in his advertising, soliciting, or other presentments to the public to any bond required to be filed pursuant to this chapter is a ground for the suspension of the license o f such contractor. Added Stats 1963 ch 1972 § 4, as B & P C § 7071.8. Renumbered Stats 1967 ch 1604 § 4, operative July 1, 1969. Prohibited discrimination in denying license bond; § 7071.14. Liability for damages No licensee or applicant for a license un der this chapter shall be denied a contractor ’s license bond solely because of his race, religious creed, color, national origin, ancestry, or sex. Whoever denies a con- tractor ’s license bond solely on the grounds specified herein is liable for each and eve ry such offense for the actual damages, and two hu n- dred fifty dollars ($250) in addition thereto, suffered by the licensee or applicant for a license. § 4. Added Stats 1971 ch 669 Revocation or suspension of license for failure to § 7071.15. maintain bon d i- If a licensee fails to maintain a sufficient bond required by this art cle, the license is subject to suspension or revocation pursuant to Sec- tion 996.020 of the Code of Civil Procedure. Added Stats 1983 ch 18 § 1.5, effective April 21, 1983. § 7071.17. Bond required where applicant or licensee has unsatisfied final judgment for failure to pay contractor, subcontractor, consumer, materials supplier, or employee; Notice of unsatisfied final judgments; Suspension for noncompliance; Reinstatement; Disquali fication from serving as personnel of record for other licensee; Disciplinary action (a) Notwithstanding any other provision of law, the board shall r e- quire, as a condition precedent to accepting an application for lice n- sure, 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

379 CHAPTER 12. CONTRACT ORS LICENSE LAW 347 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 applic ant 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 add i- tion 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 unsatisfi ed 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 judg ments 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) (1) 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. sfaction (2) The suspension shall not be removed until proof of sati ccord is of the judgment, or in lieu thereof, a notarized copy of an a submitted to the registrar. fies the registrar in writing within 90 days of (3) If the licensee noti 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 se c- tion. (4) 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 aut o- matically suspended. In lieu of filing th e bond required by this se c- tion, 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 acco rd 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 prov i- sions of this section can only be reinstated when proof of satisfaction

380 348 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW of all debts is made, or w hen 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 cha pter, or to the qualifications, fun c- tions, 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 procee ding. (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 satisfa c- tion of all debts, the bond requirement may be removed. (h) The board shall take the a ctions required by this section upon notification by any party having knowledge of the outstanding judg- ment upon a showing of proof of the judgment. n- (i) For the purposes of this section, the term “judgment” also i cludes any final arbitration award where t he 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) (1) If a judgment is entered against a licensee, then a qualifying person or personnel of record of the lic ensee at the time of the activ i- ties on which the judgment is based shall be automatically prohibited from serving as a qualifying individual or other personnel of record on another license until the judgment is satisfied. (2) The prohibition described in paragraph (1) shall cause the li- cense of any other existing renewable licensed entity with any of the same personnel of record as the judgment debtor licensee to be su s- pended until the license of the judgment debtor is reinstated or until el of record disassociate themselves from the r e- those same personn newable licensed entity. (k) For purposes of this section, a cash deposit may be submitted in lieu of the bond. ( l ) Notwithstanding subdivision (f), the failure of a licensee to not i- fy the registrar of an un satisfied final judgment in accordance with this section is cause for disciplinary action. Added Stats 1995 ch 467 § 6 (SB 1061). Amended Stats 1997 ch 469 § 1 (AB 772); Stats 2003 ch 363 § 1 (AB 1382); Stats 2010 ch 698 § 18 (SB 392), effective January 1, 2011; Stats 2017 ch 506 § 1 (AB 1278), effective January 1, 2018. —See Code of Civil Procedure Section 116.220 Jurisdiction of Small Claims Court, in Appendix. —See Code of Civil Procedure, Bond and Undertaking Law Sections 995.010 to 996.560 in Appendix .

381 CHAPTER 12. CONTRACT ORS LICENSE LAW 349 § 7071.18 . Report to registrar of convictions; Study of judgments, arbitration awards, settlements for construction defects in rental residential units; Contents of study (a) Notwithstanding any other law, a licensee shall report to the registrar in wr iting the occurrence of any of the following within 90 days after the licensee obtains knowledge of the event: (1) The conviction of the licensee for any felony. (2) The conviction of the licensee for any other crime that is su b- stantially related to the qu alifications, functions, and duties of a li- censed contractor. her (b) (1) The board shall consult with licensees, consumers, and ot r- interested stakeholders in order to prepare a study of judgments, a claims for bitration awards, and settlements that were the result of construction defects for rental residential units and, by January 1, 2018, shall report to the Legislature the results of this study to d e- termine if the board’s ability to protect the public as described in Se c- tion 7000.6 would be enhanced by r egulations requiring licensees to report judgments, arbitration awards, or settlement payments of those claims. Participation by licensees and consumers shall be vo l- untary. The study shall include, but not be limited to, criteria used by insurers or others to differentiate between settlements that are for nuisance value and those that are not, whether settlement info r- mation or other information can help identify licensees who may be subject to an enforcement action, if there is a way to separate subcon- ors from general contractors when identifying licensees who may tract be subject to an enforcement action, whether reporting should be li m- ited to settlements resulting from construction defects that resulted n the depar in death or injury, the practice of other boards withi t- ment, and any other criteria considered reasonable by the board. The board shall submit the report to the Legislature in accordance with Section 9795 of the Government Code. (2) Records or documents obtained by the board during the course of im plementing this subdivision that are exempt from public disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Go vernment Code) shall remain exempt from disclosure pursuant to that act . Added Stats 2016 ch 372 § 2 (SB 465), effective January 1, 2017. § 7071.19. Insurance as condition precedent to license; Aggregate limit of liability; Compliance with financial security requirements; Duties of registrar (a) As a condition of the issuan ce, reinstatement, reactivation, or continued valid use of a license under this chapter, in addition to any bond required under this article, a limited liability company shall, in accordance with this section, maintain a policy or policies of insu r-

382 350 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW ance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the contracting services it provides. (b) The total aggregate limit of liability under the policy or policies required under this section shall be as follows: of insurance (1) For a limited liability company licensee with five or fewer pe r- sons listed on the members of the personnel of record, the aggr egate limit shall not be less than one million dollars ($1,000,000). (2) For a limited liability company licensee with more than five pe r- itional sons listed on the members of the personnel of record, an add one hundred thousand dollars ($100,000) of insurance shall be o b- e licensee tained for each person listed on the personnel of record of th x- except that the maximum amount of insurance is not required to e ceed five million dollars ($5,000,000) in any one de signated period, less amounts paid in defending, settling, or di scharging claims as set forth under this section. or policies required by this section may be issued on a (c) The policy claims -made or occurrence basis, and shall cover: (1) in the case of a claims -made policy, claims initially asserted in the designated period, and (2) in the case of an occurrence policy, occurrences during the designated period. For purposes of this section, “desi gnated period” means a policy year or any other period designated in the policy that is not greater than 12 months. Any policy or policies secured to sati s- shall be written by an insurer or fy the requirements of this section insurers duly licensed by this state or an eligible surplus line insurer, with the insurance procured pursuant to Section 1765.1 of the Insu r- ance Code, and may be in a form reasonably available in the comme r- market and may be subject to those terms, conditions, cial insurance exclusions, and endorsements that are typically contained in those policies. A policy or policies of insurance maintained pursuant to this section may be subject to a deductible or self -insured retenti on. (d) The impairment or exhaustion of the aggregate limit of liability by amounts paid under any policy in connection with the settl ement, discharge, or defense of claims applicable to a designated period shall not require the licensee to acquire additio nal insurance coverage for that designated period. However, the aggregate limit of liability co v- erage (coverage limit) required by this section shall be reinstated by not later than the commencement date of the next designated period, and the license of an y licensee that fails to co mply with this provision shall be suspended by operation of law until the date that the licensee complies with the coverage limit requirements of this section. In add i- tion, the amount to which any coverage limit is depleted may be r e- ported on the license record. (e) Upon the dissolution and winding up of the company, the co m- pany shall, with respect to any insurance policy or policies then main- tained pursuant to this section, maintain or obtain an extended r e-

383 CHAPTER 12. CONTRACT ORS LICENSE LAW 351 porting period endorsem ent or equivalent provision in the max imum total aggregate limit of liability required to comply with this section r- for a minimum of three years if reasonably available from the insu er. (f) Prior to the issuance, reinstatement, or reactivation of a limited i- liability company license as provided under this chapter, the appl cant or licensee shall, in the manner prescribed by the registrar, submit the information and documentation required by this section e with the and requested by the registrar, demonstrating complianc financial security requirements specified by this section. (g) For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an autho r- ized agent or employee of the insurer, shall be submitted electronical- ly or otherwise to the registrar. The insurer issuing the cer tificate, or, e- in the case of a surplus line policy, the surplus line broker, shall r port to the registrar the following information for any policy required under this se ction: name, license number, policy number, dates that coverage is scheduled to commence and lapse, the date and amount of any payment of claims, and cancellation date if applicable. (h) Upon the issuance, reinstatement, or reactivation of a license under this section, the registrar may post the following information to the licensee’s license record on the Internet: icy (1) The name of the insurer or insurers providing the liability pol gnated or policies submitted by the licensee for the most recent desi per iod. l- (2) Any policy numbers and the sum of the aggregate limit of liabi ity provided by each. Added Stats 2010 ch 698 § 19 (SB 392), effective January 1, 2011. Amended Stats 2013 ch 114 § 1 (AB 1236), effective January 1, 2014. § 7072. Issuance of licens e Following receipt of the application fee and an application furnis h- ing complete information in the manner required by the registrar, and after such examination and investigation as he may require, the registrar, within 15 days after approval of the appli cation, shall notify the applicant that a license may be issued to him on payment of the initial license fee provided in Article 8 (commencing at Section 7135), and, when the initial license fee is paid, shall issue a license to him permitting him to engag e in business as a contractor under the terms of this chapter. Added Stats 1939 ch 37 § 1. Amended Stats 1961 ch 1636 § 3, operative October 1, 1962; Stats 1970 ch 340 § 5.

384 352 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7072.5. Issuance of pocket card ed pocket card of a (a) Upon the issuance of a license, a plasticiz size, design, and content as may be determined by the registrar shall be issued at no cost to each licensee, or to the partners, managers, officers, or responsible managing officers of licensees licensed as other than individuals, which card shall be evidence that the licensee is r- duly licensed pursuant to this chapter. All cards issued shall be su rendered 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 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. Added Stats 1988 ch 1495 § 1. Amended Stats 2006 ch 106 § 3 (AB 2457), effective January 1, 2007; Stats 2010 ch 698 § fective January 1, 2011. 20 (SB 392), ef § 7073. Grounds and procedures for denial of application; Rehabilitation and reapplication; Probationary license in lieu of denial (a) The registrar may deny any application for a license or suppl e- mental classification where the applicant has failed to comply with any rule or regulation adopted pursuant to this chapter or where there are grounds for denial under Section 480. Procedures for denial of an application shall be conducted in accordance with Section 485. (b) When the boa rd has denied an application for a license on grounds that the applicant has committed a crime substantially r e- lated to qualifications, functions, or duties of a contractor, it shall, in its decision or in its notice under subdivision (b) of Section 485, i n- form the applicant of the earliest date on which the applicant may reapply for a license. The board shall develop criteria, similar to the criteria developed to evaluate rehabilitation, to establish the earliest date on which the applicant may reapply. Th e date set by the regi s- trar shall not be more than five years from the effective date of the decision or service of notice under subdivision (b) of Section 485. (c) The board shall inform an applicant that all competent evidence of rehabilitation shall be considered upon reapplication. (d) Along with the decision or notice under subdivision (b) of Section 485, the board shall serve a copy of the criteria for rehabilitation fo r- mulated under Section 482. (e) In lieu of denying licensure as authorized under th is section, the registrar may issue an applicant a probationary license with terms and conditions. During the probationary period, if information is

385 CHAPTER 12. CONTRACT ORS LICENSE LAW 353 brought to the attention of the registrar regarding any act or omission of the licensee constituting grounds for discipline or denial of lice n- a- sure for which the registrar determines that revocation of the prob tionary license would be proper, the registrar shall notify the appli- cant to show cause within 30 days why the probationary license d- should not be revoked . The proceedings shall be conducted in accor ance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the registrar shall have all the powers granted therein. A probatio n- se shall not be renewed during any period in which any pr o- ary licen ceeding brought pursuant to this section is pending. § 11. Amended Stats 2004 ch 586 Added Stats 1983 ch 891 § 2 (AB 2216); Stats 2005 ch 280 § 7 (SB 1112), effective January 1, 2006. When application becomes void; Disposition of § 7074. application; Fee for reapplication (a) Except as otherwise provided by this section, an application for an original license, for an additional classification, or for a change of qualifier shall become void when: (1) The applicant or the examinee for the applicant has failed to achieve a passing grade in the qualifying examination within 18 months after the application has been deemed acceptable by the board. en n (2) The applicant for an original license, after having be otified to do so, fails to pay the initial license fee within 90 days from the date of the notice. (3) The applicant, after having been notified to do so, fails to file sit or within 90 days from the date of the notice any bond or cash depo nts that may be required for issuance or granting pu r- other docume suant to this chapter. (4) After filing, the applicant withdraws the application. (5) The applicant fails to return the application rejected by the board for insufficiency or incompleteness within 90 day s from the date of original notice or rejection. (6) The application is denied after disciplinary proceedings conduc t- ed in accordance with the provisions of this code. (b) The void date on an application may be extended up to 90 days or one examination may be rescheduled without a fee upon doc u- mented evidence by the applicant that the failure to complete the a p- plication process or to appear for an examination was due to a med i- cal emergency or other circumstance beyond the control of the appl i- cant. (c) An application voided pursuant to this section shall remain in the possession of the registrar for the period as he or she deems nec-

386 354 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW essary and shall not be returned to the applicant. Any reapplication for a license shall be accompanied by the fee fixed by this chapter. § 59 (SB 724); Stats 2016 ch § 13. Amended Stats 2001 ch 728 Added Stats 1983 ch 891 § 4 (SB 1479), effective January 1, 2017. 634 § 7075. Display of license The license shall be displayed in the licensee ’s main office or chief place of business . Satisfactory evidence of the possession of a license and the current renewal thereof shall be provided by the licensee u p- on demand. § 1. Amended Stats 1961 ch 1636 Added Stats 1939 ch 37 § 4, operative October 1, 3; Stats 1971 ch 716 § 4 (AB 1962; Stats 1963 ch 1016 § § 104; Stats 1990 ch 1326 3480), effective September 25, 1990. Nontransferability of license § 7075.1. (a) No license, regardless of type or classification, shall be transfe r- able 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 Se c- tion 7141, only under the following circumstances: (1) To an individual upon application. ion if there is no change in the (2) To a partnership upon applicat 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 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 Secr etary 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 co r- poration, or the corporation has changed its filing status with the Secretary of State from a domestic corporation to a foreign corpor a- tion or from a foreign corporation to a dom estic 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 li ability company has merged or created a subsidiary, the subsidiary has merged into the parent limited liability company, or the limited liabil- ity 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 d omestic

387 CHAPTER 12. CONTRACT ORS LICENSE LAW 355 limited liability company, and the new entity is being formed to co n- tinue the business of the formerly licensed limited liability company. (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 bus i- ness. (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 bus iness. a- (5) To a corporation or limited liability company when the corpor tion or limited liability company is formed by an individual licensee and the individual licensee maintains ownership directly or indirec tly of shares or membership interests evidencing more than 50 percent of the voting power. (6) To a limited liability company that is formed by a corpor ation to continue the business of the corporation subsequent to the cancell a- ’s license, provided the personnel listed for tion of the corporate entity each entity are the same. (d) 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, st epdaughter, gran d- son, granddaughter, son -in-law, or daughter -in-law. Added Stats 1990 ch 1326 § 4.5 (AB 3480), effective September 25, 1990. Amended § 2 (AB 2424); Stats 2010 ch 698 Stats 1992 ch 746 § 21 (SB 392), effective January 1, 2011; Stats 2017 ch 573 § 29 (SB 800), effective January 1, 2018. § 7076. Events resulting in cancellation of license; Continuance of license r- (a) An individual license shall be canceled upon the death of a pe son 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 reason a- ble amount of time to be determined by rules of the board. The r e- quest for a continuance must be made in writing and rece ived 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 t hat requirement. The immed i- ate 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 ge n- eral partner. The remaining partn er or partners shall notify the re g- istrar 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.

388 356 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW The remaining general partner or partners may request a contin u- ance 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 u- and obtain a new license to continue contracting after the contin ance expires. (c) A partnership license shall be canceled upon the disassociation r or upon the dissolution of the partnership. The of a general partne disassociating partner or the remaining partner or partners shall n o- tify the registrar in writing within 90 days of the disassociation of a general partner or dissolution of the partnership. Failure to noti fy the registrar of the disassociation or dissolution within 90 days shall cause the license to be canceled effective the date the written notific a- tion is received at the board's headquarters office. Failure to notify the registrar within 90 days of the di sassociation or dissolution is grounds for disciplinary action. The remaining general partner or partners may request a continuance of the license to complete pr o- jects contracted for or in progress prior to the date of disassoci ation or dissolution for a r easonable 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 disc i- plinary action. The death of a limited partner will not affect the partnership l i- cense 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 o- may request a continuance of the license to complete projects in pr gress 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 co n- tracting after the continuance expires. (e) The general partner or partners shall notify the registrar in writing within 90 days of the disassociation of a limite d partner. Failure to notify the registrar of the disassociation, within 90 days,

389 CHAPTER 12. CONTRACT ORS LICENSE LAW 357 shall cause the disassociation to be effective the date the written not i- fication is received at the board's headquarters office. Failure to not i- fy the registrar within 90 day s of the disassociation is grounds for disciplinary action. The disassociation of a limited partner will not affect the partne r- t- ship license unless the partnership license has only one limited par ner. In this case, the license will be canceled upon the dis association 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 s contracted for or in progress prior of the license to complete project e- to the date of disassociation for a reasonable amount of time to be d termined by rules of the board. The request for a continuance must be made in writing and received at the board's headquarters office wit h- in 90 days after the disassociation. 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 cancellatio n, revocation, or disassociation of any of its entity licenses or upon the dissolution of the joint venture. The registrar shall be notified in writ- ing within 90 days of the disassociation of a joint venture entity or dissolution of the joint venture. Fail ure 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 day s 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 remain- ing entity or entities m ust apply for and obtain a new license to u n- dertake 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 o f 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

390 358 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW to notify the board of the dissolution, merger, or surrender, the corp o- ration 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 t r- he dissolution, me ger, 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 shall notify the registrar in this state. The limited liability company 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 notifi cation is received at the board's headquarters office. If the limited liability company fails to notify the board of the dissolu- tion, merger, or surrender, the limited liability company license shall earching the be canceled 60 days after the board's discovery when res records of the Secretary of State. Failure to notify the registrar within 90 days of the dissolution, merger, or surrender is grounds for disc i- plinary action. (j) The registrar shall review and accept the petition of a licensee who disputes th e 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. Added Stats 1995 ch 467 § 8 (SB 1061). Amended Stats 2010 ch 698 § 22 (SB 392), e f- fective January 1, 2011; S tats 2012 ch 661 § 11 (SB 1576), effective January 1, 2013. Voluntary surrender of license § 7076.1. s- Upon the voluntary surrender of a license by a licensee, the regi p- trar shall order the license canceled. Cancellation will be effected u on receipt of th e request by the registrar. No refund will be made of any fee which a licensee may have paid prior to the surrender of the license. To reinstate a canceled license the licensee must pay all of the fees and meet all of the qualifications and requirements se t forth in this chapter for obtaining an original license. Added Stats 1975 ch 329 § 1. § 7076.2. Suspension for failure to be registered and in good standing after notice; Personal liability (a) Notwithstanding any other provision of law, the failure of a co n- tractor licensed to do business as a corporation or 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 license by o peration of law. The registrar shall notify the licensee in writing of its failure to be registered and in

391 CHAPTER 12. CONTRACT ORS LICENSE LAW 359 good standing with the Secretary of State and that the licensee shall be suspended 30 days from the date of the notice if the licensee does s- not provi de proof satisfactory to the registrar that it is properly regi e- tered and in good standing with the Secretary of State. Reinstat ment may be made at any time following the suspension by providing s- proof satisfactory to the registrar that the license is prop erly regi tered and in good standing. (b) Where the license of a limited liability company is suspended pursuant to subdivision (a), each person within the company ident i- l- fied in Section 7028.5 shall be personally liable up to one million do n- lars ($1,000,000) each for damages resulting to third parties in co ’s performance, during the period of suspe nection with the company n- sion, of any act or contract where a license is required by this chapter. This personal liability shall not apply where there has been s ubsta n- tial compliance with the licensure requirements, as described in su b- division (e) of Section 7031. Added Stats 1995 ch 467 § 9 (SB 1061). Amended Stats 2010 ch 698 § 23 (SB 392), e f- fective January 1, 2011. § 7076.5. Inactive license certificate; Rei nstatement; Holder not entitled to practice (a) A contractor may inactivate his or her license by submitting a form prescribed by the registrar accompanied by the current active license certificate. When the current license certificate has been lost, icensee shall pay the fee prescribed by law to replace the license the l certificate. Upon receipt of an acceptable application to inactivate, the registrar shall issue an inactive license certificate to the contractor. The holder of an inactive license shall no t be entitled to practice as a contractor until his or her license is reactivated. (b) Any licensed contractor who is not engaged in work or activities which require a contractor ’s license may apply for an inactive li cense. (c) Inactive licenses shall be v alid for a period of four years from their due date. (d) During the period that an existing license is inactive, no bonding requirement pursuant to Section 7071.6, 7071.8 or 7071.9 or qualifier requirement pursuant to Section 7068 shall apply. An applicant for license having met the qualifications for issuance may request that the license be issued inactive unless the applicant is subject to the provisions of Section 7071.8. (e) The board shall not refund any of the renewal fee which a lice n- see may have paid prior to the inactivation of his or her license. (f) An inactive license shall be renewed on each established renewal date by submitting the renewal application and paying the inactive renewal fee.

392 360 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (g) An inactive license may be reactivated by submitting an applic a- tion acceptable to the registrar, by paying the full renewal fee for an active license and by fulfilling all other requirements of this chapter. No examination shall be required to reactivate an inactive license. (h) The inactive status of a lic ense shall not bar any disciplinary ac- tion by the board against a licensee for any of the causes stated in this chapter. Added Stats 1983 ch 891 § 18. Amended Stats 1987 ch 875 § 1. Original license probationary; Revocation § 7077. Every original license , except an additional classification issued pursuant to Section 7059, shall be a probationary license until such time as the license is renewed. If information is brought to the atte n- tion of the registrar, during such probationary period, regarding any act or omission of the licensee constituting grounds for denial, revoc a- g- tion, or suspension of an application or license, such that, in the re ’s discretion, it would be proper to revoke the probationary l i- istrar cense, the registrar shall forthwith notify the applicant to show cause within not more than 30 days, why the probationary license should not be revoked. The proceedings shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the regi s- icense trar shall have all the powers granted therein. A probationary l shall not be renewed during the pendency of any proceedings brought pursuant to this section. § 15. Added Stats 1979 ch 1013 Article 6 Records § 7080.5. Public posting following acceptance of applic ation When an application has been accepted by the registrar, the name and address of the applicant, every classification for which the appl i- cant has applied, and the names and titles of all personnel w ho have signed the application shall be publicly posted by the registrar, on the day following acceptance, in the office of the Contractors ’ State Li- cense Board in Sacramento. Added Stats 1984 ch 1252 § 2. § 7081. List of contractors Whenever funds are a vailable for the purpose, the registrar shall publish a list of the names and addresses of contractors, registered under this chapter and of the licenses issued, suspended or revoked,

393 CHAPTER 12. CONTRACT ORS LICENSE LAW 361 and such further information with respect to this chapter and its a d- ministration as he deems proper. He may furnish the lists to such public works and building depar t- ments, public officials or public bodies, and other persons interested in or allied with the building and construction industry in this or any other State as he d eems advisable and, at such intervals as he deems necessary whenever funds are available. Copies of the lists may also be furnished by the registrar upon r e- quest to any firm or individual upon payment of a reasonable fee fixed by the registrar. 1939 ch 37 Added Stats § 1. Publication and distribution of information of industry § 7082. Whenever funds are available for the purpose, the registrar may publish and disseminate to licentiates of the board, and public off i- cials or other persons interested in or a llied with the building and construction industry, such information with relation to the admi n- istration and enforcement of this chapter as he deems necessary to carry out its purposes. Added Stats 1939 ch 37 § 1. § 7083. Notification by licensees of chan ges in recorded information (a) Notwithstanding any other law, licensees shall notify the regis- trar, on a form prescribed by the registrar, in writing within 90 days of any change to information recorded under this chapter. This notifi- cation requirement sh all include, but not be limited to, changes in business address, personnel, business name, qualifying individual bond exemption pursuant to Section 7071.9, or exemption to qualify multiple licenses pursuant to Section 7068.1. (b) Failure of the licensee to notify the registrar of any change to i n- formation within 90 days shall cause the change to be effective the date the written notification is received at the board’s headquarters office. (c) Failure to notify the registrar of the changes within the 90 days is grounds for disciplinary action. Added Stats 1983 ch 891 § 21. Amended Stats 1984 ch 1174 § 5; Stats 1986 ch 27 § 4; Stats 1990 ch 1326 § 7 (AB 3480), effective September 25, 1990; Stats 2004 ch 865 § 12 (SB 1914); Stats 2015 ch 430 § 5 (AB 181), effec tive January 1, 2016.

394 362 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7083.1. Notification of registrar of change of address of licensee whose license is expired, suspended, or cancelled A licensee whose license is expired or suspended, and is renewable ed, shall notify the re g- under Section 7141, or whose license is cancel istrar in writing of a change of address of record within 90 days, and -year period shall maintain a current address of record during the five immediately following the expiration or cancellation of the license. § 6, effective September 22, 1987. Amended Stats 2007 ch 240 Added Stats 1987 ch 930 § 2 (AB 936), effective January 1, 2008. Rules and regulations to carry out article § 7084. The registrar, with the approval of the director may adopt and promulgate the rules and regulation s he deems necessary to carry out the provisions of this article. Added Stats 1939 ch 37 § 1. Article 6.2 Arbitration § 7085. Referral to arbitration; Conditions (a) After investigating any verified complaint alleging a violation of Section 7107, 7109, 7110, 7113, 7119, or 7120, and any complaint arising from a contract involving works of improvement and finding a possible violation, the registrar may, with the concurrence of both the licensee and the complainant, refer the alleged violation, and any dis pute between the licensee and the complainant arising thereunder, to arbitration pursuant to this article, provided the registrar finds that: (1) There is evidence that the complainant has suffered or is likely to suffer material damages as a result of a v iolation of Section 7107, 7109, 7110, 7113, 7119, or 7120, and any complaint arising from a contract involving works of improvement. (2) There are reasonable grounds for the registrar to believe that the public interest would be better served by arbitratio n than by di s- ciplinary action. (3) The licensee does not have a history of repeated or similar viol a- tions. (4) The licensee was in good standing at the time of the alleged vi o- lation. (5) The licensee does not have any outstanding disciplinary actions filed against him or her. (6) The parties have not previously agreed to private arbitration of the dispute pursuant to contract or otherwise.

395 CHAPTER 12. CONTRACT ORS LICENSE LAW 363 (7) The parties have been advised of the provisions of Section 2855 of the Civil Code. ” means da ), “material damages For the purposes of paragraph (1 m- ages greater than the amount of the bond required under subdivision (a) of Section 7071.6, but less than fifty thousand dollars ($50,000). (b) In all cases in which a possible violation of the sections set forth in paragraph (1) of subdivision (a) exists and the contract price, or the demand for damages is equal to or less than the amount of the bond required under Section 7071.6, but, regardless of the contract price, the complaint shall be referred to arbitration, utilizing the criteria set forth in paragraphs (2) to (6), inclusive, of subdivision (a). § 16. Amended Stats 1987 ch 1311 Added Stats 1979 ch 1013 § 1, effective September 28, 1987; Stats 1989 ch 1132 § § 1 2, effective September 29, 1989; Stats 1992 ch 597 ); Stats 1998 ch 492 § § 1 (AB 728); Stats 2004 (AB 497 1 (SB 1792); Stats 2002 ch 312 § 13 (SB 1914); Stats 2005 ch 280 § 8 (SB 1112), effective January 1, 2006. ch 865 Arbitrator ’s award deemed award of registrar § 7085.2. An arbitrator may render an award and that award shall be deemed to be an order of the registrar. Added Stats 1987 ch 1311 § 2, effective September 28, 1987. Notice; Consequences of election; Right to r § 7085.3. etain counsel; Agreement to arbitrate Once the registrar determines that arbitr ation pursuant to subdiv i- sion (a) of Section 7085 would be a suitable means of resolving the dispute, the registrar shall notify the complainant and the licensee of this decision. The registrar shall also notify the complainant of the consequences of selec ting administrative arbitration over judicial remedies and advise the parties of their rights to retain counsel at their own expense. The registrar shall forward an “ agreement to arb i- trate ” to the complainant and the licensee. This agreement shall be retur ned to the registrar within 30 calendar days of the date that the agreement is mailed by the registrar. The return of this agreement by the parties shall authorize the registrar to proceed with administr a- tive arbitration. Added Stats 1979 ch 1013 § 16. Ame nded Stats 1987 ch 1311 § 3, effective September 28, 1987; Stats 1989 ch 1132 § 3, effective September 29, 1989. § 7085.4. Referral of agreement to arbitrate to arbitrator or arbitration association; Notification of complainant and licensee (a) For cases that the registrar determines to refer to arbitration under subdivision (a) of Section 7085, once the complainant and the

396 364 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW licensee authorize the registrar to proceed with administrative arb i- tration, the registrar shall refer the agreement to arbitrate to an arbi- trator or an arbitration association approved by the board. (b) Once the registrar determines that a complaint must be referred to arbitration pursuant to subdivision (b) of Section 7085, the regis- trar shall notify the complainant and the licensee o f that decision. The registrar shall inform the parties of the consequences of admini s- trative arbitration over judicial remedies and shall advise the parties of their right to retain counsel at their own expense if they so choose. The registrar shall forward a notice to arbitrate to the complainant and the licensee. This notice shall be returned to the registrar within 30 calendar days of the date that the notice is mailed by the registrar. The complainant ’s failure to return an executed copy of the notice shall result in the closure of the complaint. ’s failure to return an Notwithstanding Section 7085.5, a licensee executed copy of the notice shall not prohibit the registrar from refer- ring the dispute to arbitration or bar the registrar from issuing an r enforcing any award resulting therefrom, pursuant to Section orde 7085.6, whether the award resulted from a contested hearing or a noncontested hearing. Added Stats 1979 ch 1013 § 16. Amended Stats 1987 ch 1311 § 4, effective September 28, 1987; Stats 1989 ch 1132 § 4, effective September 29, 1989. § 7085.5. Rules of conduct for arbitrations; court proc edure and exclusion of liability Arbitrations of disputes arising out of cases filed with or by the board shall be conducted in accordance with the following rules: agreements to arbitrate ” shall include the names, addres (a) All “ s- es, and telephone numbers of the parties to the dispute, the i ssue in dispute, and the amount in dollars or any other remedy sought. The appropriate fee shall be paid by the board fro m the Contractors ’ Li- cense Fund. (b)(1) The board or appointed arbitration association shall appoint an arbitrator in the following manner: immediately after the filing of the agreement to arbitrate, the board or appointed arbitration assoc i- ation shall submit simultaneously to each party to the dispute, an identical list of names of persons chosen from the panel. Each party to the di spute shall have seven days from the mailing date in which to cross off any names to which it objects, number the remaining na mes to ind icate the order of preference, and return the list to the board or ap pointed arbitration association. If a party does not return the list within the time specified, all persons named in the list are acceptable. From among the persons who have been approved on both lists, and in accordance with the designated order of mutual prefe r- ence, the board or appointed arbitration association shall appoint an

397 CHAPTER 12. CONTRACT ORS LICENSE LAW 365 arbitrator to serve. If the parties fail to agree on any of the parties named, if acceptable arbitrators are unable to act, or if, for any other reason, the appointment cannot be made from the submitted lists, the board or appointed arbitration association shall have the power to make the appointment from among other members of the panel wit h- out the subm ission of any additional lists. Each dispute shall be heard and determined by one arbitrator unless the board or appoin t- ed arbitration association, in its discretion, directs that a greater number of arbitrators be appointed. mplaint has been referred to arbitr a- (2) In all cases in which a co tion pursuant to subdivision (b) of Section 7085, the board or the a p- pointed arbitration association shall have the power to appoint an arbitrator to hear the matter. (3) The board shall adopt regulations setting minimum qualification standards for listed arbitrators based upon relevant training, exper i- ence, and performance. (c) No person shall serve as an arbitrator in any arbitration in which that person has any financial or personal interest in the result of the arbitr ation. Prior to accepting an appointment, the prospective arbitrator shall disclose any circumstances likely to prevent a prompt hearing or to create a presumption of bias. Upon receipt of that i n- formation, the board or appointed arbitration association sh all imm e- diately replace the arbitrator or communicate the information to the parties for their comments. Thereafter, the board or appointed arb i- tration association shall determine whether the arbitrator should be disqualified and shall inform the parties o f its decision, which shall be conclusive. (d) The board or appointed arbitration association may appoint an- other arbitrator if a vacancy occurs, or if an appointed arbitrator is unable to serve in a timely manner. association shall provide (e)(1) The board or appointed arbitration the parties with a list of the times and dates, and locations of the hearing to be held. The parties shall notify the arbitrator, within se v- en calendar days of the mailing of the list, of the times and dates co n- venient to each pa rty. If the parties fail to respond to the arbitr ator within the seven -day period, the arbitrator shall fix the time, place, and location of the hearing. An arbitrator may, at the arbitr ator ’s sole discretion, make an inspection of the construction site wh ich is the subject of the arbitration. The arbitrator shall notify the parties of the time and date set for the inspection. Any party who so desires may be present at the inspection. (2) The board or appointed arbitration association shall fix the time, place, and location of the hearing for all cases referred to arbitration pursuant to subdivision (b) of Section 7085. An arbitrator may, at the arbitrator ’s sole discretion, make an inspection of the construction site which is the subject of the arbitration. The arbitrator shall notify

398 366 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW the parties of the time and date set for the inspection. Any party who desires may be present at the inspection. (f) Any person having a direct interest in the arbitration is entitled otherwise have the power to attend the hearing. The arbitrator shall to require the exclusion of any witness, other than a party or other essential person, during the testimony of any other witness. It shall be discretionary with the arbitrator to determine the propriety of the attendance of any ot her person. (g) Hearings shall be adjourned by the arbitrator only for good cause. (h) A record is not required to be taken of the proceedings. However, x- any party to the proceeding may have a record made at its own e pense. The parties may make appropriate notes of the procee dings. (i) The hearing shall be conducted by the arbitrator in any manner which will permit full and expeditious presentation of the case by both parties. Consistent with the expedited nature of arbitration, the arbitrator shall establi sh the extent of, and schedule for, the produ c- tion of relevant documents and other information, the identification of any witnesses to be called, and a schedule for any hearings to elicit y facts solely within the knowledge of one party. The complaining part shall present its claims, proofs, and witnesses, who shall submit to questions or other examination. The defending party shall then pr e- sent its defenses, proofs, and witnesses, who shall submit to que stions or other examination. The arbitrator has discre tion to vary this pr o- cedure but shall afford full and equal opportunity to the parties for the presentation of any material or relevant proofs. (j) The arbitration may proceed in the absence of any party who, a f- ter due notice, fails to be present. The arbi trator shall require the a t- tending party to submit supporting evidence in order to make an award. An award for the attending party shall not be based solely on the fact that the other party has failed to appear at the arbitration hearing. r shall be the sole judge of the relevancy and mat e- (k) The arbitrato riality of the evidence offered and conformity to legal rules of evidence shall not be required. l ( ) The arbitrator may receive and consider documentary evidence. tor may be submitted prior Documents to be considered by the arbitra to the hearing. However, a copy shall be simultaneously transmitted to all other parties and to the board or appointed arbitration associ a- tion for transmittal to the arbitrator or board appointed arbitr ator. (m) The arbitrator sh all specifically inquire of the parties whether they have any further proofs to offer or witnesses to be heard. Upon receiving negative replies, the arbitrator shall declare the hearing closed and minutes thereof shall be recorded. If briefs are to be filed, the hearing shall be declared closed as of the final date set by the ar- bitrator for the receipt of briefs. If documents are to be filed as r e-

399 CHAPTER 12. CONTRACT ORS LICENSE LAW 367 quested by the arbitrator and the date set for their receipt is later than that set for the receipt of briefs, t he later date shall be the date of closing the hearings. The time limit within which the arbitrator is required to make the award shall commence to run, in the absence of other agreements by the parties, upon the closing of the hearings. ’s own m otion. (n) The hearing ma y be reopened on the arbitrator (o) Any party who proceeds with the arbitration after knowledge that any provision or requirement of these rules has not been com- plied with, and who fails to state his or her objections to the arbitr a- ting, within 10 calendar days of close of hearing, shall be tor in wri deemed to have waived his or her right to object. (p)(1) Except as provided in paragraph (2), any papers or process necessary or proper for the initiation or continuation of an arbitration hese rules and for any court action in connection therewith, or under t for the entry of judgment on an award made thereunder, may be served upon any party (A) by regular mail addressed to that party or ’s last known address, or (B) by pe his or her attorney at the party r- sonal service. (2) Notwithstanding paragraph (1), in all cases referred to arbitr ation pursuant to subdivision (b) of Section 7085 in which the contra ctor fails or refuses to return an executed copy of the notice to arb itrate within the time specifi ed, any papers or process specified in paragraph (1) to be sent to the contractor, including the notice of hearing, shall be mailed by certified mail to the contractor ’s address of record. (q) The award shall be made promptly by the arbitrator, and unless otherwise agreed by the parties, no later than 30 calendar days from the date of closing the hearing, closing a reopened hearing, or if oral hearing has been waived, from the date of transmitting the final statements and proofs to the arbitrator. rator may for good cause extend any period of time esta b- The arbit lished by these rules, except the time for making the award. The arb i- trator shall notify the parties of any extension and the reason ther efor. (r)(1) The arbitrator may grant any remedy or relief that the arb i- trator deems just and equitable and within the scope of the board’ s referral and the requirements of the board. The arbitrator, in his or her sole discretion, may award costs or expenses. (2) The amendments made in paragraph (1) during the 2003 –04 Regular Session shall not be interpreted to prevent an arbitrator from awarding a complainant all direct costs and expenses for the comple- tion or repair of the project. (s) The award shall become final 30 calendar days from the date the arbitration award is issued. The arbitrator, upon written application of a party to the arbitration, may correct the award upon the follo w- ing grounds:

400 368 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (1) There was an evident miscalculation of figures or an evident mistake in the description of any person, things, or prope rty referred to in the award. (2) There is any other clerical error in the award, not affecting the merits of the controversy. An application for correction of the award shall be made within 10 calendar days of the date of service of the award by serving a copy of a- the application on the arbitrator, and all other parties to the arbitr tion. Any party to the arbitration may make a written objection to the application for correction by serving a copy of the written objection on the arbitrator, the board, and all other parties to the arbitration, within 10 calendar days of the date of service of the application for correction. The arbitrator shall either deny the application or correct the award within 30 calendar days of the date of service of the original d by mailing a copy of the denial or correction to all parties to awar the arbitration. Any appeal from the denial or correction shall be filed with a court of competent jurisdiction and a true copy thereof shall be ation association within filed with the arbitrator or appointed arbitr 30 calendar days after the award has become final. The award shall be in writing, and shall be signed by the arbitrator or a majority of them. If no appeal is filed within the 30 -calendar day period, it shall become a final order o f the registrar. (t) Service of the award by certified mail shall be effective if a cert i- fied letter containing the award, or a true copy thereof, is mailed by the arbitrator or arbitration association to each party or to a party ’s eir last known address, address of record, or attorney of record at th by personally serving any party. Service may be proved in the man- ner authorized in civil actions. (u) The board shall pay the expenses of one expert witness appoin t- witness are r ed by the board when the services of an expert equested by either party involved in arbitration pursuant to this ar ticle and the case involves workmanship issues that are itemized in the co m- plaint and have not been repaired or replaced. Parties who choose to present the findings of anothe r expert witness as evidence shall pay for those services. Payment for expert witnesses appointed by the board shall be limited to the expert witness costs for inspection of the tness’ problem at the construction site, preparation of the expert wi report, a nd expert witness fees for appearing or testifying at a hea r- ing. All requests for payment to an expert witness shall be su bmitted on a form that has been approved by the registrar. All r equests for payment to an expert witness shall be reviewed and ap prove d by the board prior to payment. The registrar shall advise the parties that names of industry experts may be obtained by requesting this info r- mation from the registrar.

401 CHAPTER 12. CONTRACT ORS LICENSE LAW 369 (v) The arbitrator shall interpret and apply these rules insofar as they relate to his or her powers and duties. (w) The following shall apply as to court procedure and exclusion of liability: a- (1) The board, the appointed arbitration association, or any arbitr tor in a proceeding under these rules is not a necessary party in judi- cial procee dings relating to the arbitration. (2) Parties to these rules shall be deemed to have consented that judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof. ciation, or any arbitr (3) The board, the appointed arbitration asso a- tor is not liable to any party for any act or omission in connection with any arbitration conducted under these rules. § 5, effective September 28, 1987. Amended Stats 1988 ch Added Stats 1987 ch 1311 160 § 3; Stats 1989 ch 1132 § 5, effective September 29, 1989; Stats 1998 ch 492 § 2 (SB 1792); Stats 2003 ch 363 § 2 (AB 1382). § 7085.6. Failure to comply with award as grounds for automatic suspension; Appeal; Reinstatement; Delay in revocation for good cause; Dissociation from other licensee (a)(1) The failure of a licensee to comply with an arbitration award rendered under this article shall result in the automatic su spension 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 wit h- in 15 calendar days after service of the notice by written notice to the registrar. (4) Reinstatement may be made at any time following the suspe n- sion 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 ot h- er contractor’ ically s license issued to the licensee shall be automat revoked by operation of law for a period to be determined by the reg- istrar pursuant to Section 7102. (5) The registrar may delay, for goo d cause, the revocation of a co n- tractor ’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 t o the registrar in writing prior to the date of the revoc ation 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

402 370 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW delay of the revocation shall expire upon the effec tive date of the rev- ocation 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 ind i- vidual of another licensee, for the period de termined by the registrar h- and the employment, election, or association of that person by anot er licensee shall constitute grounds for disciplinary action. A qualifier disassociated pursuant to this section shall be replaced within 90 disassociation. Upon failure to replace the qua l- days from the date of ifier within 90 days of the disassociation, the license of the other l i- ’s classific censee shall be automatically suspended or the qualifier a- tion removed at the end of the 90 days. Added Stats 1979 ch 1013 § 16. Amended Stats 1987 ch 1311 § 6, effective September 28, 1987; Stats 1988 ch 1619 § § 3 2, effective September 30, 1988; Stats 2003 ch 363 (AB 1382); Stats 2010 ch 698 § 24 (SB 392), effective January 1, 2011. § 7085.7. Enforcement of award A complain ant may enforce an arbitrator ’s award in accordance with Chapter 2 (commencing with Section 1285) of Title 9 of Part 3 of the Code of Civil Procedure. § 8, effective September 28, 1987. Added Stats 1987 ch 1311 § 7085.9. Disclosure to public of complaint referred to arbitration Notwithstanding any other provision of law, a complaint referred to arbitration pursuant to Section 7085 is not subject to disclosure to the public until such time as an investigation into an alleged violation of Section 7085.6 has been initiated by the registrar. Added Stats 1988 ch 1035 § 2. Article 7 Disciplinary Proceedings § 7090. Investigation, suspension, revocation; Construction without permit as violation; Burden of proof The registrar may upon his or her own motion and shall upon the verified complaint in writing of any person, investigate the actions of any applicant, contractor, or home improvement salesperson within the state and may deny the licensure or the renewal of licensure of, or cite, temporarily suspend, or p ermanently revoke any license or regi s- tration if the applicant, licensee, or registrant, is guilty of or commits any one or more of the acts or omissions constituting causes for disc i- plinary action.

403 CHAPTER 12. CONTRACT ORS LICENSE LAW 371 The registrar may proceed to take disciplinary action as in this a r- ticle provided against an applicant or a person licensed or registered under the provisions of this chapter even though the grounds or cause for such disciplinary action arose upon projects or while the appl i- cant, licensee, or registrant was acting in a capacity or under circu m- stances or facts which, under the provisions of Sections 7044, 7045, 7046, and 7048, would otherwise exempt the person or his or her op- erations from the provisions of this chapter. Notwithstanding any provision of this chapt er, if the registrar finds that any contractor licensed or registered under the provisions of this chapter has willfully and deliberately violated any state or local law b- relating to the issuance of building permits, other than failure to o city permit for repair, maintenance, and adjustment tain a county or l- of equipment where such repair, maintenance, or adjustment is va ued at less than five hundred dollars ($500) for labor or materials, or where the repair of a part or component part of mechanical equi p- me nt consists of replacing such part or component part of mechanical equipment in need of repair with the identical part or component part, the registrar shall take disciplinary action against the contrac- ’s license in accordance with this chapter. tor For the purpose of this section, there shall be a rebuttable pr e- sumption affecting the burden of proof that construction performed without a permit is a willful and deliberate violation. For the purposes of this section, with respect to administrative pr o- or hearings to suspend or revoke a contractor ceedings ’s license, the registrar at all times shall have the burden of proof to establish by clear and convincing evidence that he or she is entitled to the relief sought in the petition. § 1. A mended Stats 1941 ch 971 Added Stats 1939 ch 37 § 3.5; § 15; Stats 1972 ch 1138 Stats 1974 ch 717 § 1; Stats 1975 ch 772 § 1; Stats 1984 ch 1174 § 6; Stats 1997 ch 334 § 2 (SB 299); Stats 2010 ch 698 § 25 (SB 392), effective January 1, 2011. § 7090.1. Automatic suspension of l icense for failure to pay civil penalty or comply with order of correction; Contest of determination; Reinstatement; Delay in revocation for good cause; Dissociation from other licensee (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 or- der to pay a specified sum to an injured party in lieu of correction once the order has become final, shall result in the automatic suspe n- sion 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.

404 372 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (3) The licensee may contest the determination of noncompliance within 15 days after service of the notice, by written notice to the reg- istrar. Upon receipt of the written notice, the registrar may reconsi d- er the determination and after reconsideration may affirm or set n. aside the suspensio (4) Reinstatement may be made at any time following the suspe n- sion by complying with the final order of the citation. If no reinstat e- ment of the license is made within 90 days of the date of the automa t- ic suspension, the cited license and any other cont ractors ’ license is- sued to the licensee shall be automatically revoked by oper ation 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 con- tractor ilure to comply with the final order of the cit a- ’s license for fa tion. 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 o f 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 effe ctive 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 qualif y- ing 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. A quali- fier disassociated pursuant to this section shall be replaced within 90 he qu alifier days of the date of disassociation. Upon failure to replace t within 90 days of the prohibition, the license of the other licensee shall be automatically suspended or the qualifier ’s classification r e- moved at the end of the 90 days. Added Stats 1984 ch 1174 § 7. Amended Stats 1986 ch 27 § 5; Stats 1987 c h 831 § 1; Stats 1988 ch 1619 § 3, effective September 30, 1988; Stats 2003 ch 363 § 4 (AB 1382); Stats 2004 ch 865 § 14 (SB 1914); Stats 2010 ch 698 § 26 (SB 392), effective January 1, 2011. § 7090.5. Effect of correction of condition caused by fraudule nt act In the event a licensee commits a fraudulent act which is a ground for disciplinary action under Section 7116 of this article, the corre ction of any condition resulting from such act shall not in and of itself pr e- clude the registrar from taking disc iplinary action under this art icle. If the registrar finds a licensee has engaged in repeated acts which would be grounds for disciplinary action under this article, and if by correction of conditions resulting from those acts the licensee avoided disciplinary action as to each individual act, the correction of those

405 CHAPTER 12. CONTRACT ORS LICENSE LAW 373 conditions shall not in and of itself preclude the registrar from taking disciplinary action under this article. § 1. § 1. Amended Stats 1978 ch 985 Added Stats 1953 ch 576 Filing com plaints and disciplinary actions § 7091. (a)(1) A complaint against a licensee alleging commission of any p a- tent acts or omissions that may be grounds for legal action shall be filed in writing with the registrar within four years after the act or omission alleged as the ground for the disciplinary action. i- (2) A disciplinary action against a licensee relevant to this subdiv tlined in sion shall be filed or a referral to the arbitration program ou ent act Section 7085 shall be referred within four years after the pat a- or omission alleged as the ground for disciplinary action or arbitr tion or within 18 months from the date of the filing of the complaint with the registrar, whichever is later. (b)(1) A complaint against a licensee alleging commission of any la- tent acts o uant r omissions that may be grounds for legal action purs to subdivision (a) of Section 7109 regarding structural defects, as de- fined by regulation, shall be filed in writing with the registrar within 10 years after the act or omission alleged as the groun d for the disc i- plinary action. (2) A disciplinary action against a licensee relevant to this subdiv i- sion shall be filed within 10 years after the latent act or omission al- leged as the ground for disciplinary action or within 18 months from hever is the date of the filing of the complaint with the registrar, whic later. As used in this subdivision “ latent act or omission ” means an ction. act or omission that is not apparent by reasonable inspe (c) A disciplinary action alleging a violation of Section 7112 shall be filed within two years after the discovery by the registrar or by the board of the alleged facts constituting the fraud or misrepresentation prohibited by the section. (d) With respect to a licensee who has been convicted of a crime and, as a result o f that conviction is subject to discipline under Se c- tion 7123, the disciplinary action shall be filed within two years after the discovery of the conviction by the registrar or by the board. (e) A disciplinary action regarding an alleged breach of an expre ss, written warranty issued by the contractor shall be filed not later than 18 months from the expiration of the warranty. (f) The proceedings under this article shall be conducted in accor d- ance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the registrar shall have all the powers granted therein. (g) Nothing in this section shall be construed to affect the liability of a surety or the period of limitations prescribed by law fo r the co m- mencement of actions against a surety or cash deposit.

406 374 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1939 ch 37 § 5; § 1. Amended Stats 1945 ch 886 § 2; Stats 1955 ch 1532 1, ch 1210 § 5, effe c- § 1; Stats 1980 ch 865 § § 2; Stats 1987 ch 1264 Stats 1963 ch 1258 2 (AB 3302); Stats 2001 ch 728 § tive September 28, 1 987; Stats 1994 ch 1135 § 60 (SB 3 (AB 728); Stats 2007 ch 85 § 1 (AB 243), effective January 724); Stats 2002 ch 312 § 1, 2008. Decision of registrar § 7095. The decision may: nsion by the licensee of (a) Provide for the immediate complete suspe ision. all operations as a contractor during the period fixed by the dec (b) Permit the licensee to complete any or all contracts shown by competent evidence taken at the hearing to be then uncompleted. (c) Impose upon the licensee compliance with such specific condi- tions as may be just in connection with his operations as a contractor disclosed at the hearing and may further provide that until such co n- ditions are complied with no application for restoration of the su s- pended or revok ed license shall be accepted by the registrar. Added Stats 1939 ch 37 § 1. § 7096. “ Licensee” licensee For the purposes of this chapter, the term “ ” shall include an individual, partnership, corporation, limited liability company, joint venture, or any co mbination or organization licensed under this f- chapter, and shall also include any named responsible managing o ficer, responsible managing manager, responsible managing member, or personnel of that licentiate whose appearance has qualified the licentiate u nder the provisions of Section 7068. Added Stats 1957 ch 1712 § 1. Amended Stats 1995 ch 467 § 10 (SB 1061); Stats 2010 ch 698 § 27 (SB 392), effective January 1, 2011. § 7097. Suspension of additional license issued following suspension of any license Notwithstanding the provisions of Sections 7121 and 7122, when any license has been suspended by a decision of the registrar purs uant to an accusation or pursuant to subdivision (b) of Section 7071.17, Se c- tion 7085.6 or 7090.1, any additional license issued under this chapter in the name of the licensee or for which the licensee furnished qualif y- ing experience and appearance under the provisions of Section 7068, may be suspended by the registrar without further n otice. Added Stats 1957 ch 1712 § 2. Amended S tats 1995 ch 467 § 11 (SB 1061).

407 CHAPTER 12. CONTRACT ORS LICENSE LAW 375 § 7098. Revocation of additional license issued following revocation of license Notwithstanding the provisions of Sections 7121 and 7122, when any license has been revoked under the provisions of this chapter, any additio nal license issued under this chapter in the name of the licensee or for which the licensee furnished qualifying experience and appearance under the provisions of Section 7068, may be revoked by the registrar without further notice. Added Stats 1957 ch 1712 § 3. Amended Stats 1995 ch 467 § 12 (SB 1061). Citation § 7099. If, upon investigation, the registrar has probable cause to believe that a licensee, or an applicant for a license under this chapter, has committed any acts or omissions which are grounds o- for denial, rev cation, or suspension of license, he or she may, in lieu of proceeding pursuant to this article, issue a citation to the licensee or applicant. Each citation shall be in writing and shall describe with particularity the nature of the viola l- tion, including a reference to the provisions a leged to have been violated. In addition, each citation may contain an order of correction fixing a reasonable time for correction of the viol a- tion or an order, against the licensee only, for payment of a spe cified sum to an injured party in lieu of correction, and may contain an a s- sessment of a civil penalty. § 17. Amended Stats 1983 ch 891 § 1; Added Stats 1979 ch 1013 § 22; Stats 1984 ch 606 Stats 1985 ch 1281 § 3; Stats 1986 ch 27 § 6; Stats 1987 ch 930 § 7, effective September 22, 1987. § 7099.1. Regulations for order of correction The board shall promulgate regulations covering the formulation of an order of correction which gives due consideration to the time r e- quired to correct and the practical feasi bility of correction. Added Stats 1979 ch 1013 § 18. § 7099.2. Regulations for assessment of civil penalties; Factors; Maximum amount; Letter of admonishment (a) The board shall promulgate regulations covering the assessment of civil penalties under this article that give due consideration to the appropriateness of the penalty with respect to the following factors: (1) The gravity of the violation. (2) The good faith of the licensee or applicant for licensure being charged. (3) The history of previous vio lations.

408 376 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (b) Except as otherwise provided by this chapter, no civil penalty shall be assessed in an amount greater than five thousand dollars ($5,000). Notwithstanding Section 125.9, a civil penalty not to exceed fifteen thousand dollars ($15,000) may be assessed for a violation of Section 7114 or 7118. (c) If, upon investigation, the registrar has probable cause to believe that a licensee, registrant, or applicant has committed acts or omi s- sions that are grounds for denial, suspension, or revocation of a l i- cense or registration, the registrar, or his or her designee, may issue a letter of admonishment to an applicant, licensee, or registrant in lieu of issuing a citation. Nothing in this article shall in any way limit the registrar’s discretionary authority or ability to issue a letter of admonishment as prescribed by this subdivision. (1) The letter of admonishment shall be in writing and shall de- scribe in detail the nature and facts of the violation, including a re f- n- erence to the statutes or regulations violated. The letter of admo ishment shall inform the licensee, registrant, or applicant that within 30 days of service of the letter of admonishment the licensee, regi s- trant, or applicant may do either of the following: s- (A) Submit a written request for an office conference to the regi trar to contest the letter of admonishment. Upon a timely request, the registrar, or his or her designee, shall hold an office co nference with the licensee, registrant, or applicant and, if applicable, his or her le- gal counsel o r authorized representative. (i) No individual other than the legal counsel or authorized repr e- sentative of the licensee, registrant, or applicant may accompany the licensee, registrant, or applicant to the office co nference. conference, the licensee, registrant, or (ii) Prior to or at the office ations and documents applicant may submit to the registrar declar pertinent to the subject matter of the letter of admonishment. nformal and shall not be (iii) The office conference is intended to be i Administrative Procedure Act (Chapter 4.5 (commen c- subject to the ing with Section 11400) or Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). (iv) After the office conference, the registrar, or his or her designee, may affirm, modify, or withdraw the letter of admonishment. Within 14 calendar days from the date of the office conference, the registrar, i- or his or her designee, shall personally serve or send the written dec sion by certified mail to the licensee’s, registr ant’s, or applicant’s ad- dress of record. This decision shall be deemed the final administrative decision concerning the letter of a dmonishment. (v) Judicial review of the decision may be had by filing a petition for a writ of mandate in accordance with the prov isions of Section 1094.5 of the Code of Civil Procedure within 30 days after the date the dec i- sion was personally served or sent by certified mail. The judicial r e- view shall extend to the question of whether or not there was a prej u-

409 CHAPTER 12. CONTRACT ORS LICENSE LAW 377 dicial abuse of dis cretion in the issuance of the letter of admonis h- ment or in the decision after the office conference. (B) Comply with the letter of admonishment and, if required, su b- mit a written corrective action plan to the registrar documenting uant to this compliance. If an office conference is not requested purs section, compliance with the letter of admonishment shall not const i- tute an admission of the violation noted in the letter of admonis h- ment. (2) The letter of admonishment shall be served upon the licensee, strant, or applicant personally or by certified mail at his or her regi address of record with the board. If the licensee, registrant, or appl i- cant is served by certified mail, service shall be effective upon deposit in the United States mail. (3) The licensee, registrant, or applicant shall maintain and have readily available a copy of the letter of admonishment and co rrective action plan, if any, for at least one year from the date of iss uance of the letter of admonishment. (4) Nothing in this subdivision shal l in any way limit the board’s authority or ability to do either of the following: (A) Issue a citation pursuant to Section 125.9, 148, or 7099. (B) Institute disciplinary proceedings pursuant to this article. (5) The issuance of a letter of admonishment s hall not be co nstrued as a disciplinary action or discipline for purposes of licensure or the reporting of discipline for licensure. (6) The board shall not issue a letter of admonishment when any one of the following factors is present: (A) The licensee, registrant, or applicant was unli censed at the time of the violation. (B) Multiple violations have been established. (C) The licensee, registrant, or applicant has a history of the same or similar violations. (D) The violation resulted in financial harm to anot her. (E) The victim is an elder or dependent adult as de fined in Section 368 of the Penal Code. (F) The violation is related to the repair of damage caused by a nat- ural disaster. (7) The board may adopt regulations to further define the circu m- stances under which a letter of admonishment may be issued. Added Stats 1979 ch 1013 § 19. Amended Stats 1984 ch 606 § 1.5; Stats 1992 ch 606 § 2 (AB 3240); Stats 1996 ch 282 § 4 (AB 2494); Stats 2003 ch 363 § 5 (AB 1382); Stats 2010 ch 415 § 21 (SB 1491), effecti ve January 1, 2011; Stats 2017 ch 308 § 2 (SB 486), effective January 1, 2018.

410 378 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7099.3. Appeal to registrar u- Any licensee or applicant for licensure served with a citation purs ant to Section 7099, may appeal to the registrar within 15 working days from service of the citation with respect to violations alleged by the registrar, correction periods, amount of penalties, and the reason- ableness of the change required by the registrar to correct the cond i- tion. § 20. Amended Stats 1983 ch 891 § 23; Stats 1984 ch 606 § 2. Added Stats 1979 ch 1013 § 7099.4. Time to contest citation If within 15 working days from service of the citation issued by the registrar, the licensee or applicant for licensure fails to notify the re g- istrar that he or she intends to contes t the citation, the citation shall be deemed a final order of the registrar and not be subject to review day period may be extended by the by any court or agency. The 15- registrar for cause. Added Stats 1979 ch 1013 § 21. Amended Stats 1983 ch 891 § 24; St ats 1984 ch 606 § 3. § 7099.5. Hearing If a licensee or applicant for licensure notifies the registrar that he or she intends to contest a citation issued under Section 7099, the registrar shall afford an opportunity for a hearing. The registrar shall thereafter issue a decision, based on findings of fact, affirming, modi- i- fying, or vacating the citation or penalty, or directing other appropr ate relief. The proceedings under this section shall be conducted in accordance with the provisions of Chapter 5 (co mmencing with Se c- tion 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the registrar shall have all the powers granted therein. Added Stats 1979 ch 1013 § 22. Amended Stats 1984 ch 606 § 4. § 7099.6. Failure to comply with citation a s ground for denial, suspension, or revocation of license (a) The failure of a licensee to comply with a citation after it is final is a ground for suspension or revocation of license. (b) The failure of an applicant for licensure to comply with a cit a- tion after it is final is a ground for denial of license. Added Stats 1979 ch 1013 § 23. Amended Stats 1984 ch 606 § 5; Stats 1986 ch 1205 § 2. § 7099.7. Bond exempt from payment of civil penalty No order for payment of a civil penalty shall be made against any bond required pursuant to Sections 7071.5 to 7071.8.

411 CHAPTER 12. CONTRACT ORS LICENSE LAW 379 Added Stats 1979 ch 1013 § 24. Citation; Hearing; Disconnection of telephone § 7099.10. service (a) If, upon investigation, the registrar has probable cause to be- lieve that a licensee, an applicant for a license, or an unlicensed indi- vidual acting in the capacity of a contractor who is not otherwise e x- empted from the provisions of this chapter, has violated Section 7027.1 by advertising for construction or work of improvement co v- in an alphabetical or classified directory, without ered by this chapter being properly licensed, the registrar may issue a citation under Se c- tion 7099 containing an order of correction which requires the viola- tor to cease the unlawful advertising and to notify the telephone co m- pany furnishing services to the violator to disconnect the telephone service furnished to any telephone number contained in the unlawful advertising, and that subsequent calls to that number shall not be referred by the telephone company to any new telephone number o b- tained by that person. (b) If the person to whom a citation is issued under subdivision (a) notifies the registrar that he or she intends to contest the citation, the registrar shall afford an opportunity for a hearing, as specified in Se c- tion 7099.5, within 90 days after receiving the notification. (c) If the person to whom a citation and order of correction is issued under subdivision (a) fails to comply with the order of correction after the order is final, the registrar shall inform the P m- ublic Utilities Co mission of the violation, and the Public Utilities Commission shall require the telephone corporation furnishing services to that person m- to disconnect the telephone service furnished to any telephone nu rtising. ber contained in the unlawful adve (d) The good faith compliance by a telephone corporation with an order of the Public Utilities Commission to terminate service issued pursuant to this section shall constitute a complete defense to any civil or criminal action brought against the telephone corporation arising from the termination of service. Added Stats 1986 ch 518 § 2. Amended Stats 1991 ch 1160 § 32 (AB 2190); Stats 1992 ch 294 § 3 (AB 2347). § 7099.11. Advertising to promote services for asbestos removal; Notice to comply; Cit ation (a) No person shall advertise, as that term is defined in Section 7027.1, to promote his or her services for the removal of asbestos u n- less he or she is certified to engage in asbestos -related work purs uant to Section 7058.5, and registered for that purpose pursuant to Section 6501.5 of the Labor Code. Each advertisement shall include that pe r-

412 380 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW son ’s certification and registration numbers and shall use the same name under which that person is certified and registered. (b) The registrar shall issue a not ice to comply with the order of cor- rection provisions of subdivision (a) of Section 7099.10, to any person who is certified and registered, as described in subdivision (a), and who fails to include in any advertisement his or her certification and registra tion numbers. (c) The registrar shall issue a citation pursuant to Section 7099 to any person who fails to comply with the notice required by subdiv i- sion (b), or who advertises to promote his or her services for the r e- valid certification and regis- moval of asbestos but does not possess tration numbers as required by subdivision (a), or who fails to use in that advertisement the same name under which he or she is certified and registered. Citations shall be issued and conducted pursuant to Sections 7099 to 70 99.10, inclusive. § 1, operative July 1, 1989, as § 7030.6. Amended and r e- Added Stats 1988 ch 1003 22 (AB 2190). Amended Stats 1992 ch 294 § 4 (AB numbered by Stats 1991 ch 1160 § 2347). § 7100. Continuance of business pending review In any proceeding fo r review by a court, the court may in its discre- tion, upon the filing of a proper bond by the licensee in an amount to be fixed by the court, but not less than one thousand dollars ($1,000) h- or an amount the court finds is sufficient to protect the public, whic e- ever is greater, guaranteeing the compliance by the licensee with sp cific conditions imposed upon him by the registrar ’s decision, if any, permit the licensee to continue to do business as a contractor pending entry of judgment by the court in the ca se. There shall be no stay of the registrar ’s decision pending an appeal or review of any such pr o- ceeding unless the appellant or applicant for review shall file a bond in all respects conditioned as, and similar to, the bond r equired to stay the effect of the registrar ’s decision in the first i nstance. Added Stats 1939 ch 37 § 3; Stats 1949 ch 753 § 1; § 1. Amended Stats 1945 ch 886 Stats 1979 ch 1013 § 27. § 7102. Reinstatement or reissuance of license After suspension of a license upon any of the groun ds set forth in this chapter, the registrar may reinstate the license upon proof of compl iance by the contractor with all provisions of the decision as to reinstatement or, in the absence of a decision or any provisions of r e- instatement, in the sound discr etion of the registrar. After revocation of a license upon any of the grounds set forth in this chapter, the license shall not be reinstated or reissued and a li-

413 CHAPTER 12. CONTRACT ORS LICENSE LAW 381 cense shall not be issued to any member of the personnel of the r e- voked l icensee found to have had knowledge of or participated in the acts or omissions constituting grounds for revocation, within a min i- mum p eriod of one year and a maximum period of five years after the final decision of revocation and then only on proper showing that all loss cause d by the act or omission for which the license was revoked i- has been fully satisfied and that all conditions imposed by the dec sion of revocation have been complied with. The board shall promulgate regulations covering the criteria to be tending the minimum one -year period. The crit e- considered when ex ria shall give due consideration to the appropriateness of the exten- sion of time with respect to the following factors: (a) The gravity of the violation. (b) The history of previous violations. (c) Criminal con victions. When any loss has been reduced to a monetary obligation or debt, however, the satisfaction of the monetary obligation or debt as a pr e- requisite for the issuance, reissuance, or reinstatement of a license shall not be required to the extent the monetary obligation or debt was discharged in a bankruptcy proceeding. However, any nonmon e- tary condition not discharged in a bankruptcy proceeding shall be complied with prior to the issuance, the reissuance, or reinstatement of the license. Added Stats 193 9 ch 37 § 5, operative October 1, § 1. Amended Stats 1961 ch 1635 § 1; Stats 1983 ch 891 2; Stats 1995 1962; Stats 1975 ch 818 § 25; Stats 1987 ch 831 § ch 467 § 13 (SB 1061); Stats 2006 ch 123 § 1 (AB 2658), effective January 1, 2007. Effect of disciplinary action by another state § 7103. The revocation, suspension, or other disciplinary action of a license to act as a contractor by another state shall constitute grounds for disciplinary action in this state if the individual is a licensee, or ap- plies fo r a license, in this state. A certified copy of the revocation, suspension, or other disciplinary action by the other state is concl u- sive evidence of that action. Added Stats 1994 ch 1135 § 2 (AB 3302). § 7104. Notice to complainant of resolution of comp laint When the board resolves a complaint, the board shall notify the complainant in writing of its action and the reasons for taking that action. The board shall provide the same notice in writing to the co n- tractor provided that the contractor is licensed and the notification would not jeopardize an action or investigation that involves the co n- tractor. Added Stats 1994 ch 1135 § 4 (AB 3302).

414 382 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7106. Revocation or suspension of license incident to court action The suspension or revocation of license as in this chapter provided may also be embraced in any action otherwise proper in any court n- involving the licensee ’s performance of his legal obligation as a co tractor. Added Stats 1939 ch 37 § 1. Effect of expiration, cancellation, forfeiture, § 7106.5. revocation, or suspension of license on jurisdiction of registrar The expiration, cancellation, forfeiture, revocation, or suspension of a license by operation of law or by order or decision of the registrar or license by a licensee, a court of law, or the voluntary surrender of a shall not deprive the registrar of jurisdiction to proceed with any i n- vestigation of or action or disciplinary proceeding against the license, or to render a decision suspending or revoking the license. Added Stats 1941 ch 971 § 16. Amended Stats 1961 ch 1636 § 6, operative October 1, 1962; Stats 2002 ch 1013 § 61.3 (SB 2026); Stats 2012 ch 85 § 2 (AB 2554), effective January 1, 2013. Abandonment of contract § 7107. Abandonment without legal excuse of any construction project or operation engaged in or undertaken by the licensee as a contractor constitutes a cause for disciplinary action. § 1. Added Stats 1939 ch 37 Diversion or misapplication of funds or property § 7108. Diversion of funds or property received for prosecution or compl e- tion of a specific construction project or operation, or for a specified purpose in the prosecution or completion of any construction project or operation, or failure substantially to account for the application or use of such funds or property on th e construction project or operation for which such funds or property were received constitutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1. Amended Stats 1959 ch 97 § 1. —See Penal Code Section 484b, Wrongful Diversion of Public Funds, a Pu blic Offense, in Appendix. § 7108.5. Failure to pay subcontractors (a) A prime contractor or subcontractor shall pay to any subcontra c- tor, not later than seven days after receipt of each progress pa yment,

415 CHAPTER 12. CONTRACT ORS LICENSE LAW 383 unless otherwise agreed to in writing, the respec tive amounts allowed the contractor on account of the work performed by the subcontra c- tors, to the extent of each subcontractor’s interest therein. In the event that there is a good faith dispute over all or any portion of the amount due on a progress paym ent from the prime contractor or su b- contractor to a subcontractor, the prime contractor or subcontra ctor may withhold no more than 150 percent of the disputed amount. (b) Any violation of this section shall constitute a cause for discipli- all subject the licensee to a penalty, payable to the nary action and sh subcontractor, of 2 percent of the amount due per month for every month that payment is not made. In any action for the collection of funds wrongfully withheld, the (c) d to his or her attorney’s fees and prevailing party shall be entitle costs. The sanctions authorized under this section shall be separate (d) a- from, and in addition to, all other remedies, either civil, administr tive, or criminal. (e) This section applies to all private works of improvem ent and to all public works of improvement, except where Section 10262 of the Public Contract Code applies. Added Stats 2009 ch 307 § 73 (SB 821), effective January 1, 2010. Amended Stats 2010 ch 328 § 16 (SB 1330), effective January 1, 2011; Stats 2011 ch c- 700 § 1 (SB 293), effe tive January 1, 2012. —See Public Contract Code Section 10262, in the Appendix. § 7108.6. tted by Failure to pay transportation charges submi dump truck carrier A licensed contractor is required to pay all transportation charges submitted by a duly authorized motor carrier of property in dump truck equipment by the 20th day following the last day of the cale n- dar month in which the transportation was performed, if the charges, including all necessary documentation, are submitted by t he fifth day following the last day of the calendar month in which the transport a- tion was performed. The payment shall be made unless otherwise agreed to in writing by the contractor and by the duly authorized m o- tor carrier of property in dump truck equipm ent. In the event that there is a good faith dispute over a portion of the charges claimed, the contractor may withhold payment of up to 150 percent of the disputed amount or an amount otherwise agreed to by the parties. A violation of this section constit utes a cause for disciplinary action under Se c- tion 7120 and shall also subject the contractor licensee to a penalty, payable to the carrier, of 2 percent of the amount due per month for every month that payment is outstanding. In an action for the colle c-

416 384 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW tion of moneys not paid in accordance with this section, the prevailing party shall be entitled to his or her attorney ’s fees and costs. This section applies to all private works of improvement and to all public works of improvement. Added Stats 1984 ch 1494 1 (AB 311); Stats 1996 ch § 1. Amended Stats 1995 ch 37 § 712 § 3 (SB 1557). Departure from accepted trade standards; D eparture § 7109. from plans or specifications (a) A willful departure in any material respect from accepted trade standards for good a nd workmanlike construction constitutes a cause for disciplinary action, unless the departure was in accordance with plans and specifications prepared by or under the direct supervision of an architect. (b) A willful departure from or disregard of plans or specifications in any material respect, which is prejudicial to another, without the consent of the owner or his or her duly authorized representative and without the consent of the person entitled to have the particular co n- struction project or operation completed in accordance with such plans or specifications, constitutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1. Amended Stats 1963 ch 1611 § 4, § 1; Stats 1988 ch 1619 effective September 30, 1988. on 8556 Removal and Replacement of Pest —See Business & Professions Code Secti Damage Areas; Application of Wood Preservatives: Contracting for Performance of Soil Treatment Pest Control Work, in Appendix. § 7109.5. Violation of safety provisions Violation of any safety provision in, or autho rized by, Division 5 (commencing with Section 6300) of the Labor Code resulting in death or serious injury to an employee constitutes a cause for disciplinary action. Added Stats 1963 ch 1083 § 2. § 7110. Disregard or violation of statutes Willful or deliberate disregard and violation of the building laws of the state, or of any political subdivision thereof, or of Section 8550 or 8556 of this code, or of Sections 1689.5 to 1689.15, inclusive, or Se c- tions 1689.10 to 1689.13, inclusive, of the Civil Code, or of the safety laws or labor laws or compensation insurance laws or Unemployment Insurance Code of the state, or of the Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Cont ract Code), or violation by any lice n- see of any provision of the Health and Safety Code or Water Code,

417 CHAPTER 12. CONTRACT ORS LICENSE LAW 385 relating to the digging, boring, or drilling of water wells, or Article 2 (commencing with Section 4216) of Chapter 3.1 of Division 5 of Title 1 of the G overnment Code, constitutes a cause for disciplinary action. § 1; Stats 1965 ch 583 § 1; Added Stats 1939 ch 37 § 1. Amended Stats 1949 ch 1433 § 3; Stats 1974 ch 433 § 2; Stats 1979 ch 747 § 1; Stats 1969 ch 820 Stats 1968 ch 804 § 1.7; Sta ts 1994 ch 362 § 1 (AB 2719); Stats 2002 ch 1013 § 61.5 (SB § 1.5, ch 1012 2026); Stats 2010 ch 415 § 22 (SB 1491), effective January 1, 2011. —See Public Contract Code Sections 4107 and 4110. Requiring or causing execution of release § 7110.1. The requiring of an exec ution of release of any claim or the causing of the execution of any such release in violation of Section 206.5 of the Labor Code is a cause for disciplinary action. § 2. Added Stats 1959 ch 1066 —See Labor Code Section 206.5, Violation: Release of Claim for Wages, in Appendix. § 7110.5. Initiation of action against contractor after r eceipt of Labor Commissioner ’s finding of willful violation of Labor Code ’s finding Upon receipt of a certified copy of the Labor Commissioner of a willful or deliberate violation of the Labor Code by a licensee, pursuant to Section 98.9 of the Labor Code, the registrar shall init i- ate disciplinary action against the licensee within 180 days of notif i- cation. Added Stats 1978 ch 1247 § 9 (SB 1112), effective Ja n- § 1. Amended Stats 2005 ch 280 uary 1, 2006; Stats 2014 ch 392 § 4 (SB 315), effective January 1, 2015. § 7111. Failure to make and keep records for inspection; Disciplinary action (a) Failure to make and keep records showing all contracts, doc u- ments, records, receipts, and disbursements by a licensee of all of his or her transactions as a contractor, and failure to have those records available for inspection by the registrar or his or her duly authorized representative for a period of not less than five years after compl etion of any construction project or operation to which the records refer, or refusal by a licensee to comply with a written request of the registrar to make the records available for inspection constitutes a cause for disciplinary action. (b) Failure of a licensee, applicant, or registrant subject to the pr o- visions of this chapter, who without lawful excuse, delays, obstructs, or refuses to comply with a written request of the registrar or desig n- ee for information or records, to provide that information or make

418 386 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW available those records, when the information or records are required in the attempt to discharge any duty of the registrar, constitutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1; Stats 1988 ch 1035 § 3; § 1. Amended Stats 1959 ch 98 Stats 1991 ch 1160 § 33 (AB 2190). Failure to respond to request to cooperate in § 7111.1. investigation of complaint The failure of, or refusal by, a licensee to respond to a written r e- laint quest of the registrar to cooperate in the investigation of a comp against that licensee constitutes a cause for disciplinary action. § 8. Added Stats 1984 ch 1174 Omission or misrepresentation of material fact by § 7112. applicant Omission or misrepresentation of a material fact by an applicant or a btaining, or renewing a license, or in adding a classif licensee in o ication to an existing license constitutes a cause for disciplinary a ction. Added Stats 1939 ch 37 § 1. Amended Stats 2001 ch 728 § 61 (SB 724). § 7112.1. Expungement of classification due to omissio n or misrepresentation Any classification that has been added to an existing license record as a result of an applicant or licensee omitting or misrepresenting a material fact shall be expunged from the license record pursuant to a final order of the regis trar evidencing a violation of Section 7112. Added Stats 2001 ch 728 § 62 (SB 724). § 7113. Failure to complete project for contract price Failure in a material respect on the part of a licensee to complete any construction project or operation for the p rice stated in the co n- tract for such construction project or operation or in any modification of such contract constitutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1. § 7113.5. Avoidance or settlement of obligations for less than full am ount The avoidance or settlement by a licensee for less than the full amount of the lawful obligations of the licensee incurred as a contra c- tor, whether by (a) composition, arrangement, or reorganization with creditors under state law, (b) composition, arr angement, or reorganiz a- tion with creditors under any agreement or understanding, (c) recei v-

419 CHAPTER 12. CONTRACT ORS LICENSE LAW 387 ership as provided in Chapter 5 (commencing at Section 564) of Title 7 of Part 2 of the Code of Civil Procedure, (d) assignment for the benefit of creditors, (e) tr dissolution, constitutes a cause for usteeship, or (f) disciplinary action. a- This section shall not apply to an individual settlement of the oblig a part of or tion of a licensee by the licensee with a creditor that is not in connection with a settlement w ith other creditors of the licensee. dis- No disciplinary action shall be commenced against a licensee for charge of or settling in bankruptcy under federal law, the licensee ’s the full amount lawful obligations incurred as a contractor for less than obligations, so long as the licensee satisfies all of those lawful of the obligations, to the extent the obligations are not discharged under fe d- eral law. § 1. Amended Stats 1961 ch 1636 § 7, o perative October 1, Added Stats 1959 ch 1361 1962; Stats 1963 ch 991 § 1; Stats 1975 ch 818 § 2; Stats 1980 ch 135 § 1; Stats 2006 ch 123 § 2 (AB 2 658), effective January 1, 2007; Stats 2009. Ch. 500 (AB 1059). § 7114. Aiding, abetting, or conspiring with unlicensed person to evade law person to evade the provisions (a) Aiding or abetting an unlicensed of this chapter or combining or conspiring with an unlicensed pe rson, or allowing one’s license to be used by an unlicensed person, or acting as agent or partner or associate, or otherwise, of an unl icensed person ntent to evade the provisions of this cha pter constitutes a with the i cause for disciplinary action. (b) A licensee who is found by the registrar to have violated subd i- vision (a) shall, in accordance with the provisions of this article, be subject to the registrar’s authority to order payment of a specified sum to an injured party, including, but not limited to, payment for any injury resulting from the acts of the unlicensed person. Added Stats 1939 ch 37 § 1. Amended Stats 1975 ch 329 § 2; Stats 2007 ch 299 § 1 (SB 354), effective January 1, 2008; Stats 2013 ch 319 § 8 (SB 822), effective January 1, 2014. § 7114.1. False certification of qualifications Any licensee whose signature appears on a falsified certificate in support of an examinee ’s experience qualificat ions, or otherwise cert i- fying to false or misleading experience claims by an applicant, which have been submitted to obtain a contractor ’s license shall be subject to disciplinary action. Added Stats 1983 ch 891 § 26.

420 388 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7114. 2. Administrative remedies au thorized for misuse of contractor license Any licensed or unlicensed person who commits any act prohibited by Section 119 is subject to the administrative remedies authorized by this chapter. Unless otherwise expressly provided, the remedies authorized under this section shall be separate from, and in addition to, all other available remedies, whether civil or criminal. Added Stats 2013 ch 163 § 1 (SB 261), effective January 1, 2014. Material failure to comply with chapter, rules, or § 7115. regulations Failure in any material respect to comply with the provisions of this chapter, or any rule or regulation adopted pursuant to this chapter, n- or to comply with the provisions of Section 7106 of the Public Co tract Code, constitutes a cause for disciplinary act ion. Added Stats 1939 ch 37 § 27; Stats 1984 ch 1174 § 9; § 1. Amended Stats 1983 ch 891 Stats 1990 ch 485 § 1 (SB 2290); Stats 1991 ch 1160 § 34 (AB 2190). § 7116. Wilful or fraudulent act injuring another The doing of any wilful or fraudulent act by th e licensee as a co n- n- tractor in consequence of which another is substantially injured co stitutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1. Causes for discipline § 7116.5. wing: It is a cause for discipline for a licensee to do any of the follo (a) Engage in any conduct that subverts or attempts to subvert an investigation of the board. (b) Threaten or harass any person or licensee for providing evidence in any possible or actual disciplinary action, arbitration, or other le- gal action. (c) Discharge an employee primarily because of the employee ’s a t- tempt to comply with or aid in compliance with the provisions of this chapter. Added Stats 2003 ch 607 § 33 (SB 1077). § 7117. Acting as contractor under unlicensed name or personnel Acting in the capacity of a contractor under any license issued hereunder except: (a) in the name of the licensee as set forth upon the license, or (b) in accordance with the personnel of the licensee as set

421 CHAPTER 12. CONTRACT ORS LICENSE LAW 389 forth in the application for such license, or as later cha nged as pr o- vided in this chapter, constitutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1. § 7117.5. Acting as contractor under inactive or suspended license (a) Acting in the capacity of a contractor under any license which inactive, as provided in Section 7076.5, constitutes a has been made cause for disciplinary action. (b) Acting in the capacity of a contractor under any license that has been suspended for any reason constitutes a cause for disciplinary action. ty of a contractor under any license that has (c) Acting in the capaci b- expired constitutes a cause for disciplinary action if the license is su ject to renewal pursuant to Section 7141. The actions authorized u n- der this section shall be separate from, and in addition to, all other remedies either civil or criminal. Added Stats 1961 ch 2099 § 2. Amended Stats 1984 ch 1174 § 10; Stats 1995 ch 467 § 15 (SB 1061). § 7117.6. Acting as contractor in unauthorized classific ation Acting in the capacity of a contractor in a classification other than that currently held by the licensee constitutes a cause for disciplinary action. § 28. Added Stats 1983 ch 891 Entering into contract with unlicensed contra ctor § 7118. Entering into a contract with a contractor while such contractor is not li censed as provided in this chapter constitutes a cause for disc i- plinary action. Added Stats 1939 ch 37 § 1. Amended Stats 1975 ch 329 § 3. § 7118.4. Asbestos inspections; Disclosure requirements (a) If a contractor has made an inspection for the purpose of dete r- mining the presence of asbestos or the need for related remedial a ction with knowledge that the report has been required by a person as a co n- dition of making a loan of money secured by the property, or is required by a public entity as a condition of issuing a permit concerning the property, the contractor shall disclose orally and in writing if it is owned or has any common ownership, or any financial relationship whatsoever, including, but not limited to, commissions or refer ral fees, with an enti ty in the business of performing the corrective work.

422 390 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (b) This section does not prohibit a contractor that has contracted to perform corrective work after the report of another company has ind i- action cated the presence of asbestos or the need for related remedial from making its own inspection prior to performing that corrective work or from making an inspection to determine whether the correc- tive measures were successful and, if not, thereafter performing addi- tional corrective work. (c) A violation of this section is grounds for disciplinary action. (d) A violation of this section is a misdemeanor punishable by a fine of not less than three thousand dollars ($3,000) and not more than five thousand dollars ($5,000), or by imprisonment in the county jail not more than one year, or both. for (e) For the purpose of this section, “ ” has the meaning set asbestos forth in Section 6501.7 of the Labor Code. § 1. Added Stats 1988 ch 1491 Sanctions against contractor hiring uncertified § 7118.5. person to perform asbe -related work stos Any contractor, applicant for licensure, or person required to be l i- censed, who, either knowingly or negligently, or by reason of a failure to inquire, enters into a contract with another person who is required to be, and is not, certifie d pursuant to Section 7058.5 to engage in as- -related work, as defined in Section 6501.8 of the Labor Code, is bestos subject to the following penalties: (a) Conviction of a first offense is an infraction punishable by a fine of not less than one thousand do llars ($1,000) or more than three thousand dollars ($3,000), and by possible revocation or suspension of any contractor’ s license. (b) Conviction of a subsequent offense is a misdemeanor requiring revocation or suspension of any contractor ’s license, and a fine of not less than three thousand dollars ($3,000) or more than five thousand dollars ($5,000), or imprisonment in the county jail for not more than one year, or both the fine and imprisonment. Added Stats 1988 ch 1003 ded Stats 1991 ch 1160 § 4, operative July 1, 1989. Amen § 35 (AB 2190). § 7118.6. Sanctions for contracting with uncertified pe rson to perform removal or remedial action Any contractor who, either knowingly or negligently, or by reason of a failure to inquire, enters into a contract wit h another person who is required to be, and is not certified pursuant to Section 7058.7 to e n- gage in a removal or remedial action, as defined in Section 7058.7, is subject to the following penalties:

423 CHAPTER 12. CONTRACT ORS LICENSE LAW 391 (a) Conviction of a first offense is an infraction punis hable by a fine of not less than one thousand dollars ($1,000) or more than three thousand dollars ($3,000), and by possible revocation or suspension of any contractor’ s license. (b) Conviction of a subsequent offense is a misdemeanor requiring ’s license, and a fine of not revocation or suspension of any contractor less than three thousand dollars ($3,000) or more than five thousand dollars ($5,000), or imprisonment in the county jail for not more than one year, or both the fine and imprisonment. Added Stat s 1986 ch 1443 § 3, effective September 30, 1986. Amended Stats 1991 ch § 36 (AB 2190). 1160 § 7119. Failure to prosecute work diligently n- Wilful failure or refusal without legal excuse on the part of a lice project or operation see as a contractor to prosecute a construction with reasonable diligence causing material injury to another const i- tutes a cause for disciplinary action. Added Stats 1939 ch 37 § 1. § 7120. Failure to pay for materials or services; False denial of liability ailure by any licensee or agent or officer ther e- Wilful or deliberate f of to pay any moneys, when due for any materials or services ren- dered in connection with his operations as a contractor, when he has the capacity to pay or when he has received sufficient funds therefor as pa yment for the particular construction work, project, or operation for which the services or materials were rendered or purchased co n- stitutes a cause for disciplinary action, as does the false denial of any such amount due or the validity of the claim there of with intent to secure for himself, his employer, or other person, any discount upon such indebtedness or with intent to hinder, delay, or defraud the pe r- son to whom such indebtedness is due. Added Stats 1939 ch 37 § 1. § 7121. Participation in certain acts as disqualification from employment, election or association by licensee; Disc iplinary action A person who has been denied a license for a reason other than failure to document sufficient satisfactory experience for a suppl e- mental 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 partner, officer, director, manager, or associate of any

424 392 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW pa rtnership, corporation, limited liability company, firm, or associa- tion whose application for a license has been denied for a reason other p- than failure to document sufficient satisfactory experience for a su , or whose license has plemental classification for an existing license 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 partner, officer, director, manager, or associate had knowledge of or f the prohibited acts for which the license was participated in any o denied, suspended, or revoked, shall be prohibited from serving as an officer, director, associate, partner, manager, qualifying individual, or ent, member of the personnel of record of a licensee, and the employm election, or association of this type of person by a licensee in any c a- n- pacity other than as a nonsupervising bona fide employee shall co stitute grounds for disciplinary action. § 18. Amended Stats 1983 ch 891 § 29; Stats 2003 ch 363 § 6 Added Stats 1941 ch 971 15 (SB 1914); Stats 2010 ch 698 § 28 (SB 392), effective (AB 1382); Stats 2004 ch 865 § January 1, 2011. § 7121.1. Responsibility of disassociated partner, officer, director, manager, or associate for compliance with citation Notwithstanding a ny other provision of this chapter, the disassoci a- i- tion of a partner, officer, director, manager, or associate from the l cense of a partnership, corporation, limited liability company, firm, or association whose license has been cited pursuant to Section 7 099 shall not relieve the 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 sh all apply to a partner, officer, director, manager, or associate of a licensee that fails to comply with a citation after it is final. Added Stats 1994 ch 192 § 2 (AB 3475). Amended Stats 2010 ch 698 § 29 (SB 392), effective January 1, 2011. § 7121.5. fect of participation by qualifying individual in Ef acts for which license suspended, revoked, or not renewed 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 pa r- ticipated in the prohibited acts or omissions for which t he license was revoked, or suspended, and the employment, election, or association of that person by a licensee shall constitute grounds for disciplinary action.

425 CHAPTER 12. CONTRACT ORS LICENSE LAW 393 Added Stats 1983 ch 891 § 30. Amended Stats 2010 ch 698 § 30 (SB 392), effective Jan- uary 1, 2011. § 7121.6. Restricted activities for specified individuals (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 l i- ee: censee, other than as a bona fide nonsupervising employ (1) The individual was listed as an officer, director, owner, mana g- er, partner, or associate 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. is not eligible for reinstatement for licensure u (3) The individual n- der Section 7102. (b) An individual who meets all of the following criteria shall not i- perform any act regulated under this chapter for or on behalf of a l censee, other than as a bona fide nonsupervising e mployee: (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 individ u- al during the commission or omission of any of the ac ts that resulted in the revocation of the license, whether or not he or she had knowledge of or participated in those acts. n- (3) The individual is not eligible for reinstatement for licensure u der 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 i m- prisonment 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 lative to the penalties available under by this subdivision is cumu 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 info r- mation or complaint filed within four years from the performance of any act that is prohibited under this section. Added Stats 2006 ch 171 § 1 (AB 2897), effective January 1, 2007. Amended Stats 2010 ch 698 § 31 (SB 392), effective January 1, 2011. § 7121.65. Notification of license revocation required Prior to becoming employed in any capacity by an entity that is su b- ject to licensure under this chapter, an individual who is described in subdivision (a) or (b) of Section 7121.6 shall provide the prospective employer with written notice of the license revocation. Added Stats 2006 ch 171 § 2 (AB 2897), effective January 1, 2007.

426 394 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7121.7. Employment of individuals with revoked licenses (a) A qualifying individual, officer, partner, or other person named who is d on a license shall not knowingly employ an individual e- scribed in subdivision (a) or (b) of Section 7121.6, except as a bona fide nonsupervising employee. (b) A violation of this section is a misdemeanor punishable by a fine of not less than four thousand five hundred dollars ($4,500), by i m- priso nmen t in a county jail for not less than 30 days nor more than one year, or by both the fine and imprisonment. (c) Notwithstanding any other provision of law to the contrary, an indictment for any violation of this section shall be found or an info r- omplaint filed within four years from the performance of mation or c any act that is prohibited under this section. Added Stats 2006 ch 171 § 3 (AB 2897), effective January 1, 2007. “ Bona fide nonsupervising employee” § 7121.8. For purposes of this article, “ bona fide nonsupervising employee ” means a person who is exempt from the provisions of this chapter u n- der Section 7053, and who does not otherwise meet the test of an i n- dependent co ntractor, as set forth under Section 2750.5 of the Labor Code. 171 Added Stats 2006 ch § 4 (AB 2897), effective January 1, 2007. § 7122. When act or omission of individual or business entity constitutes cause for disciplinary action against licen see The performance by an individual, partnership, corporation, limited firm, or association of an act or omission constitu liability company, t- ing a cause for disciplinary action, likewise constitutes a cause for disciplinary action against a licensee other than the individual quali- fying on behalf of the individual or entity, if the licensee wa s a par t- ner, officer, director, manager, or associate of that individual, par t- nership, corporation, limited liability company, firm, or association at the time the act or omission occurred, and had knowledge of or parti c- ipated in the prohibited act or omis sion. Added Stats 1947 ch 1285. Amended Stats 1959 ch 407 § 5; Stats 2010 ch 698 § 32 (SB 392), effective January 1, 2011. § 7122.1. Responsibility of disassociated qualifying individual for compliance with citation; Applicability of § 7122.5 Notwithstan ding Section 7068.2 or any other provision of this cha p- ter, the disassociation of a qualifying 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 individual from respons i-

427 CHAPTER 12. CONTRACT ORS LICENSE LAW 395 bility for complying with the citation. Section 7122.5 shall apply to a qualifying individual of a licensee that fails to comply with a citation after it is final. Added Stats 1994 ch 192 7 (AB 1382) ; § 3 (AB 3475). Amended Stats 2003 ch 363 § Stats 2010 ch 698 § 33 (SB 392), effective January 1, 2011. Responsibility for compliance with arbitration § 7122.2. award following disassociation (a) Notwithstanding Section 7068.2 or any other provisions of this chapter, the disassociation of a qualifying individual from a license that has been referred to arbitration pursuant to Section 7085 shall not relieve the qualifying individual from the responsibility of co m- plying with an arbitration award rendered as a result of acts or omis- sions committed w hile acting as the qualifying individual for the li- cense as provided under Sections 7068 and 7068.1. (b) Section 7122.5 shall apply to a qualifying individual of a lice nsee that fails to comply with an arbitration award once it is rendered. Added Stats 200 2 ch 312 § 4 (AB 728). Amended Stats 2005 ch 385 § 1 (AB 316), effe c- tive January 1, 2006; Stats 2010 ch 698 § 34 (SB 392), effective January 1, 2011. Immateriality of licensee’s knowledge or § 7122.5. participation The performance by an individual, partn ership, corporation, limited t- liability company, firm, or association of an act or omission constitu ing a cause for disciplinary action, likewise constitutes a cause for disciplinary action against a licensee who at the time that the act or omission occurred was the qualifying individual of that individual, partnership, corporation, limited liability company, firm, or associa- tion, whether or not he or she had knowledge of or participated in the prohibited act or omission. Added Stats 1959 ch 407 § 6. Amend ed Stats 2010 ch 698 § 35 (SB 392), effective Jan u- ary 1, 2011. § 7123. Criminal conviction as cause for discipline A conviction of a crime substantially related to the qualifications, functions and duties of a contractor constitutes a cause for discipl i- nary action. The record of the conviction shall be conclusive evidence thereof. Added Stats 1955 ch 1532 § 2. Amended Stats 1978 ch 1161 § 365.

428 396 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7123.5. Disciplinary action for violation of overpricing following emergency or major disaster If a contracto r is convicted of violating Section 396 of the Penal Code or any substantially similar local ordinance in connection with the sale, or offer for sale, of repair or reconstruction services, as d e- License fined in Section 396 of the Penal Code, the Contractors ’ State Board shall take disciplinary action against the contractor, which shall include a suspension of at least six months or the permanent ’s license. revocation of the contractor 94 1st Ex Sess ch 52 Added Stats 1993– 0, 1994. § 1 (AB 36 X), effective November 3 —See Penal Code Section 396, Unlawful Price Increase Following a Declared State of Emergency, in Appendix. What constitutes conviction; When license may be § 7124. ordered suspended or revoked, or issuance refused A plea or verdict of guilty or a conviction following a plea of nolo co n- tendere is deemed to be a conviction within the meaning of this article. The board may order the license suspended or revoked, or may decline to issue a license, when the time for appeal has elapsed, or the jud g- ment of conviction has been affirmed on appeal or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section lea of 1203.4 of the Penal Code allowing such person to withdraw his p guilty and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the accusation, information or indic tment. Added Stats 1955 ch 1532 § 3. § 7124.5. [Section repealed 2004.] Added Stats 1979 ch 188 § 2, effective June 29, 1979. Repealed Stats 2004 ch 865 § 16 (SB 1914). The repealed section related to public disclosure of complaints against lice n- sees. § 7124.6. Public access to complaints against licensees; Disclaimer; Limitations of disclosure (a) The registrar shal l make available to members of the public the date, nature, and status of all complaints on file against a licensee that do either of the following: (1) Have been referred for accusation. (2) Have been referred for investigation after a determination by board enforcement staff that a probable violation has occurred, and have been reviewed by a supervisor, and regard allegations that if proven would present a risk of harm to the public and would be a p-

429 CHAPTER 12. CONTRACT ORS LICENSE LAW 397 propriate for suspension or revocation of the contractor’s license or criminal prosecution. (b) The board shall create a disclaimer that shall accompany the disclosure of a complaint that shall state that the complaint is an al- legation. The disclaimer may also contain any other information the board determines would be relevant to a person evaluating the co m- plaint. (c) (1) A complaint resolved in favor of the contractor shall not be subject to disclosure. (2) A complaint resolved by issuance of a letter of admonishment d resolved in fa pursuant to Section 7099.2 shall not be deeme vor of the contractor for the purposes of this section. A letter of admonis h- ment issued to a licensee shall be disclosed for a period of one year from the date described in paragraph (2) of subdivision (c) of Section 7099.2. (d) Except as described in subdivision (e), the registrar shall make available to members of the public the date, nature, and disposition of all legal actions. (e) Disclosure of legal actions shall be limited as follows: (1) (A) Citations shall be disclosed from the date of issuance and for five years after the date of compliance if no additional disc iplinary actions have been filed against the licensee during the five -year per i- od. If additional disciplinary actions were filed against the licensee during the five iod, all disciplinary actions shall be disclosed -year per for as long as the most recent disciplinary action is subject to disclo- sure under this section. At the end of the specified time per iod, those citations shall no longer be disclosed. (B) Any disclosure pursu ant to this paragraph shall also appear on e- the license record of any other license identified as a qualifier as d fined in Section 7025 who is listed in the members of the personnel of record as defined in Section 7025 of the license that was issued the citation. (C) The disclosure described in subparagraph (B) shall be for the period of disclosure of the citation. (2) Accusations that result in suspension, stayed suspension, or stayed revocation of the contractor’s license shall be disclosed from a- the date the accusation is filed and for seven years after the accus tion has been settled, including the terms and conditions of probation if no additional disciplinary actions have been filed against the lice n- see during the seven -year period. If additional discip linary actions were filed against the licensee during the seven -year period, all disc i- plinary actions shall be posted for as long as the most recent discipl i- nary action is subject to disclosure under this section. At the end of the specified time period, t hose accusations shall no longer be dis- closed.

430 398 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (3) All revocations that are not stayed shall be disclosed inde finitely from the effective date of the revocation. Added Stats 2001 ch 494 § 2 (SB 135), operative July 1, 2002. Amended Stats 2003 ch SB 1077); Stats 2016 § 1 (SB 1209), effective January 1, 2017. Stats 2017 ch 607 § 34 ( § 3 (SB 486), effective January 1, 2018. 308 Article 7.5 ’ Compensation Insurance Reports Workers Reports to registrar; Exemptions § 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 ation Insurance or Certification of Self -Insurance Workers' Compens in the applicant's or licensee's business name. A Certificate of Wor k- ers' Compensation Insurance shall be issued and filed, electronically or otherwise, by an insurer duly licensed to write workers' compen sa- tion 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 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 cribed by the registrar prior to the issuance, the board on a form pres 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 Califor- nia 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 T i- tle 16 of the California Code of Regulations. (c) No Certificate of Workers' Compen sation Insurance, Certific a- tion 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 St ate Compensation Insurance Fund, shall report to the registrar the following information for any policy required under this section: name, license number, policy nu m- ber, dates that coverage is scheduled to commence and lapse, and cancellation date if applicable.

431 CHAPTER 12. CONTRACT ORS LICENSE LAW 399 (2) A workers' compensation insurer shall also report to the regi s- trar a licensee whose workers' compensation insurance policy is ca n- celed by the insurer if all of the following conditions are met: (A) The insurer has completed a premium audit or in vestig ation. (B) A material misrepresentation has been made by the insured that results in financial harm to the insurer. nsurer. (C) No reimbursement has been paid by the insured to the i (3) Willful or deliberate disregard and violation of workers' compe n- sation insurance laws constitutes a cause for disciplinary action by the registrar against the licensee. (e) (1) For any license that, on January 1, 2013, is active and in- cludes a C -39 classification in addition to any other classification, the hall, in lieu of the automatic license suspension otherwise registrar s -39 classification from the required under this article, remove the C license unless a valid Certificate of Workers' Compensation Insurance or Certification of Self -Insurance is received by the reg istrar. (2) For any licensee whose license, after January 1, 2013, is active -39 classification removed as provided in paragraph and has had the C (1), and who is found by the registrar to have employees and to lack a valid Certificate of Workers' Compensat ion 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 subdiv i- sion (d) shall be confidential, and shall be exempt from disclo sure u n- der the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). Added Stats 1943 ch 132 § 1. Amended Stats 1990 ch 1386 § 3 (AB 2282); Stats 1991 ch 38 (AB 2190); Stats 1995 ch 467 § 16 (SB 1061); Stats 1996 ch 331 § 1 (AB 1160 § 4 (AB 264); Stats 2006 ch 38 § 1 (AB 881), effective January 3355); Stats 2002 ch 311 § 1, 2007, repealed January 1, 2011; Stats 2010 ch 423 § 1 (AB 2305), effective January 1, 2011, repealed January 1, 2013; Stats 2011 ch 686 § 1 (AB 878), effective January 1, 2012, repealed January 1, 2013; Stats 2012 ch 389 § 1 (AB 2219), effective January 1, 2013. § 7125.1. Time limit for acceptance of certificate (a) The registrar shall accept a certificate required by Section 7125 as of the effective date shown on the certificate, if the certificate is received by the registrar within 90 days after that date, and shall r e- instate the license to which the certificate pertains, if otherwise elig i- ble, retroactive to the ef fective date of the certificate. (b) Notwithstanding subdivision (a), the registrar shall accept the certificate as of the effective date shown on the certificate, even if the certificate is not received by the registrar within 90 days after that date, upo n a showing by the licensee, on a form acceptable to the reg- istrar, that the failure to have a certificate on file was due to circu m- stances beyond the control of the licensee. The registrar shall rei n-

432 400 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW state the license to which the certificate pertains, if otherwise elig i- ble, retroactive to the effective date of the certificate. Added Stats 1995 ch 467 § 18 (SB 1061). § 7125.2. Suspension of license for failure to maintain workers ’ compensation insurance ’ compens a- ers The failure of a licensee to obtain or maintain work tion insurance coverage, if required under this chapter, shall result in d- the automatic suspension of the license by operation of law in accor ance with the provisions of this section, but this suspension shall not affect, alter, or limit the s r- tatus of the licensee as an employer for pu poses of Section 3716 of the Labor Code. (a) The license suspension imposed by this section is effective upon the earlier of either of the following: ’ compensation insura nce (1) On the date that the relevant workers coverage lapses. (2) On the date that workers ’ compensation coverage is required to be obtained. (b) A licensee who is subject to suspension under paragraph (1) of subdivision (a) shall be provided a notice by the registrar that in- cludes all of the fol lowing: (1) The reason for the license suspension and the effective date. (2) A statement informing the licensee that a pending suspension will be posted to the license record for not more than 45 days prior to the posting of any license suspension periods required under this a rticle. (3) The procedures required to reinstate the license. n- (c) Reinstatement may be made at any time following the suspe sion by showing proof of compliance as specified in Sections 7125 and 7125.1. (d) In addition, with respect to an unlicensed individual acting in the capacity of a contractor who is not otherwise exempted from the provisions of this chapter, a citation may be issued by the registrar under Section 7028.7 for failure to comply with this article and to rs’ compensation insurance. An opportunity for a maintain worke hearing as specified in Section 7028.10 will be granted if requested within 15 working days after service of the citation. Added Stats 1995 ch 467 § 20 (SB 1061). Amended Stats 2002 ch 311 § 5 (AB 264). § 7125.3. Periods of licensure A contractor shall be considered duly licensed during all periods in which the registrar is required to accept the certificate prescribed by Section 7125, provided the licensee has otherwise complied with the provisions of this chapter. Added Stats 2002 ch 311 § 6 (AB 264).

433 CHAPTER 12. CONTRACT ORS LICENSE LAW 401 § 7125.4. Causes for disciplinary action; Misdemeanor (a) The filing of the exemption certificate prescribed by this article that is false, or the employment of a person subject to coverage under the worker f- s’ compensation laws after the filing of an exemption certi icate without first filing a Certificate of Workers’ Compensation I n- surance or Certification of Self -Insurance in accordance with the pr o- ect to cover- visions of this article, or the employment of a person subj age under the workers’ compensation laws without maintaining co v- erage for that person, constitutes cause for disciplinary action. n- (b) Any qualifier for a license who, under Section 7068.1, is respo sible for assuring that a licensee complies with the provisions of this chapter is also guilty of a misdemeanor for committing or failing to i- prevent the commission of any of the acts that are cause for discipl nary action under this section. § 7 (AB 264). Amended Stats 2005 ch 205 § 2 (SB 488), effe Added Stats 2002 ch 311 c- tive January 1, 2006; Stats 2015 ch 389 § 3 (SB 560), effective January 1, 2016. § 7125.5. Renewal of license; Exemption for workers’ compensation insurance; Recertification; Retroactive renewal (a) At the time of renewal, all act ive licensees with an exemption for workers’ compensation insurance on file with the board, submitted pursuant to subdivision (b) of Section 7125, shall either recertify the licensee’s exemption by completing a recertification statement on the license renewal form, as provided by the board, or shall provide a cu r- rent and valid Certificate of Workers’ Compensation Insurance or Certificate of Self -Insurance, whichever is applicable. The license shall not be renewed unless a licensee with an ex- (b) emption for workers’ compensation insurance on file with the board recertifies the exemption status or provides a current and valid Ce r- tificate of Workers’ Compensation Insurance or Certificate of Self - Insurance in conjunction with the license renewal. (c) If the docu mentation required by subdivision (a) is not provided with the license renewal but is received within 30 days after notific a- tion by the board of the renewal rejection, the registrar shall grant a retroactive renewal pursuant to Section 7141.5 back to the d ate of the postmark of the otherwise acceptable renewal. A renewal that is still incomplete for any reason after 30 days after notification of rejection shall not be eligible for retroactive renewal under this subdivision. Added Stats 2011 ch 546 § 1 (AB 397), effective January 1, 2012. § 7126. Violation of article; Misdemeanor Any licensee or agent or officer thereof, who violates, or omits to comply with, any of the provisions of this article is guilty of a misd e- meanor.

434 402 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW Added Stats 1943 ch 132 § 1. —See Labor Code Section 3899, Building Permits; Requirement for Verification of Workers Compensation in Appendix. —See also Health and Safety Code Section 19825, Declaration of Worker ’s Compens a- tion Required on Building Permits, in Appendix Stop order; Failure to observe; Protest § 7127. (a)(1) If an employer subject to licensure under this chapter has failed to secure the payment of compensation as required by Section 3700 of the Labor Code, and whether that employer is or is not l i- , the registrar may, in addition to any other censed under this chapter administrative remedy, issue and serve on that employer a stop order prohibiting the use of employee labor. The stop order shall become effective immediately upon service. An employee affected by the work stopp age shall be paid by the employer for his or her time lost, not exceeding 10 days, pending compliance by the employer. (2) Failure of any employer, officer, or any person having di rection, management, or control of any place of employment or of em ployees to observe a stop order issued and served upon him or her pursuant to this section is a misdemeanor punishable by imprisonment in the county jail not exceeding 60 days or by a fine not exceeding ten tho u- sand dollars ($10,000), or both. s subject to this section may protest the stop (b) An employer who i order by making and filing with the registrar a written request for a hearing within 20 days after service of the stop order. The hearing shall be held within five days from the date of filing the request. The r- registrar shall notify the employer of the time and place of the hea ing by mail. At the conclusion of the hearing, the stop order shall be immediately affirmed or dismissed, and within 24 hours thereafter the registrar shall issue and serve on all partie s to the hearing by registered or certified mail a written notice of findings and findings. A writ of mandate may be taken from the findings to the appropriate superior court. Such writ must be taken within 45 days after the mailing of the notice of findin gs and findings. Added Stats 2010 ch 643 § 1 (SB 1254), effective January 1, 2011. Article 8 Revenue § 7135. Disposition of fees and penalties; Appropriation (a) The fees and civil penalties received under this chapter shall be deposited in the Contract ors ’ License Fund. All moneys in the fund are hereby appropriated for the purposes of this chapter.

435 CHAPTER 12. CONTRACT ORS LICENSE LAW 403 (b) It is the intent of the Legislature that the board shall use mo n- eys appropriated from the fund to improve its administrative and i n- vestigative oversight activities and capacity. § 28; Stats 1986 ch 137 § 1. Added Stats 1939 ch 37 § 1. Amended Stats 1979 ch 1013 § 7135.1. Funds to enforce unlicensed activity provisions It is the intent of the Legislature that, each fiscal year the board shall designate, if appropriated in the Budget Act and to the extent that it does not conflict with the control language of the Budget Act, no less than 20 percent of the annual amount collected as a result of the fees increased by statutes enacted during the 1993 portion of the 1993 –94 Regular Session to be used to enforce the provision of this chapter relative to unlicensed activity. § 1 (SB 148). Added Stats 1993 ch 1188 § 7136. Percentage to be transferred to Consumer Affairs Fund t to exceed 10 percent of the The director shall designate a sum no total income of the Contractors ’ State License Board for each fiscal year to be transferred to the Consumer Affairs Fund as the board ’s share of the cost of administration of the department. Added Stats 1939 ch 37 § 1. Amended Stats 1971 ch 716 § 105; Stats 1984 ch 193 § 2. § 7137. Fee schedule c- The board may set fees by regulation. These fees shall be set a cording to the following schedule: (a) (1) The application fee for an original license in a single classif i- be three hundred thirty dollars ($330) and may be i n- cation shall -five dollars ($375). creased to not more than three hundred seventy (2) The application fee for each additional classific ation applied for in connection with an original license shall not be more than eig hty - five dollars ($85). (3) ation pursuant to The application fee for each additional classific Section 7059 shall be one hundred fifty dollars ($150) and may be in- creased to not more than one hundred seventy -five dollars ($175). (4) The application fee to replace a responsible managing officer, r e- sponsible managing manager, responsible managing member, or r e- sponsible managing employee pursuant to Section 7068.2 shall be one hundred fifty dollars ($150) and may be increased to not more than one hundred seven ty-five dollars ($175). (5) The application fee to add personnel, other than a qualifying i n- dividual, to an existing license shall be one hundred do llars ($100)

436 404 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW and may be increased to not more than one hundred fi fteen dollars ($115). (b) eduling an examination for an applicant who The fee for resch has applied for an original license, additional classification, a change of responsible managing officer, responsible managing manager, r e- sponsible managing member, or responsible managing e mployee, or for an asbestos certification or hazardous substance removal certific a- tion, shall not be more than seventy dollars ($70). (c) The fee for scheduling or rescheduling an examination for a l i- censee who is required to take the examination as a condition of pr o- bation shall not be more than seventy dollars ($70). The initial license fee for an active or inactive license shall be (d) two hundred dollars ($200) and may be increased to not more than two hundred twenty -five dollars ($225). (1) license shall be four hundred (e) The renewal fee for an active dollars ($400) and may be increased to not more than four hu ndred fifty dollars ($450). The renewal fee for an inactive license shall be two hundred do l- (2) lars ($200) and may be increased to not more than two hundred twe n- ty-five dollars ($225). (f) The delinquency fee is an amount equal to 50 percent of the r e- newal fee, if the license is renewed after its expiration. (g) The registration fee for a home improvement salesperson shall be eighty -three dollars ($83) and may be inc reased to not more than ninety -five dollars ($95). The renewal fee for a home improvement salesperson registr (h) a- tion shall be eighty -three dollars ($83) and may be increased to not more than ninety -five dollars ($95). (i) The application fee for an asbes tos certification examination -three dollars ($83) and may be increased to not more shall be eighty than ninety -five dollars ($95). The application fee for a hazardous substance removal or rem e- (j) dial action certification examination shall be eighty dollars -three ($83) and may be increased to not more than ninety -five dollars ($95). (k) In addition to any other fees charged to C -10 and C -7 contra c- tors, the board may charge a fee not to exceed twenty dollars ($20), provisions of the Labor which shall be used by the board to enforce Code related to electrician certification. ( l ) The board shall, by regulation, establish criteria for the appro val of expedited processing of applications. Approved expedited pr o- cessing of applications for licensure or registratio n, as required by other provisions of law, shall not be subject to this subdivision. (m) This section shall become operative on July 1, 2017. Added Stats 2016 ch 799 § 37 (SB 1039), effective January 1, 2017, operative July 1, 2017.

437 CHAPTER 12. CONTRACT ORS LICENSE LAW 405 § 7137.5. ction Transfer of funds for use of Uniform Constru Cost Accounting Commission; Recommendation; Reimbursement The sum of ten thousand dollars ($10,000) shall be transferred from the Contractors ’ License Fund to the Controller for the exclusive use ssion. of the California Uni form Construction Cost Accounting Commi The commission shall prepare a recommendation to the Legislature for a local public agency source to fund the commission beginning J u- ly 1, 1991, which will provide revenue supported by the contract ac- epresented by the commission tivities r ’s authority. Upon adoption of this funding program, the commission shall rei m- ’ License Fund in the amount of ten thousand burse the Contractors dollars ($10,000). Added Stats 1990 ch 1326 § 8 (AB 3480), effective September 25, 1990. Earned fee; Nonrefundability when application is § 7138. filed Notwithstanding any other provision of law, a fee paid in conne c- tion with a service or application covered by Section 7137 shall accrue to the Contractors ’ License Fund as an earned fee and shall not be refunded. Added Stats 1963 ch 160 § 3. Amended Stats 1966 ch 4 2; Stats § 6; Stats 1974 ch 423 § § 3, effective September 30, 1982; Stats 2003 ch 607 § 1982 ch 1615 35 (SB 1077); Stats 2010 ch 698 § 37 (SB 392), effective January 1, 2011. —See Unemployment Insurance Code Section 10501, Job Training Program: Waiver of Fees, in Appendix. Reserve fund level § 7138.1. Notwithstanding Section 7137, the board shall fix fees to be collec t- ed pursuant to that section in order to generate revenues suffi cient to maintain the board ’s reserve fund at a level not to exceed approx i- mately six months of annual authorized board expenditures. Added Stats 1996 ch 528 § 1 (SB 1597). Amended Stats 2002 ch 744 § 9 (SB 1953). Article 8.5 The Construction Managem ent Education Sponsorship Act of 1991 § 7139. Title of article This article shall be known as the Construction Management Ed u- cation Sponsorship Act of 1991. Added Stats 1991 ch 1158 § 1 (AB 2158).

438 406 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7139.1. Legislative findings and declarations islature hereby finds and declares all of the following: The Leg n- (a) There is a demand and increasing need for construction ma agement education programs and resources within the postsecondary education system that prepare graduates for the management of co n- ’ ion operations and companies regulated by the Contractors struct State License Law and enforced by the Contractors ’ State License Board. (b) Although construction management programs do exist within the state university system, these programs are woefully underf d- un -of-the ed and insufficiently funded to provide training on state -art management information systems for either graduates or exten sion programs for continuing education of licensed contractors. Constru c- ance through di- tion industry associations have provided some assist rect grants and scholarships, but the industrywide service of these programs and the need for additional assistance mandates broad based industrywide support. (c) It is the intent of the Legislature that by enabling contractors to designate a portion of their licensure fee and providing a format for contractors to contribute funds to construction management educ a- tion, this article will receive broad based industry support. In add i- ortance tion, this article allows the contractor to demonstrate the imp of construction management education. This assistance will enable greater development of construction management curricula and will improve the overall quality of construction by providing construction management training to California licensed con tractors and their current and future management personnel. § 1 (AB 2158). Added Stats 1991 ch 1158 § 7139.2. Creation of account (a) There is hereby created the Construction Management Educ a- tion Account (CMEA) as a separate account in the Contractors ’ Li- cense Fund for the purposes of construction management education. Funds in the account shall be available for the purposes of this article upon appropriation by the Legislature. (b) The Contractors ’ State License Board shall allow a contractor to make a c ontribution to the Construction Management Education A c- count at the time of the contractor license fee payment. The license fee form shall clearly display this alternative on its face and shall clearly inform the licensee that this provision is a contribut ion to the Construction Management Education Account and is in addition to the fees. (c) The board may accept grants from federal, state, or local public agencies, or from private foundations or individuals, in order to assist it in carrying out its duties , functions, and powers under this article.

439 CHAPTER 12. CONTRACT ORS LICENSE LAW 407 Grant moneys shall be deposited into the Construction Management Education Account. 15 (SB 1080). § 1 (AB 2158). Amended Stats 2003 ch 807 § Added Stats 1991 ch 1158 § 7139.3. Grant awards (a) The board may award grants to qualified public postsecondary educational institutions for the support of courses of study in co n- struction management. (b) Any organization of contractors, or organization of contractor o r- with Section ganizations, incorporated under Division 2 (commencing 5000) of the Corporations Code may request the board to award grants pursuant to subdivision (a) directly to qualified public postse c- ondary educational institutions of its choice. However, the total amount of money that may be awarded to one public postsecondary educational institution pursuant to subdivision (a) may not exceed an amount equal to 25 percent of the total funds available under this article. (c) The board shall establish an advisory committee to recommend grant awards. The adviso c- ry committee shall be known as the Constru tion Management Education Account Advisory Committee and shall consist of 11 members, with at least one representative from each of the following: Associated General Contractors of California, Associated Builders and Contractors, California Building Industry Association, National Electrical Contractors Association, Plumbing -Heating -Cooling Contractor ’s Association, Southern California Contractor a- ’s Associ and tion,Associated General Contractors of San Diego, Engineering ation, Utility Contractors Association, Engineering Contractors Associ California Sheet Metal and Air Conditioning Contractor ’s Associ ation, and one member representing the California State University and University of California construction manag t programs accredited emen by the American Council for Construction Education. Advisory commi t- tee member terms shall be for three years and the representatives shall be appointed by each identified group. Members of the advisory committee shall not receive per diem or reimbursement for traveling and other expenses pursuant to Se ction 103. (d) The mission of the Construction Management Education A ccount Advisory Committee is to maintain, and increase the quality and avai l- ability of, education programs for the con struction industry. The pr i- mary focus is to provide financial resources not now available to ac- cre dited construction management programs in California co lleges and universities to maintain and upgrade facilities and provide greater a c- cess by the industry t o modern construction standards and manag e- ment practices. The advisory committee shall do all of the fol lowing: (1) Confirm the qualifications of programs applying for grants.

440 408 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (2) Award less than full grants when the account has insufficient funds to award full grants to all qualifying programs. -end reports of use and impact of funds. (3) Receive and review year (4) Affirm applications for American Council for Construction Edu- cation accreditation and, when funds are available, award grants to complete the a ccreditation process. -year (5) Promote close ties between feeder junior colleges and four construction management programs. (6) Support development of new educational programs with specific emphasis on outreach to the construction industry at large. Stats 1991 ch 1158 1 (AB 2934). Added § 1 (AB 2158). Amended Stats 1994 ch 647 § § 7139.4. Postsecondary programs; Qualifications Qualified public postsecondary educational institutions shall pr o- vide postsecondary construction management programs at the bacc a- laureate or higher level that either award or provide one of the follow- ing: (a) A bachelor of science construction management degree accredi t- ed by the American Council for Construction Education. (b) A degree with an American Council for Construction Educat ion o- accredited option, including, but not limited to, engineering technol gy and industrial technology. (c) A bachelor of science or higher degree program documenting placement of more than 50 percent of their graduates with California licensed contractors . The placement of a person who holds a master or doctorate degree in the faculty of a construction program shall be counted as though placed with a California licensed contractor. (d) The development of a construction management curriculum to meet the American Council for Construction Education criteria. Added Stats 1991 ch 1158 § 1 (AB 2158). § 7139.5. Amounts of grants Grants shall be made pursuant to this article to public postsecon d- ary educational institutions that meet the qualifications specified in Section 7139.4 in the following amounts: (a) Three thousand dollars ($3,000) per graduate during the past academic year for institutions qualifying under subdivision (a) of Se c- tion 7139.4. (b) Three thousand dollars ($3,000) per graduate during the past academic year for institutions qualifying under subdivision (b) of Se c- tion 7139.4. (c) Three thousand dollars ($3,000) per graduate placed with Cal i- fornia licensed contractors during the past academic year for instit u- tions qualifying under subdivision (c) of Section 7139.4. These funds

441 CHAPTER 12. CONTRACT ORS LICENSE LAW 409 shall be used for the purpose of becoming accredited by the American Council for Construction Education and shall be available for up to three years. The board may continue to provide this grant to an inst i- tution that in its judgment is meeting the intent of this act and is continuing its development towards accreditation. (d) Institutions qualifying under subdivision (d) of Section 7139.4 may receive a grant in an amount up to twenty -five thousand dollars or up to two years. Thereafter, these institutions ($25,000) per year f may receive grants based upon the criteria described in subdivisions (a) to (c), inclusive. The board may continue to award a grant to an cle institution that in its judgment is meeting the intent of this arti and is continuing its development towards accreditation. § 1 (AB 2158). Added Stats 1991 ch 1158 § 7139.6. Purposes for which grants may be used (a) The grants issued pursuant to Sections 7139.3 and 7139.5 may be used for all of the following: structional materials and support, equipment, curriculum de- (1) In velopment, and delivery. (2) Support and development of outreach, continuing education, and cooperative education or internship programs. (3) Administrative and clerical support positions. (4) Facu lty recruitment and development, to include support for postgraduate work leading to advanced degrees, visiting lecturer compensation and expenses, teaching assistant positions, and faculty positions. (b) Grant moneys may also be used to support general cl assroom and laboratory operating expenses and related administrative su p- plies, including, but not limited to, reference materials, testing equipment, and equipment maintenance. The list of support items in this subdivision and subdivision (a) are intended to be descriptive rather than limiting. “ Support ” does not include faculty salary su p- plements. Added Stats 1991 ch 1158 § 1 (AB 2158). § 7139.7. [Section repealed 2013.] Added Stats 1991 ch 1158 § 1 (AB 2158). Repealed Stats 2012 ch 728 § 14 (SB 71), e f- fective January 1, 2013. The repealed section related to an annual report on the cond i- tion of the grant program. § 7139.8. Report by president of institution receiving grant The president of each public postsecondary educational institution receiving a gr ant under this article shall submit, with its respective request for a grant each year following the initial year for which

442 410 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW grants are issued, a report to the board delineating the amount of the past grant awarded from the Construction Management Education e- Account to that institution and the utilization of those funds. The r port shall include, but not be limited to, the following: (a) The number of graduates placed with the California licensed contractors during the previous academic year. (b) The expected enrollment in construction management courses in the upcoming academic year. (c) Continuing education and extension courses offered during the previous academic year and their enrollments. § 1 (AB 2158). Added Stats 1991 ch 1158 § 7139.9. administration Allocation for The board may allocate up to fifteen thousand dollars ($15,000) per year from the Construction Management Education Account for the administration of this article. § 1 (AB 2158). Added Stats 1991 ch 1158 Intent of Legislature § 7139.10. It is the intent of the Legislature that state funding for the grants authorized to be awarded under this section be provided only from the Contractors ’ License Fund to the extent that funds are available in that fund and that no other state funding be prov ided for those grants. § 1 (AB 2158). Added Stats 1991 ch 1158 Article 9 Renewal of Licenses Expiration of licenses; Renewal of unexpired l icenses § 7140. All licenses issued under the provisions of this chapter shall expire two years from the last day of the month in which the license is i s- sued, or two years from the date on which the renewed license last expired. To renew a license which has not expired, the licensee shall, before the time at which the license would otherwise expire, apply for r e- newal on a form prescribed by the registrar and pay the renewal fee prescribed by this chapter. Renewal of an unexpired license shall co n- tinue the license in effect for the two -year period following the expir a- tion date of the license, when it shall expire if it is not again r enewed. Added stats 1941 ch 971 § 20; Amended Stats 1961 ch 1636 § 9, operative October 1, 1962; Stats 1978 ch 1161 § 367; Stats 1981 ch 583 § 1; Stats 1991 ch 1160 § 39 (AB 2190).

443 CHAPTER 12. CONTRACT ORS LICENSE LAW 411 § 7141. Time for renewal; Effect; Failure to renew pt as otherwise provided in this chapter, a license that has (a) Exce expired may be renewed at any time within five years after its expir a- tion by filing an application for renewal on a form prescribed by the registrar and payment of the appropriate renewal fee. R enewal under this section shall be effective on the date an acceptable renewal appli- i- cation is filed with the board. The licensee shall be considered unl censed and there will be a break in the licensing time between the expiration date and the date the rene wal becomes effective. Except as a- provided in subdivision (b), if the license is renewed after the expir tion date, the licensee shall also pay the delinquency fee prescribed by this chapter. (b) An incomplete renewal application that had originally been submitted on or before the license expiration date shall be returned to the licensee by the registrar with an explanation of the reasons for its rejection. If a corrected and acceptable renewal application is not r e- turned within 30 days after the license exp iration date, the delin- quency fee shall apply. The 30 day grace period shall apply only to the delinquency fee. The license shall reflect an expired status for any period between the expiration date and the date of submission of a correct and acceptable re newal application. (c) If so renewed, the license shall continue in effect through the date provided in Section 7140 that next occurs after the effective date of the renewal, when it shall expire if it is not again renewed. (d) If a license is not renewed within five years, the licensee shall make an application for a license pursuant to Section 7066. 20. Amended Stats 1961 ch 1636 § Added Stats 1941 ch 971 § 10, operative October 1, 1962; Stats 1970 ch 856 § 1; Stats 1972 ch 1138 § 4.7; Stats 1983 ch 891 § 31; Stats 3.9 (AB 1678); Stats 2002 ch 1013 § 62 (SB 2026); Stats 2003 ch 607 § 1999 ch 982 § 36 (SB 1077); Stats 2013 ch 319 § 9 (SB 822), effective January 1, 2014. § 7141.5. Retroactive issuance of license after failure to renew The registrar may gra nt the retroactive renewal of a license if the licensee requests the retroactive renewal in a petition to the regi s- trar, files an application for renewal on a form prescribed by the re g- istrar, and pays the appropriate renewal fee and delinquency fee pr e- scr ibed by this chapter. This section shall only apply for a period not to exceed 90 days from the due date and only upon a showing by the contractor that the failure to renew was due to circumstances beyond the control of the licensee. Added Stats 1972 ch 1138 § 5. Amended Stats 1975 ch 329 § 4; Stats 1983 ch 891 § 32; Stats 1984 ch 1174 § 11.

444 412 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7143. Renewal of suspended license A license that is suspended for any reason which constitutes a basis for suspension under this chapter, is subject to expiration and shall be renewed as provided in this chapter, but this renewal does not en- title the licensee, while the license remains suspended, and until it is reinstated, to engage in any activity to which the license relates, or in any other activity or conduct i n violation of the order or judgment by which the license was suspended. Added Stats 1941 ch 971 § 20. Amended Stats 1961 ch 1636 § 12, operative October 1, 7; Stats 1987 ch 930 1962; Stats 1972 ch 1138 § § 8, effective September 22, 1987; Stats 2003 ch 363 § 8 (AB 1382). Application for new license by person prohi § 7143.5. bited from renewing i- A person who, by reason of the provisions of Section 7141, is not ent tled to renew his license, may apply for and obtain a new license only if he pays all of the fees and meets all of the qualifications and requir e- ments set forth in this chapter for obtaining an original li cense. Added Stats 1961 ch 1636 § 13, operative October 1, 1962. Amended Stats 1972 ch 1138 § 8. § 7144. Reinstatement of revoked license oked license shall be considered as having expired as of the A rev date of revocation and shall not be renewed. To reinstate a revoked license a licensee may apply for reinstatement of the license only if he ns and requir e- pays all of the fees and meets all of the qualificatio ments set forth in this chapter for obtaining an original license. Added Stats 1941 ch 971 § 20. Amended Stats 1961 ch 1636 § 14, operative October 1, 1962; Stats 1974 ch 433 § 3. § 7145. Incompleteness of application as grounds for r efusal to renew license; Abandonment of application; Petition The registrar may refuse to renew a license for the failure or r e- fusal by the licensee to complete the renewal application prescribed by the registrar. If a licensee fails to return an application for rene w- al which was rejected for insufficiency or incompleteness within 90 days from the original date of rejection, the application and fee shall be deemed abandoned. Any application abandoned may not be rein- stated. However, the applicant may file another application accomp a- nied by the required fee. The registrar may review and accept the petition of a licensee who disputes the invalidation of his or her application for renewal upon a

445 CHAPTER 12. CONTRACT ORS LICENSE LAW 413 showing of good cause. This petition shall be received within 90 days fro m the date the renewal application is deemed abandoned. § 2; Stats 1984 ch 1174 § 20. Amended Stats 1970 ch 524 § 12. Added Stats 1941 ch 971 § 7145.5. Failure to resolve outstanding liabilities as grounds for refusal to renew license (a) The registrar m ay refuse to issue, reinstate, reactivate, or renew e- a license or may suspend a license for the failure of a licensee to r solve all outstanding final liabilities, which include taxes, additions to tax, penalties, interest, and any fees that may be assessed by the e- board, the Department of Industrial Relations, the Employment D velopment Department, the Franchise Tax Board, or the State Board of Equalization. (1) Until the debts covered by this section are satisfied, the qualify- nel of record named on a l ing person and any other person icense that has been suspended under this section shall be prohibited from ser v- ing in any capacity that is subject to licensure under this chapter, but shall be permitted to act in the capacity of a nonsupe rvising bona fide employ ee. (2) The license of any other renewable licensed entity with any of the same personnel of record that have been assessed an ou tstanding liability covered by this section shall be suspended until the debt has been satisfied or until the same personnel of record disassociate themselves from the renewable licensed entity. (b) The refusal to issue a license or the suspension of a license as provided by this section shall be applicable only if the registrar has spension that indi- mailed a notice preliminary to the refusal or su cates that the license will be refused or suspended by a date certain. This preliminary notice shall be mailed to the licensee at least 60 days before the date certain. (c) In the case of outstanding final liabilities assessed by the Fran- chise Tax Board, this section shall be operative within 60 days after the Contractors ’ State License Board has provided the Franchise Tax Board with the information required under Section 30, relating to licensing information that includes the federal empl a- oyer identific tion number, individual taxpayer identification number, or social s e- curity number. (d) All versions of the application for contractors ’ licenses shall in- clude, as part of the application, an authorization by the applicant, in the form and ma nner mutually agreeable to the Franchise Tax Board and the board, for the Franchise Tax Board to disclose the tax info r- mation that is required for the registrar to administer this section. The Franchise Tax Board may from time to time audit these author i- zations.

446 414 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW (e) In the case of outstanding final liabilities assessed by the State Board of Equalization, this section shall not apply to any outstanding final liability if the licensee has entered into an installment payment he State Board of Equalization and agreement for that liability with t is in compliance with the terms of that agreement. Added Stats 1990 ch 1386 § 6 (AB 2282). Amended Stats 2006 ch 122 § 1 (AB 2456), effective January 1, 2007; Stats 2007 ch 130 § 29 (AB 299), effective January 1, 2008; 30 (SB § 1 (AB 1307), effective January 1, 2012; Stats 2017 ch 573 § Stats 2011 ch 734 800), effective January 1, 2018. Article 10 Home Improvement Business “ § 7150. ” Person ” as used in this article is limited to natural persons, no “Person t- withstanding t he definition of person in Section 7025. § 1. Amended Stats 1972 ch 1138 Added Stats 1961 ch 1021 § 9. § 7150.1. “ Home improvement contractor ” A home improvement contractor, including a swimming pool co n- tractor, is a contractor as defined and licensed un der this chapter who is engaged in the business of home improvement either full time or part time. A home improvement contractor shall satisfy all requir e- ments imposed by this article. § 1 as § 7026.2. Amended and renumbered Stats 1972 ch Added Stats 1969 ch 1583 1138 § 1.1. Amended Stats 1991 ch 1160 § 40 (AB 2190). Amended Stats 1997 ch 888 § 1 (AB 1213). [Section repealed 2004.] § 7150.2. Added Stats 1997 ch 888 § 2 (AB 1213). Repealed, operative January 1, 2004, by its own terms. The repealed section related to certification for home improvement contra c- tors. § 7150.3. [Section repealed 2004.] Added Stats 1997 ch 888 § 3 (AB 1213). Repealed, operative January 1, 2004, by its own terms. The repealed section related to qualification for home improvement con- tractor. § 7151. “ Home improvement ”; “Home improvement goods or services ” “Home improvement ” means the repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property and shall include, but not be limited to, the co nstruction, erection, re-

447 CHAPTER 12. CONTRACT ORS LICENSE LAW 415 placement, or improvement of driveways, swimming pools, including spas and hot tubs, terraces, patios, awnings, storm windows, lan d- scaping, fences, porches, garages, fallout shelters, basements, and res or land which is adjacent to a other improvements of the structu Home improvement ” shall also mean the install ation dwelling house. “ of home improvement goods or the furnishing of home improv ement services. For purposes of this chapter, “ home improvement goods or services ” means goods and services, as defined in Section 1689.5 of the Civil Code, which are bought in connection with the improvement of real property. Such home improvement goods and services include, but are ing or not limited to, carpeting, texture coating, fencing, air condition heating equipment, and termite extermination. Home improvement goods include goods which are to be so affixed to real property as to become a part of real property whether or not severable ther efrom. § 1. Amended Stats 1969 ch 1583 Added Stats 1961 ch 1021 § 10; Stats 1979 ch 1012 § 2; Stats 1980 ch 138 § 3, effective May 30, 1980; Stats 1981 ch 916 § 2; Stats 1982 ch 1210 § 2; Stats 1991 ch 1160 § 41 (AB 2190). § 7151.2. “ Home improvement contract ” “Home improvement contract ” means an agreement, w hether oral c- or written, or contained in one or more documents, between a contra tor and an owner or between a contractor and a tenant, regardless of the number of residence or dwelling units contained in the building in which the tenant resides, if the wor k is to be performed in, to, or upon the residence or dwelling unit of the tenant, for the performance of a home improvement as defined in Section 7151, and includes all labor, services, and materials to be furnished and performed thereunder. “Home improve ment contract ” also means an agreement, whether oral or written, or contained in one or more documents, between a salesperson, whether or not he or she is a home improvement sales- person, and (a) an owner or (b) a tenant, regardless of the number of residen ce or dwelling units contained in the building in which the tenant resides, which provides for the sale, installation, or furnishing of home improvement goods or services. Added Stats 1969 ch 1583 § 11. Amended Stats 1979 ch 1012 § 3; Stats 1991 ch 1160 § 42 (AB 2190). —See Civil Code Sections 1689.5, Home Solicitation Contract;1689.6, Cancellation of Home Solicitation Contract;1689.7, Form of Notice of Cancellation; 1689.8 Contract which provides for Lien; 1689.9, Exemptions: 1689.10, After Cancellation, S eller to R e- turn Downpayment; 1689.11, Buyer to Return Goods; 1689.12, Invalidity of Waiver of Statute; 1689.13, Notice Not Required for Emergency Situations; 1689.14, Void Co n- tracts, in Appendix.

448 416 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND RELATED LAW § 7152. ” “ Home improvement salesperson nt salesperson” is a person who is registered (a) “Home improveme under this chapter and engaged in the business of soliciting, selling, negotiating, or executing contracts for home improvements, for the sale, installation or furnishing of home improvement goods or ser- m- vices, or of swimming pools, spas, or hot tubs on behalf of a home i provement contractor licensed under this chapter. (b) A home improvement salesperson shall register with the board in order to engage in the business of, or act in the capacity of, a home improv ement salesperson. m- (c) The following shall not be required to be registered as home i provement salespersons: (1) An officer of record of a corporation licensed pursuant to this chapter, or a manager , member, or officer of record of a limited liabi l- ity co mpany licensed pursuant to this chapter. (2) A general partner listed on the license record of a partnership l i- censed pursuant to this chapter. (3) A qualifying person, as defined in Section 7025. (4) A salesperson whose sales are all made pursuant to neg otiations between the parties if the negotiations are initiated by the prospec- tive buyer at or with a general merchandise retail establis hment that operates from a fixed location where goods or services are offered for sale. (5) A person who contacts the pr ospective buyer for the exclusive e- purpose of scheduling appointments for a registered home improv ment salesperson. (6) A bona fide service repairperson who is in the employ of a l i- censed contractor and whose repair or service call is limited to the servic e, repair, or emergency repair initially requested by the buyer of the service. (d) The exemption to registration provided under paragraphs (1), (2), and (3) of subdivision (c) 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 con- tracting for a service or improvement that is subject to regulation u n- der this article. Added Stats 1972 ch 1138 § 11. Amended Stats 1973 ch 115 § 1, effect ive June 26, 1973; Stats 1979 ch 1012 § § 4, effective May 30, 1980; Stats 1982 4; Stats 1980 ch 138 ch 585 § 1; Stats 1985 ch 1281 § 4; Stats 1991 ch 1160 § 43 (AB 2190); Stats 2006 ch 106 § 4 (AB 2457), effective January 1, 2007; Stats 2010 ch 698 § 38 ( SB 392), effective January 1, 2011; Stats 2015 ch 281 § 2 (SB 561), effective January 1, 2016. —See Civil Code Sections 1804.3, Security Interest in Goods Paid For Not Sold; Securi- ty Interest unreal Property for Sale of Unattached Goods; 1805.6, Undelivered Goods; 1810.10, Finance Charge, in A ppendix.

449 CHAPTER 12. CONTRACT ORS LICENSE LAW 417 § 7153. Selling without registration (a) 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, at the ti r- me of the sales transaction, a cu rent and valid home improvement salesperson registration issued by the registrar. If, upon investigation, the registrar has probable cause to believe that a salesperson is in violation of this section, the regis- sue a citation pursuant to Section 7028.7. trar may is It is a misdemeanor for any person to engage in the occupation of salesperson of home improvement goods or services within this state without having, at the time of the sales transaction, a current and valid home improvement salesperson registration issued by the regi s- trar. y- (b) Any security interest taken by a contractor, to secure any pa ment for the performance of any act or conduct described in Section 7151 that occurs on or after January 1, 1995, is unenforceable if the person soliciting the act or contract was not a duly registered sales- person or was not exempt from registration pursuant to Section 7152 at the time the homeowner signs the home improvement contract s o- licited by the salesperson. Added Stats 1972 ch 1138 § 13. Amended Stats 1979 ch 1012 § 5; Stats 1994 ch 888 § 1 (AB 3269); Stats 2001 ch 728 § 63 (SB 724); Stats 2015 ch 281 § 3 (SB 561), effective January 1, 2016. Salesperson § 7153.1. ’s application for registration; Grounds for denial; Fingerpri nts of applicants; Criminal hi story and subsequent arrest information s- (a) The home improvement salesperson shall submit to the regi trar an application in writing containing the statement that he or she desires the issuance of a registration under the term s of this a rticle. The application shall be made on a form prescribed by the registrar and shall be accompanied by the fee fixed by this chapter. (b) The registrar may refuse to register the applicant under the grounds specified in Section 480. (c) As part of an application for a home improvement salesperson, the board shall require an applicant to furnish a full set of finge r- prints for purposes of conducting criminal history record checks. Fi n- gerprints furnished pursuant to this subdivision shall be submit ted in an electronic format where 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 appl i- cant to obtain criminal history information on the applicant from the Department of Justice and the United States Federal Bureau of I n- vestigation, including any subsequent arrest information available.

450 418 SECTION VI. LICENSE LAW, RULES, REGULATI S ONS, AND R