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CLSB Alerts Contractors to New Regulations and Laws

Regulations effective December 30, 2009; law changes effective January 1, 2010

SACRAMENTO -The Contractors State License Board (CSLB) is alerting contractors to new regulations and laws that become effective this week, and that may impact their business operations.

Legislation passed by the Senate and Assembly and signed into law by Governor Schwarzenegger in 2009 made changes in the California Business & Professions (B&P) Code to increase the penalties for contracting without a license; eliminate sanctions against unlicensed owner-builders; and modify mechanic's lien notification (which takes effect in 2011). Changes to the California Code of Regulations that were approved by the Office of Administrative Law become effective December 30, 2009, and make changes to the C-45 Sign and C-46 Solar license classifications; re-examination for original licenses and added classifications; and definitions of contractor advertising.

Significant 2009 legislative changes to B&P Code are as follows:

Penalties for Unlicensed Contracting Increased
AB 370 (Eng) Business & Professions Code § 7028 and 7028.16

This bill increases the penalties for contracting without a license for those who perform works of home improvement valued at $500 or more for labor and materials. Those convicted of a first offense will be subject to up to $5,000 in fines, and/or up to six months in county jail. For a second offense, those contracting without a license could face fines of up to 20 percent of the payments they received, or up to $5,000, whichever is greater, and not less than 90 days in county jail. A third offense for contracting without a license will be subject to between $5,000 and $10,000 in fines or 20 percent of payments made to the unlicensed contractor, whichever is greater, and up to one year in county jail. This bill also amends the law to include that a person who used the services of an unlicensed contractor is considered a victim of a crime and eligible for restitution, regardless of whether that person knew the contractor did not have a license. (Amended Stats 2009 ch 319 § 1 and 2, effective January 1, 2010.)

Owner-Builder Law Clarified
SB 821 (Senate Business, Professions & Economic Development Committee) Business & Professions Code § 7028.7, 7044, 7044.01, 7108.5 (repeal and add), 7159, 7159.5, and 7159.14.

This bill deletes the provision under existing law that a person who violates the law by engaging in work as an owner-builder without a contractor license (or an exemption from licensure) is prohibited from obtaining a contractor license for a period of one year following the violation. In addition, the bill includes clean-up language for several provisions of Contractors State License Law, making technical, nonsubstantive changes to those provisions. (Amended Stats 2009 ch 307 § 69-76, effective January 1, 2010.)

Mechanic's Lien Notices (Effective 2011)
AB 457 (Monning) Civil Code § 3084 and 3146

This bill provides that the definitions of "claim of lien" and "mechanic's lien" are the same. It also requires that a Notice of Mechanic's Lien be served on the owner or person believed to be the owner of the property or on the construction lender or original contractor, and that a "proof of service affidavit" to the above mentioned party or parties be completed and signed by the person serving the Notice of Mechanic's Lien. Failure to serve the mechanic's lien and confirm a proof of service affidavit will cause the mechanic's lien to be unenforceable. (Amended Stats 2009 ch 109 § 1 and 2, effective January 1, 2011.)

Following are the California Code of Regulations changes approved by the Office of Administrative Law:

C-45 "Electrical Sign Contractor" changed to Sign Contractor
California Code of Regulations § 832.45

This change in the regulation adds non-electrical signs including, but not limited to, those now covered by the regulation. (Authority cited: Business & Professions Code § 7008 and § 7059. Reference: Business & Professions § 7058 and § 7059.)

C-46 Solar Contractor references to "Exam Development" and "Active System" definition Deleted
California Code of Regulations § 832.46

This change in the regulation deletes obsolete reference to the classification being issued when an exam is developed, and changes references from "active" solar energy systems to "thermal and photovoltaic" solar energy systems and removes the definition of "active" systems. The updated language reflects current terminology and is more general to allow for future innovations in the field. (Authority cited: Business & Professions Code § 7008 and §7059. Reference: Business & Professions § 7058 and §7059.)

Re-Examination Section Repealed
California Code of Regulations § 842

This change in regulation repeals Section 842, which allowed an applicant for an original license, additional classification, or change of qualifier that failed the exam or failed to take it to apply for re-examination twice within 90 days of notification of the failure. This section was inconsistent with B&P Code Section 7074 that allows unlimited re-examination within 18 months of the Board's acceptance of the application. (Authority cited: Business & Professions Code § 7008. Reference: Business & Professions Code § 7065, §7074, and §7137.)

"License Number in Advertising" changed to Advertising Defined
California Code of Regulations § 861

This change in the regulation adds "electronic transmission" to what constitutes an advertisement and changes the title of the regulation to "Advertising Defined," from "License Number Required in Advertising," to more accurately reflect the regulation's content. Also, the exemption provision was deleted, as statute does not give the Registrar the authority to grant such exemptions. (Authority cited Business & Professions Code §7008. Reference: Business & Professions Code § 7030.5)

To see the full text of the bill visit:
http://www.cslb.ca.gov/About_Us/Library/Laws/

Look for these law and regulation changes in the 2010 edition of CSLB's California Contractors License Law & Reference Book scheduled for release in early January, which can be accessed on the CSLB Web site: www.cslb.ca.gov. Regulatory changes to the classifications will also be updated in CSLB's publication Description of Classifications, which is also available at www.cslb.ca.gov or by calling 1-800-321-CSLB.

 

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