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Measure

SB 779

Authors

Archuleta

Subject

Contractors: civil penalties.

Relating To

relating to contractors.

Title

An act to amend Section 7138.1 of, and to amend, repeal, and add Sections 7028.7 and 7099.2 of, the Business and Professions Code, relating to contractors.

Last Action Dt

2025-10-01

State

Chaptered

Status

Chaptered

Active?

Vote Required

Majority

Appropriation

Fiscal Committee

Yes

Local Program

Substantive Changes

None

Urgency

Tax Levy

Leginfo Link

Bill

Actions

2025-10-01		Chaptered by Secretary of State. Chapter 233, Statutes of 2025.
2025-10-01		Approved by the Governor.
2025-09-22		Enrolled and presented to the Governor at 11 a.m.
2025-09-11		Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2876.) Ordered to engrossing and enrolling.
2025-09-09		In Senate. Concurrence in Assembly amendments pending.
2025-09-09		Read third time. Passed. (Ayes 80. Noes 0. Page 3079.) Ordered to the Senate.
2025-09-04		Ordered to third reading.
2025-09-04		Read third time and amended.
2025-09-02		Read second time. Ordered to third reading.
2025-08-29		From committee: Do pass. (Ayes 15. Noes 0.) (August 29).
2025-07-16		July 16 set for first hearing. Placed on APPR. suspense file.
2025-07-02		Read second time and amended. Re-referred to Com. on APPR.
2025-07-01		From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 17. Noes 0.) (July 1).
2025-06-17		From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & P.
2025-06-09		Referred to Com. on B. & P.
2025-06-04		In Assembly. Read first time. Held at Desk.
2025-06-03		Read third time. Passed. (Ayes 39. Noes 0. Page 1471.) Ordered to the Assembly.
2025-05-06		Read second time. Ordered to third reading.
2025-05-05		From committee: Be ordered to second reading pursuant to Senate Rule 28.8.
2025-04-25		Set for hearing May 5.
2025-04-23		From committee: Do pass and re-refer to Com. on APPR. (Ayes 13. Noes 0. Page 837.) (April 22). Re-referred to Com. on APPR.
2025-04-07		From committee: Do pass and re-refer to Com. on JUD. (Ayes 10. Noes 0. Page 680.) (April 7). Re-referred to Com. on JUD.
2025-04-04		Set for hearing April 22 in JUD. pending receipt.
2025-04-01		From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. P. & E.D.
2025-03-18		Set for hearing April 7.
2025-03-12		Referred to Coms. on B. P. & E.D. and JUD.
2025-02-24		From printer. May be acted upon on or after March 24.
2025-02-24		Read first time.
2025-02-21		Introduced. To Com. on RLS. for assignment. To print.

Keywords

Tags

Versions

Chaptered		2025-10-01
Enrolled		2025-09-16
Amended Assembly		2025-09-04
Amended Assembly		2025-07-02
Amended Assembly		2025-06-17
Amended Senate		2025-04-01
Introduced		2025-02-21

Last Version Text

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		<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Archuleta</ns0:AuthorText>
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				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Archuleta</ns0:Name>
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		<ns0:Title>An act to amend Section 7138.1 of, and to amend, repeal, and add Sections 7028.7 and 7099.2 of, the Business and Professions Code, relating to contractors. </ns0:Title>
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			<ns0:Subject>Contractors: civil penalties.</ns0:Subject>
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			<html:p>Existing law, the Contractors State License Law, provides for the licensure and regulation of contractors by the Contractors State License Board in the Department of Consumer Affairs. Under existing law, willful or deliberate disregard by a licensed contractor of various state building, labor, and safety laws constitutes a cause for disciplinary action by the board. Existing law provides for related disciplinary proceedings and requires the board to promulgate regulations covering the assessment of civil penalties under those disciplinary provisions, as prescribed. Existing law authorizes a civil penalty not less than $200 and not to exceed $15,000 for certain violations relating to unlicensed persons, as specified. Existing law authorizes a civil penalty not to exceed $8,000 or $30,000 for
			 other violations of the Contractors State License Law, as provided.</html:p>
			<html:p>This bill, commencing July 1, 2026, would increase the minimum civil penalties for violations related to unlicensed persons to at least $1,500 and would impose minimum civil penalties of at least $500 or $1,500 for other specified violations, as provided. The bill would also authorize the Contractors State License Board to adjust the amounts of these minimum civil penalties for inflation every 5 years, as provided.</html:p>
			<html:p>Existing law authorizes the board to set specified fees according to a prescribed schedule. Existing law, notwithstanding this fee schedule, authorizes the board to set fees to maintain the amount of the reserve fund at a level not to exceed approximately 6 months of annual authorized board expenditures.</html:p>
			<html:p> This bill would increase the above-described limit on the reserve fund to a level not to exceed
			 approximately 12 months of annual authorized board expenditures.</html:p>
			<html:p>This bill would incorporate additional changes to Section 7099.2 of the Business and Professions Code proposed by SB 291 to be operative only if this bill and SB 291 are enacted and this bill is enacted last.</html:p>
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		<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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			<ns0:Num>SECTION 1.</ns0:Num>
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				Section 7028.7 of the 
				<ns0:DocName>Business and Professions Code</ns0:DocName>
				 is amended to read:
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								(a)
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								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 or salesperson within this state without having a license or registration in good standing to so act or engage, and the person is not otherwise exempted from this chapter, the registrar shall issue a citation to that person.
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								(b)
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								Within 72 hours of receiving notice that a public entity is intending to award, or has awarded, a contract to an unlicensed contractor, the registrar shall give written notice to the public entity that a citation may be issued if a contract is awarded to an unlicensed
						contractor. If after receiving the written notice from the registrar that the public entity has awarded or awards the contract to an unlicensed contractor, the registrar may issue a citation to the responsible officer or employee of the public entity as specified in Section 7028.15.
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								(c)
								<html:span class="EnSpace"/>
								Each citation shall be in writing and shall describe with particularity the basis of the citation. Notwithstanding Sections 125.9 and 148, each citation shall contain an order of abatement and an assessment of a civil penalty in an amount not less than two hundred dollars ($200) nor more than fifteen thousand dollars ($15,000).
							</html:p>
							<html:p>
								(d)
								<html:span class="EnSpace"/>
								With the approval of the Contractors State License Board, the registrar shall prescribe procedures for the issuance of a citation under this section. The board shall
						adopt regulations covering the assessment of a civil penalty that shall give due consideration to the gravity of the violation, and any history of previous violations.
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							<html:p>
								(e)
								<html:span class="EnSpace"/>
								The sanctions authorized under this section shall be separate from, and in addition to, all other remedies either civil or criminal.
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							<html:p>
								(f)
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								This section shall remain in effect only until July 1, 2026, and as of that date is repealed.
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				Section 7028.7 is added to the 
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				, to read:
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								(a)
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								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 or salesperson within this state without having a license or registration in good standing to so act or engage, and the person is not otherwise exempted from this chapter, the registrar shall issue a citation to that person.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								Within 72 hours of receiving notice that a public entity is intending to award, or has awarded, a contract to an unlicensed contractor, the registrar shall give written notice to the public entity that a citation may be issued if a contract is awarded to an unlicensed
						contractor. If after receiving the written notice from the registrar that the public entity has awarded or awards the contract to an unlicensed contractor, the registrar may issue a citation to the responsible officer or employee of the public entity as specified in Section 7028.15.
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							<html:p>
								(c)
								<html:span class="EnSpace"/>
								Each citation shall be in writing and shall describe with particularity the basis of the citation. Notwithstanding Sections 125.9 and 148, each citation shall contain an order of abatement and an assessment of a civil penalty in an amount not less than fifteen hundred dollars ($1,500) nor more than fifteen thousand dollars ($15,000).
							</html:p>
							<html:p>
								(d)
								<html:span class="EnSpace"/>
								With the approval of the Contractors State License Board, the registrar shall prescribe procedures for the issuance of a citation under this section. The board
						shall adopt regulations covering the assessment of a civil penalty that shall give due consideration to the gravity of the violation, and any history of previous violations.
							</html:p>
							<html:p>
								(e)
								<html:span class="EnSpace"/>
								The sanctions authorized under this section shall be separate from, and in addition to, all other remedies either civil or criminal.
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							<html:p>
								(f)
								<html:span class="EnSpace"/>
								The board may adjust the minimum civil penalties imposed by this section for inflation every five years. The adjustment shall be equivalent to the percentage, if any, that the Consumer Price Index, as determined pursuant to Section 2212 of the Revenue and Taxation Code, exceeds the Consumer Price Index at the time this subdivision goes into effect. Any increase determined under this paragraph shall be rounded in multiples of one hundred dollars ($100) for penalties greater than one
						hundred dollars ($100).
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							<html:p>
								(g)
								<html:span class="EnSpace"/>
								This section shall become operative on July 1, 2026.
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			<ns0:Num>SEC. 3.</ns0:Num>
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				Section 7099.2 of the 
				<ns0:DocName>Business and Professions Code</ns0:DocName>
				 is amended to read:
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					<ns0:Num>7099.2.</ns0:Num>
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								(a)
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								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:
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							<html:p>
								(1)
								<html:span class="EnSpace"/>
								The gravity of the violation.
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							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The good faith of the licensee or applicant for licensure being charged.
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							<html:p>
								(3)
								<html:span class="EnSpace"/>
								The history of previous violations.
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							<html:p>
								(b)
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								Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount
						greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114, 7118, or 7125.4.
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							<html:p>
								(c)
								<html:span class="EnSpace"/>
								This section shall remain in effect only until July 1, 2026, and as of that date is repealed.
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			<ns0:Num>SEC. 3.5.</ns0:Num>
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				Section 7099.2 of the 
				<ns0:DocName>Business and Professions Code</ns0:DocName>
				 is amended to read:
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					<ns0:Num>7099.2.</ns0:Num>
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								(a)
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								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:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								The gravity of the violation.
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							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The good faith of the licensee or applicant for licensure being charged.
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							<html:p>
								(3)
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								The history of previous violations.
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								(b)
								<html:span class="EnSpace"/>
								Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall not be assessed in an amount greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a
						civil penalty not to exceed thirty thousand dollars ($30,000) may be assessed for a violation of Section 7110, 7114,
						or 7118.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								This section shall remain in effect only until July 1, 2026, and as of that date is repealed.
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			<ns0:Num>SEC. 4.</ns0:Num>
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				Section 7099.2 is added to the 
				<ns0:DocName>Business and Professions Code</ns0:DocName>
				, to read:
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				<ns0:LawSection id="id_ADF74771-0DE7-43C1-95F1-CAA47DF7E7F4">
					<ns0:Num>7099.2.</ns0:Num>
					<ns0:LawSectionVersion id="id_BAB6AC8A-2C70-4662-8705-CBC4E10EA9AB">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								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:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								The gravity of the violation.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The good faith of the licensee or applicant for licensure being charged.
							</html:p>
							<html:p>
								(3)
								<html:span class="EnSpace"/>
								The history of previous violations.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								(1)
								<html:span class="EnSpace"/>
								Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall be assessed in an
						amount not less than five hundred dollars ($500) nor greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty shall be assessed in an amount not less than one thousand five hundred dollars ($1,500) nor greater than thirty thousand dollars ($30,000) for a violation of Section 7110, 7114, 7118, or 7125.4.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The board may adjust all minimum civil penalties imposed by this section for inflation every five years. The adjustment shall be equivalent to the percentage, if any, that the Consumer Price Index, as determined pursuant to Section 2212 of the Revenue and Taxation Code, exceeds the Consumer Price Index at the time this subdivision goes into effect. Any increase determined under this paragraph shall be rounded as follows:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								In
						multiples of one hundred dollars ($100) for penalties greater than one hundred dollars ($100) but less than or equal to one thousand dollars ($1,000).
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								In multiples of one thousand dollars ($1,000) for penalties greater than one thousand dollars ($1,000).
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								This section shall become operative on July 1, 2026.
							</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_380BD17C-97E6-46B6-AB68-F7FC2D3B5A4B">
			<ns0:Num>SEC. 4.5.</ns0:Num>
			<ns0:ActionLine action="IS_ADDED" ns3:href="urn:caml:codes:BPC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'9.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'7.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'7099.2.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
				Section 7099.2 is added to the 
				<ns0:DocName>Business and Professions Code</ns0:DocName>
				, to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_270737F5-7417-4EEA-AD3A-5CCA78BC5E64">
					<ns0:Num>7099.2.</ns0:Num>
					<ns0:LawSectionVersion id="id_09ACE748-659B-404E-8A65-5DF583BF2500">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								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:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								The gravity of the violation.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The good faith of the licensee or applicant for licensure being charged.
							</html:p>
							<html:p>
								(3)
								<html:span class="EnSpace"/>
								The history of previous violations.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								(1)
								<html:span class="EnSpace"/>
								Notwithstanding Section 125.9, and except as otherwise provided by this chapter, a civil penalty shall be assessed in an amount not less than five hundred dollars
						($500) nor greater than eight thousand dollars ($8,000). Notwithstanding Section 125.9, a civil penalty shall be assessed in an amount not less than one thousand five hundred dollars ($1,500) nor greater than thirty thousand dollars ($30,000) for a violation of Section 7110, 7114, or 7118.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The board may adjust all minimum civil penalties imposed by this section for inflation every five years. The adjustment shall be equivalent to the percentage, if any, that the Consumer Price Index, as determined pursuant to Section 2212 of the Revenue and Taxation Code, exceeds the Consumer Price Index at the time this subdivision goes into effect. Any increase determined under this paragraph shall be rounded as follows:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								In multiples of one hundred dollars ($100) for penalties greater than one hundred dollars ($100) but less than or equal to one thousand dollars ($1,000).
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								In multiples of one thousand dollars ($1,000) for penalties greater than one thousand dollars ($1,000).
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								This section shall become operative on July 1, 2026. 
							</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_27BEB4AF-43DA-4FE8-B50E-54B34A504E9C">
			<ns0:Num>SEC. 5.</ns0:Num>
			<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:BPC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'9.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'8.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'7138.1.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
				Section 7138.1 of the 
				<ns0:DocName>Business and Professions Code</ns0:DocName>
				 is amended to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_72115984-743D-46C0-9894-97038CDFC764">
					<ns0:Num>7138.1.</ns0:Num>
					<ns0:LawSectionVersion id="id_C2ECC7F6-DDC1-4EE4-9E37-EFBF33F8D6EF">
						<ns0:Content>
							<html:p>Notwithstanding Section 7137, the board shall fix fees to be collected pursuant to that section in order to generate revenues sufficient to maintain the board’s reserve fund at a level not to exceed approximately 12 months of annual authorized board expenditures.</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_FC615ABC-5CE9-410F-83ED-96DE180C65AF">
			<ns0:Num>SEC. 6.</ns0:Num>
			<ns0:Content>
				<html:p>Sections 3.5 and 4.5 of this bill incorporate amendments to Section 7099.2 of the Business and Professions Code proposed by both this bill and Senate Bill 291. Those sections of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) this bill amends, adds, and repeals Section 7099.2 of the Business and Professions Code and Senate Bill 291 amends Section 7099.2 of the Business and Professions Code, and (3) this bill is enacted after Senate Bill 291, in which case Sections 3 and 4 of this bill shall not become operative.</html:p>
			</ns0:Content>
		</ns0:BillSection>
	</ns0:Bill>
</ns0:MeasureDoc>

Last Version Text Digest

Existing law, the Contractors State License Law, provides for the licensure and regulation of contractors by the Contractors State License Board in the Department of Consumer Affairs. Under existing law, willful or deliberate disregard by a licensed contractor of various state building, labor, and safety laws constitutes a cause for disciplinary action by the board. Existing law provides for related disciplinary proceedings and requires the board to promulgate regulations covering the assessment of civil penalties under those disciplinary provisions, as prescribed. Existing law authorizes a civil penalty not less than $200 and not to exceed $15,000 for certain violations relating to unlicensed persons, as specified. Existing law authorizes a civil penalty not to exceed $8,000 or $30,000 for other violations of the Contractors State License Law, as provided. This bill, commencing July 1, 2026, would increase the minimum civil penalties for violations related to unlicensed persons to at least $1,500 and would impose minimum civil penalties of at least $500 or $1,500 for other specified violations, as provided. The bill would also authorize the Contractors State License Board to adjust the amounts of these minimum civil penalties for inflation every 5 years, as provided. Existing law authorizes the board to set specified fees according to a prescribed schedule. Existing law, notwithstanding this fee schedule, authorizes the board to set fees to maintain the amount of the reserve fund at a level not to exceed approximately 6 months of annual authorized board expenditures. This bill would increase the above-described limit on the reserve fund to a level not to exceed approximately 12 months of annual authorized board expenditures. This bill would incorporate additional changes to Section 7099.2 of the Business and Professions Code proposed by SB 291 to be operative only if this bill and SB 291 are enacted and this bill is enacted last.