Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law makes it a misdemeanor for a person to act as a contractor without a license, unless exempted. Existing law exempts from the Contractors State License Law a work or operation on one undertaking or project by one or more contracts, if the aggregate contract price for labor, material, and all other items is under $500, except as specified.

This bill would revise the exemption by increasing the maximum aggregate contract price to $1,000 and specifying that the exemption would apply if the work or operation does not require a building permit. The bill would specify that the exemption would not apply to a person who employs another person to perform, or assist in performing, the work or operation. By narrowing the exemption from the licensing requirement, the bill would expand a crime and, thereby, impose a state-mandated local program.

Existing law makes it a misdemeanor for a person to advertise for construction work or work of improvement without a license. Existing law authorizes a person who is not licensed to advertise for construction work or work of improvement if the aggregate contract price for labor, material, and all other items on a project or undertaking is under $500 and the person states in the advertisement that the person is not licensed.

This bill would expand the advertising authorization by increasing the aggregate contract price to $1,000.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law makes it a misdemeanor for a person to act as a contractor without a license, unless exempted. Existing law exempts from the Contractors State License Law a work or operation on one undertaking or project by one or more contracts, if the aggregate contract price for labor, material, and all other items is under $500, except as specified.

This bill would revise the exemption by increasing the maximum aggregate contract price to $1,000 and specifying that the exemption would apply if the work or operation does not require a building permit. The bill would specify that the exemption would not apply to a person who employs another person to perform, or assist in performing, the work or operation. By narrowing the exemption from the licensing requirement, the bill would expand a crime and, thereby, impose a state-mandated local program.

Existing law makes it a misdemeanor for a person to advertise for construction work or work of improvement without a license. Existing law authorizes a person who is not licensed to advertise for construction work or work of improvement if the aggregate contract price for labor, material, and all other items on a project or undertaking is under $500 and the person states in the advertisement that the person is not licensed.

This bill would expand the advertising authorization by increasing the aggregate contract price to $1,000.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law makes it a misdemeanor for a person to act as a contractor without a license, unless exempted. Existing law exempts from the licensing requirement Contractors State License Law a work or operation on one undertaking or project by one or more contracts, if the aggregate contract price for labor, material, and all other items is under $500, except as specified.

This bill would revise the licensing exemption by increasing the maximum aggregate contract price to $1,000, as adjusted for inflation by the board, as specified, $1,000 and specifying that the exemption would apply if the work or operation meets specified requirements, including, among other things, that the work or operation does not include certain trades or crafts. does not require a building permit. The bill would additionally specify that the exemption would not apply to a person who employs another person to perform, or assist in performing, the work or operation. By narrowing the licensing exemption, exemption from the licensing requirement, the bill would expand a crime and, thereby, impose a state-mandated local program.

Existing law makes it a misdemeanor for a person to advertise for construction work or work of improvement without a license. Existing law authorizes a person who is not licensed to advertise for construction work or work of improvement if the aggregate contract price for labor, material, and all other items on a project or undertaking is under $500 and the person states in the advertisement that the person is not licensed.

This bill would expand the advertising authorization by increasing the aggregate contract price to $1000, as adjusted for inflation by the board, as specified. $1,000.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law makes it a misdemeanor for a person to act as a contractor without a license, unless exempted. Existing law also makes it a misdemeanor for a person to advertise for construction work or work of improvement without a license. Existing law exempts from the licensing requirement a work or operation on one undertaking or project by one or more contracts, if the aggregate contract price for labor, material, and all other items is under $500, except as specified. Existing law also authorizes a person who is not licensed to advertise for construction work or work of improvement if the aggregate contract price for labor, material, and all other items on a project or undertaking is under $500 and the person states in the advertisement that the person is not licensed.

This bill would expand revise the licensing exemption and the advertisement authorization by increasing the maximum aggregate contract price to $5,000 and would make other nonsubstantive changes. $1,000, as adjusted for inflation by the board, as specified, if the work or operation meets specified requirements, including, among other things, that the work or operation does not include certain trades or crafts. The bill would additionally specify that the exemption would not apply to a person who employs another person to perform, or assist in performing, the work or operation. By narrowing the licensing exemption, the bill would expand a crime and, thereby, impose a state-mandated local program.

Existing law, the Contractors State License Law, establishes the Contractors State License Board within the Department of Consumer Affairs and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law makes it a misdemeanor for a person to act as a contractor without a license, unless exempted. Existing law also makes it a misdemeanor for a person to advertise for construction work or work of improvement without a license. Existing law exempts from the licensing requirement a work or operation on one undertaking or project by one or more contracts, if the aggregate contract price for labor, material, and all other items is under $500, except as specified. Existing law also authorizes a person who is not licensed to advertise for construction work or work of improvement if the aggregate contract price for labor, material, and all other items on a project or undertaking is under $500 and the person states in the advertisement that the person is not licensed.

This bill would expand the licensing exemption and the advertisement authorization by increasing the maximum aggregate contract price to $5,000 and would make other nonsubstantive changes.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2622

Author:(Juan Carrillo)

As Amended Ver:June 27, 2024

Majority vote

SUMMARY

Authorizes a person who does not have a contractor's license to both advertise for and perform construction work or a work of improvement if the total cost of labor, materials, and all other items, is less than $1,000, if specified conditions are met.

Senate Amendments

1. Remove the requirement that the Contractors State License Board (CSLB) adjust the exemption threshold to reflect the rate of inflation.
2. Delete specified limitations on the types of work that an unlicensed contractor may perform.

COMMENTS

The CSLB is responsible for the implementation and enforcement of the License Law, which governs the licensure, practice, and discipline of the construction industry in California. The CSLB issues licenses to business entities and sole proprietors. Each license requires a qualifying individual (a "qualifier") who directly supervises and controls construction work performed under the license. The qualifying individual must be at least 18 years old, have at least four years of specified work experience, undergo a criminal background check, and pass both a law and business exam as well as a trade-specific exam. Additionally, licensed contractors are required to maintain a contractor's bond and workers' compensation insurance, and pay various fees.

The CSLB currently issues four license types: "A"' General Engineering Contractor license; "B" General Building Contractor license; "B-2" Residential Remodeling Contractor license; and "C" Specialty Contractor licenses of which there are 42 classifications. Each licensing classification (e.g. electrical, drywall, painting, plumbing, roofing, and fencing) specifies the type of contracting work permitted in that classification. Specific license holders are also eligible for Asbestos or Hazardous Substance Removal certifications issued by the CSLB.

Any business or individual who constructs or alters, or offers to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost of labor, materials, and all other items of one or more contracts on the project is $500 or more. If less than $500, the work is considered "casual, minor or inconsequential," and a license is not required. Known as the "minor work exemption," this exemption does not apply in any case where the construction work is only a part of a larger project, as specified. Nor does the exemption apply to an individual who advertises that they are a licensed contractor.

Contracting for work valued at $500 or more without a license is a misdemeanor, punishable by up to six months in jail and/or up to a $5,000 fine. Moreover, contracting without a license when one is required in a state or federally-declared disaster area can result in felony charges. The CSLB may issue a citation to an unlicensed individual who violates the License Law, but otherwise has very limited enforcement capability.

The threshold for contracting work without a license was last updated in 1998, when SB 2217 (O'Connell), Chapter 633, Statutes of 1998, increased the dollar amount for the exemption from $300 to $500. Until 2004, there was also a statutory requirement that an individual performing work under the $500 exemption threshold notify the consumer that the individual was not a licensed contractor. That requirement was removed in 2004 by SB 1914 (Senate Business and Professions Committee), Chapter 865, Statutes of 2004, because the CSLB has no jurisdiction over unlicensed individuals performing work under the exemption.

Since 1998, the purchasing power of $500 has drastically decreased; $500 in 1998 has the same buying power as $973.21 today. As such, handypersons may be priced out of work that they were once legally allowed to perform. This bill would increase the minor work exemption from $500 to $1,000. According to the author's office, this change provides a pathway for low-income individuals to build wealth.

According to the Author

According to the author:

In 1998 the legislature saw fit to raise the limit for non-licensed professionals to do handyman work from $300 to $500. In the quarter-century since then a lot has changed, but the cap for handypersons has remained stuck at $500 for labor and materials. The skyrocketing costs of materials since the pandemic has created a market in which even a simple ceiling fan installation can cost $500 and up. Additionally, current market conditions have caused most licensed contractors to turn down smaller jobs, making it difficult or impossible for homeowners with relatively minor projects to find a contractor willing to take the job. The result of this dynamic is a flourishing black-market where consumers and handypersons are forced to operate outside of the law. This means that there is little recourse or responsibility for the consumer and for the handyperson if something goes wrong. [This bill] is a long over-due update to the exemption that would allow professionals to do handyman work thereby bringing these jobs and consumer transactions back into the legal light.

Arguments in Support

The CSLB writes in support:

Existing law provides that a contractor's license is not required for work for which the price for labor, material, and all other items is under $500. This bill increases that amount to $1,000. Despite increasing the exemption amount, the bill preserves public protection by restricting the exemption to specified minor work and activities. [...] Finally, the exemption would not apply if a worker is hired. The $500 exemption amount has not been increased since 1998. CSLB generally believes increasing the threshold to $1,000 will increase the number of handypersons available for consumers on small projects. It is an opportunity to legalize a portion of a marketplace that is currently performing minor work without consumer harm, which could lead to more licensees when four years' experience is obtained.

Arguments in Opposition

The California Landscape Contractors Association (CLCA) writes in opposition:

Existing law exempts from licensing requirements any work or operation on one undertaking or project, by one or more contracts, when the aggregate contract price does not exceed $500, except when the person performing the work advertises to the public that they are a licensed contractor. AB 2622 would increase the maximum aggregate contract price eligible for this exemption to $1,000. It would cherry pick certain trades and exempt them in a way that is unfair to other contractors. Why them? Why this exemption? CLCA believes consumers should be afforded maximum protection against subpar contractors who are not licensed by the state. Greatly expanding the current threshold from $500 to $1,000 for requiring a contractor to be licensed may result in more projects being taken on by poorly trained contractors, and additional unsatisfactory work outcomes for some consumers who then would have little or no recourse to file a complaint.

FISCAL COMMENTS

According the Senate Appropriations Committee, the CSLB reports:

1. Costs of approximately $405,000 in the first year and $389,000 ongoing to address an increase in investigative staff workload (Contractors License Fund).
2. Ongoing annual revenue loss between $215,000 and $270,000.

VOTES:

ASM BUSINESS AND PROFESSIONS: 16-0-2

YES: Berman, Flora, Alanis, Juan Carrillo, Chen, Dixon, Aguiar-Curry, Irwin, Jackson, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Sanchez, Soria, Zbur

ABS, ABST OR NV: Bains, Low

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 57-0-23

YES: Aguiar-Curry, Alanis, Alvarez, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Dixon, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Low, Lowenthal, McCarty, McKinnor, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Villapudua, Waldron, Wallis, Ward, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Addis, Bains, Calderon, Cervantes, Connolly, Megan Dahle, Davies, Essayli, Friedman, Gabriel, Holden, Lackey, Lee, Maienschein, Mathis, Muratsuchi, Ortega, Jim Patterson, Rendon, Luz Rivas, Ting, Valencia, Weber

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

UPDATED

VERSION: June 27, 2024

CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0004318

 THIRD READING  

Bill No: AB 2622

Author: Juan Carrillo (D)

Amended: 6/27/24 in Senate

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 12-0, 7/1/24

AYES: Ashby, Nguyen, Alvarado-Gil, Archuleta, Becker, Dodd, Eggman, Glazer, Menjivar, Niello, Roth, Wilk

NO VOTE RECORDED: Smallwood-Cuevas

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 57-0, 5/22/24 - See last page for vote

SUBJECT: Contractors: exemptions: work and advertisements

SOURCE: Author

DIGEST:

This bill increases the value of a construction project that triggers required licensure by the Contractors State License Board (CSLB) from $500 to $1,000 for labor and materials. This bill also specifies that projects for which the threshold is $1,000 do not require a permit to undertake and to be completed without employees.

ANALYSIS:

Existing law

1. Establishes the Contractors State License Board (CSLB) within the Department of Consumer Affairs (DCA) to license and regulate contractors and home improvement salespersons. (Business and Professions Code (BPC) § 7000 et seq.)
2. Defines a contractor as synonymous with “builder” and as “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, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the 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 underground storage tanks, and whether or not the performance of work herein described involves the addition to, or fabrication into, any structure, project, development or improvement herein described of any material or article of merchandise.” (BPC § 7026)
   
3. Defines “person,” as used in the Contractors State License Law (Licensure Law), to include an individual, a firm, partnership, corporation, limited liability company, association or other organization, or any combination thereof. (BPC § 7025(b))
4. Requires any person who advertises or puts out any sign, card, or device that would indicate to the public that he or she is a contractor, or who causes his or her name or business name to be included in a classified advertisement or directory under a classification for construction or work of improvement covered under the License Law be subject to the license law regardless of whether his or her operations as a builder are exempt. (BPC § 7027)
5. Permits a person who is not licensed under the License Law to advertise for construction work or a work improvement covered under the License Law, only if the aggregate contract price for labor, material, and all other items on the project or undertaking is less than $500 and the individual states in the advertisement that the individual is not licensed, as specified (BPC § 7027.2)
6. States that any person licensed or unlicensed, who willfully and intentionally uses with intent to defraud a contractor’s license number that does not correspond to the number on the contractor’s license held by that person is punishable by a fine not exceeding $10,000 or by imprisonment, or both, as specified. (BPC § 7027.3)
7. States that it is a misdemeanor for any contractor, whether licensed or unlicensed to perform or engage in asbestos related work, as specified, without certification. (BPC § 7028.1)
8. Prohibits a B-2 (Residential Remodeling) contractor from contracting for a project that includes the following trades or crafts unless the contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor: (BPC § 7057.5(c)(1))
   • 1. C-16 Fire Protection;
     2. C-22 Asbestos Abatement; and
     3. C-57 Well Drilling
9. Prohibits a B-2 (Residential Remodeling) contractor from making structural changes to load bearing portions of an existing structure, including, but not limited to, footings, foundations, load bearing walls, partitions, and roof structures. (BPC § 7057.5(c)(2))
   
10. Prohibits a B-2 (Residential Remodeling) contractor from installing, replacing, substantially altering, or extending electrical, mechanical, or plumbing systems or their component parts, or the mechanisms or devices that are part of those systems, unless the residential remodeling contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor. (BPC § 7057.5(c)(3)(A))
11. Authorizes a B-2 (Residential Remodeling) contractor to contract to make minor alterations to existing electrical, mechanical, or plumbing systems to effectuate the purpose of installing, repairing, or replacing electrical, mechanical and plumbing fixtures, provided that the contract requires the use of at least three unrelated building trades or crafts. (BPC § 7057.5(c)(3)(B))
12. Empowers the Registrar of Contractors 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 without having a license in good standing. (BPC 7028.6)
13. States that a person who engages in the business of, or acts in the capacity of a contractor, without having a license in connection with the offer or performance of repairs to a residential or non-residential structure, for damage caused by a natural disaster, for which a state of emergency is proclaimed by the Governor, or a major disaster declared by the president of the United States is punishable by a fine up to $10,000 or by imprisonment. (BPC § 7028.16)
14. States that the License Law does not apply, if the aggregate contract price for labor, materials, and all other items, is less than $500 and the work or operations being performed is considered casual, minor, or inconsequential nature. (BPC § 7048)
15. States that the exemption in 13) above does not apply in any case wherein the work of construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than $500, as specified, and the 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 that he or she is a contractor or that he or she is qualified to engage in the business of a contractor. (BPC § 7048)
16. Includes the following classification of contracting businesses: General engineering contracting, General building contracting, and Specialty contracting, as defined. (BPC §§ 7055, 7056)
17. Authorizes the registrar upon his or her own motion, and requires upon the verification of a complaint in writing or any person, investigate the action of any contractor, applicant or home improvement salesperson, as specified, if found guilty of or commits any one or more of the acts or omissions constituting causes for disciplinary action. (BPC § 7090)
18. Specifies the projects for which a home improvement contract is required, outlines the contract requirements, and limits the items that are included in the contract, or may be provided as an attachment, as specified. (BPC 7159)
19. Defines a “home improvement contract” to mean an agreement, whether oral or written, or contained in one or more documents between a contractor and an owner or tenant, regardless of the number of dwellings,

This bill increases the value of construction work (labor plus materials) from $500 to $1,000 before a contractor’s license is required to perform the work, when the following criteria are met: 1) the construction project valued does not require a building permit or employ another person to perform, or assist in performing, the work or operation.

Background

Current law requires all businesses and individuals who construct or alter, or offer to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California to be licensed by the CSLB if the total cost, including both labor and materials, of one or more contracts on the project is $500 or more. BPC § 7408 states a person is exempt from licensure requirements or provisions of the License Law, if the work or operation of a project, either by one or more contracts, the aggregate contract price for labor, materials, and all other items is less than $500 and the work is considered “casual, minor or inconsequential.” The exemption does not apply in any case where the construction work is only a part of a larger or major operation, as specified. The exemption does not apply to a person who advertises, by any means, that he or she is a licensed contractor. This bill will raise the threshold of construction work, which can be provided without being subject to the licensure requirements or provisions of the License Law from $500 to $1,000. The work must still be considered “casual, minor or inconsequential.”

The last time there was a change in the threshold for contracting work without a license was in 1998, when SB 2217 (O’Connell, Chapter 633, Statutes of 1998) increased the dollar amount for the exemption from $300 to $500. However, up until 2004, there was also a statutory requirement that an individual performing work under the $500 exemption threshold notify the consumer that he or she was not a licensee under the CSLB. That requirement was removed in 2004 by SB 1914 (Committee on Business and Professions, Chapter 865, Statutes of 2004) out of concern that CSLB lacks jurisdiction over unlicensed contractors performing work under the exemption.

CSLB Enforcement. Enforcement begins when the complaint is filed. DCA and its programs are required to take and process every complaint received. Complaints can be received from a variety of sources including, but not limited to, consumers, homeowners, other contractors, subcontractors and employees or other public agencies. CSLB is specifically required by

According the CSLB’s 2023 Sunset Report, they have recently been experiencing record numbers of complaints and in the past three fiscal years, received 53,908 complaints. Consumer complaints (41,822) comprised 78% of all complaints received during this time. According to CSLB, 996 (or 332 annually) consumer complaints were for projects valued between $500 and $1,000. Additionally, 7,328 complaints did not indicate a contract value.

While a small percentage of overall consumer complaints, those complaints between $500 and $1,000 would create a significant enforcement challenge to CSLB’s Enforcement Division. Currently, if a project value is below $500, the complaint is non-jurisdictional and is automatically a civil matter to be handled in small claims court or if the contractor was a licensee, through filing a claim against the contractor bond. This bill would create a scenario where if the value of the contract is between $500 and $1,000, CSLB jurisdiction would not be clear. An investigation into the specifics of the contract to determine whether a permit is necessary and whether the contractor had employees would need to be established before the CSLB’s jurisdiction could be established. This process could impact overall processing times by creating work and delays that ultimately lead to a non-jurisdictional determination and referring the consumer to civil remedies.

Consumer protection remedies provided by CSLB – restitution and correction orders. When a consumer complaint is received and falls within CSLB’s jurisdiction, the CSLB has various methods of recourse intended to protect consumers, including: 1) a referral to prosecutors for misdemeanor violations of the License Law, 2) disciplinary action against a license with probationary conditions containing an order of restitution and/or an order of correction; a citation that may include a fine, an order of restitution, a correction order, or a combination thereof; and a letter of admonishment.

This bill would remove the possibility of the order of restitution which is the method that most immediately and directly impacts consumers, for projects between $500 and $1,000 because qualifying contracts would not fall within CSLB’s jurisdiction. Additionally, when a license is not required, a population that this bill would increase, the possibility of disciplinary action is removed, further impacting CSLB’s ability to order restitution.

This bill would also remove the possibility of a correction order for qualifying contracts valued between $500 and $1,000 that are not performed up to industry standard. On jurisdictional complaints, CSLB may also negotiate a settlement agreement that includes an agreed to correction or payment by the contractor to pay for correction, options that would no longer be available to consumers of the qualifying contracts.

The “B” License versus a “B-2” license. A “B” (General Building Contracting) contractor is 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. Framing and carpentry are integral to building a structure and knowledge of these areas are required for a “B” contractor. A “B” licensee may also work on projects requiring in its construction the use of at least two unrelated building trades or crafts and may subcontract for that work, but cannot subcontract for framing or carpentry unless the contract includes two other trades.

To create a pathway to licensure for those considered handymen, SB 1189 (McGuire, Chapter 364, Statutes of 2020) created the “B-2” (Residential Remodeling) license type, which allows contractors who have experience in multiple areas that does not include carpentry (thereby disqualifying them from a “B” license), to obtain a contractor’s license. CSLB began accepting B-2 applications effective January 1, 2021, and as of December 2023, there were 627 licenses. The “B-2” license was intended to provide a pathway to licensure to a person who is considered a handyman. The license population is quickly growing, having increased by 250 percent in calendar year 2023 from 252 to 627.

To ensure a “B-2” contractor does not contract for work that requires a “B” license, SB 1189 included an inclusive list (although not exhaustive) of activities in which a “B-2” licensee may engage. These include many trades that, depending on the job, could be completed for under $1,000, such as drywall, finish carpentry, painting, roof repair, installing, repairing or replacing electrical, plumbing, and mechanical fixtures. It remains unclear how raising the threshold for licensure would decrease unlicensed activity as stated by the Author. However, the Assembly Appropriations analysis states, “, the CSLB anticipates a revenue loss that is unquantifiable as a result of the increase in the threshold.” This can be attributed to a likely decrease in its license population, particularly in the new and growing “B-2” license population.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Committee on Appropriations, CSLB reports costs of approximately $405,000 in the first year and $389,000 ongoing to address an increase in investigative staff workload. Additionally, CSLB anticipates ongoing annual revenue loss between $215,000 and $270,000.

SUPPORT: (Verified 8/15/24)

None received

OPPOSITION: (Verified 8/15/24)

None received

ASSEMBLY FLOOR: 57-0, 5/22/24

AYES: Aguiar-Curry, Alanis, Alvarez, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Dixon, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Low, Lowenthal, McCarty, McKinnor, Stephanie Nguyen, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Villapudua, Waldron, Wallis, Ward, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Addis, Bains, Calderon, Cervantes, Connolly, Megan Dahle, Davies, Essayli, Friedman, Gabriel, Holden, Lackey, Lee, Maienschein, Mathis, Muratsuchi, Ortega, Jim Patterson, Rendon, Luz Rivas, Ting, Valencia, Weber

Prepared by: Yeaphana La Marr / B., P. & E.D. /

8/18/24 9:19:22

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2622 (Juan Carrillo) - Contractors: exemptions: work and advertisements

Bill Summary:

AB 2622 increases the maximum value of a construction project exempted under the Contractors State License Law, from $500 to $1,000.

Fiscal Impact:

The Contractors State License Board (CSLB) reports:

• Costs of approximately $405,000 in the first year and $389,000 ongoing to address an increase in investigative staff workload (Contractors License Fund).
• Ongoing annual revenue loss between $215,000 and $270,000.

Background:

Current law requires all businesses and individuals who construct or alter, or offer to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California to be licensed by the CSLB if the total cost, including both labor and materials, of one or more contracts on the project is $500 or more. A person is exempt from these licensure requirements if the work or operation of a project, either by one or more contracts, the aggregate contract price for labor, materials, and all other items is less than $500 and the work is considered “casual, minor, or inconsequential.” The “minor work exemption” does not apply in any case where the construction work is only a part of a larger or major operation, as specified. The minor work exemption also does not apply to a person who advertises, by any means, that he or she is a licensed contractor.

Proposed Law:

• Increases, from $500 to $1,000, the maximum aggregate value of construction work, including labor and materials, before a contractor’s license is required to perform the work.
  • Specifies that the $1,000 minor work exemption only applies if the work or operation does not require a building permit.
• Provides that the $1,000 minor work exemption threshold does not apply to a person who:
  • Advertises or puts out a sign or card or other device indicating to the public that the person is a contractor and is qualified to engage in the business of a contractor.
  • Employs another person to perform, or assist in performing, the work or operation.
• Makes other technical and conforming changes.

Staff Comments:

The boards and bureaus within the Department of Consumer Affairs are special fund agencies whose activities are funded by regulatory and license fees and generally receive no support from the General Fund. New legislative mandates, even those modest in scope, may in totality create new cost pressures and impact the entity’s operating costs, future budget requests, or license fees.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Angelique Ashby, Chair

2023 - 2024 Regular

Bill No: Hearing Date: July 1, 2024

Subject:

SUMMARY:

Increases the value of a construction project that triggers required licensure by the Contractors State License Board (CSLB) from $500 to $1,000 for labor and materials. Specifies that projects for which the threshold is $1,000 do not require a permit to undertake and to be completed without employees.

Existing law:

1. Establishes the Contractors State License Board (CSLB) within the Department of Consumer Affairs (DCA) to license and regulate contractors and home improvement salespersons. (Business and Professions Code (BPC) § 7000 et seq.)
2. Defines a contractor as synonymous with “builder” and as “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, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the 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 underground storage tanks, and whether or not the performance of work herein described involves the addition to, or fabrication into, any structure, project, development or improvement herein described of any material or article of merchandise.” (BPC § 7026)
   
3. Defines “person,” as used in the Contractors State License Law (Licensure Law), to include an individual, a firm, partnership, corporation, limited liability company, association or other organization, or any combination thereof. (BPC § 7025(b))
4. Requires any person who advertises or puts out any sign, card, or device that would indicate to the public that he or she is a contractor, or who causes his or her name or business name to be included in a classified advertisement or directory under a classification for construction or work of improvement covered under the License Law be subject to the license law regardless of whether his or her operations as a builder are exempt. (BPC § 7027)
5. Permits a person who is not licensed under the License Law to advertise for construction work or a work improvement covered under the License Law, only if the aggregate contract price for labor, material, and all other items on the project or undertaking is less than $500 and the individual states in the advertisement that the individual is not licensed, as specified (BPC § 7027.2)
6. States that any person licensed or unlicensed, who willfully and intentionally uses with intent to defraud a contractor’s license number that does not correspond to the number on the contractor’s license held by that person is punishable by a fine not exceeding $10,000 or by imprisonment, or both, as specified. (BPC § 7027.3)
7. States that it is a misdemeanor for any contractor, whether licensed or unlicensed to perform or engage in asbestos related work, as specified, without certification. (BPC § 7028.1)
8. Prohibits a B-2 (Residential Remodeling) contractor from contracting for a project that includes the following trades or crafts unless the contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor:
   • 1. C-16 Fire Protection;
     2. C-22 Asbestos Abatement; and
     3. C-57 Well Drilling

(BPC § 7057.5(c)(1))

1. Prohibits a B-2 (Residential Remodeling) contractor from making structural changes to load bearing portions of an existing structure, including, but not limited to, footings, foundations, load bearing walls, partitions, and roof structures. (BPC § 7057.5(c)(2))
   
2. Prohibits a B-2 (Residential Remodeling) contractor from installing, replacing, substantially altering, or extending electrical, mechanical, or plumbing systems or their component parts, or the mechanisms or devices that are part of those systems, unless the residential remodeling contractor holds the appropriate license classification or subcontracts with an appropriately licensed contractor. (BPC § 7057.5(c)(3)(A))
3. Authorizes a B-2 (Residential Remodeling) contractor to contract to make minor alterations to existing electrical, mechanical, or plumbing systems to effectuate the purpose of installing, repairing, or replacing electrical, mechanical and plumbing fixtures, provided that the contract requires the use of at least three unrelated building trades or crafts. (BPC § 7057.5(c)(3)(B))
4. Empowers the Registrar of Contractors 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 without having a license in good standing. (BPC 7028.6)
5. States that a person who engages in the business of, or acts in the capacity of a contractor, without having a license in connection with the offer or performance of repairs to a residential or non-residential structure, for damage caused by a natural disaster, for which a state of emergency is proclaimed by the Governor, or a major disaster declared by the president of the United States is punishable by a fine up to $10,000 or by imprisonment. (BPC § 7028.16)
6. States that the License Law does not apply, if the aggregate contract price for labor, materials, and all other items, is less than $500 and the work or operations being performed is considered casual, minor, or inconsequential nature. (BPC § 7048)
7. States that the exemption in 13) above does not apply in any case wherein the work of construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than $500, as specified, and the 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 that he or she is a contractor or that he or she is qualified to engage in the business of a contractor. (BPC § 7048)
8. Includes the following classification of contracting businesses: General engineering contracting, General building contracting, and Specialty contracting, as defined. (BPC §§ 7055, 7056)
9. Authorizes the registrar upon his or her own motion, and requires upon the verification of a complaint in writing or any person, investigate the action of any contractor, applicant or home improvement salesperson, as specified, if found guilty of or commits any one or more of the acts or omissions constituting causes for disciplinary action. (BPC § 7090)
10. Specifies the projects for which a home improvement contract is required, outlines the contract requirements, and limits the items that are included in the contract, or may be provided as an attachment, as specified. (BPC 7159)
11. Defines a “home improvement contract” to mean an agreement, whether oral or written, or contained in one or more documents between a contractor and an owner or tenant, regardless of the number of dwellings,

This bill:

1. Increases the value of construction work (labor plus materials) from $500 to $1,000 before a contractor’s license is required to perform the work, when the criteria in 2) and 3) below are met.
   
2. Requires that a construction project valued below the $1,000 threshold does not require a building permit.
   
3. States the $1,000 threshold does not apply to a person who does either of the following:
   1. Advertises or puts out a sign or card or other device that might indicate to the public that the person is a contractor or that the person is qualified to engage in the business of a contractor, or
      
   2. Employs another person to perform, or assist in performing, the work or operation.

FISCAL EFFECT:

This bill is keyed fiscal by Legislative Counsel. According to the Assembly Committee on Appropriations, CSLB anticipates a revenue loss that is unquantifiable as a result of the increase in the threshold.

COMMENTS:

1. Purpose. This bill is sponsored by the Author. The Author states, “In 1998 the legislature saw fit to raise the limit for non-licensed professionals to do handyman work from $300 to $500. In the quarter-century since then a lot has changed, but the cap for handypersons has remained stuck at $500 for labor and materials. The skyrocketing costs of materials since the pandemic has created a market in which even a simple ceiling fan installation can cost $500 and up. Additionally, current market conditions have caused most licensed contractors to turn down smaller jobs, making it difficult or impossible for homeowners with relatively minor projects to find a contractor willing to take the job. The result of this dynamic is a flourishing black-market where consumers and handypersons are forced to operate outside of the law. This means that there is little recourse or responsibility for the consumer and for the handyperson if something goes wrong. [This bill] is a long over-due update to the exemption that would allow professionals to do handyman work thereby bringing these jobs and consumer transactions back into the legal light.”
2. Background.
   

Contractors and the CSLB. The CSLB is responsible for implementing and enforcing the Contractors’ State License Law (License Law), and regulations related to the licensure, practice and discipline of the construction industry in California. The CSLB licenses and regulates approximately 285,000 licensees in 44 licensing classifications, issues two certifications, and registers approximately 18,000 Home Improvement Salespersons. CSLB regulations, Title 16 of the California Code of Regulations (16 CCR) §§ 832.02–832.62, specify the work that each classification may lawfully engage in under that classification.

Current law requires all businesses and individuals who construct or alter, or offer to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California to be licensed by the CSLB if the total cost, including both labor and materials, of one or more contracts on the project is $500 or more. BPC § 7408 states a person is exempt from licensure requirements or provisions of the License Law, if the work or operation of a project, either by one or more contracts, the aggregate contract price for labor, materials, and all other items is less than $500 and the work is considered “casual, minor or inconsequential.” The exemption does not apply in any case where the construction work is only a part of a larger or major operation, as specified. The exemption does not apply to a person who advertises, by any means, that he or she is a licensed contractor. This bill will raise the threshold of construction work, which can be provided without being subject to the licensure requirements or provisions of the License Law from $500 to $1,000. The work must still be considered “casual, minor or inconsequential.”

The last time there was a change in the threshold for contracting work without a license was in 1998, when SB 2217 (O’Connell, Chapter 633, Statutes of 1998) increased the dollar amount for the exemption from $300 to $500. However, up until 2004, there was also a statutory requirement that an individual performing work under the $500 exemption threshold notify the consumer that he or she was not a licensee under the CSLB. That requirement was removed in 2004 by SB 1914 (Committee on Business and Profession, Chapter 865, Statutes of 2004) out of concern that CSLB lacks jurisdiction over unlicensed contractors performing work under the exemption.

CSLB Enforcement. Enforcement begins when the complaint is filed. DCA and its programs are required to take and process every complaint received. Complaints can be received from a variety of sources including, but not limited to, consumers, homeowners, other contractors, subcontractors and employees or other public agencies. CSLB is specifically required by

According the CSLB’s 2023 Sunset Report, they have recently been experiencing record numbers of complaints and in the past three fiscal years, received 53,908 complaints. Consumer complaints (41,822) comprised 78% of all complaints received during this time. According to CSLB, 996 (or 332 annually) consumer complaints were for projects valued between $500 and $1,000. Additionally, 7,328 complaints did not indicate a contract value.

While a small percentage of overall consumer complaints, those complaints between $500 and $1,000 would create a significant enforcement challenge to CSLB’s Enforcement Division. Currently, if a project value is below $500, the complaint is non-jurisdictional and is automatically a civil matter to be handled in small claims court or if the contractor was a licensee, through filing a claim against the contractor bond. This bill would create a scenario where if the value of the contract is between $500 and $1,000, CSLB jurisdiction would not be clear. An investigation into the specifics of the contract to determine whether a permit is necessary and whether the contractor had employees would need to be established before the CSLB’s jurisdiction could be established. This process could impact overall processing times by creating work and delays that ultimately lead to a non-jurisdictional determination and referring the consumer to civil remedies.

Consumer protection remedies provided by CSLB – restitution and correction orders. When a consumer complaint is received and falls within CSLB’s jurisdiction, the CSLB has various methods of recourse intended to protect consumers, including: 1) a referral to prosecutors for misdemeanor violations of the License Law, 2) disciplinary action against a license with probationary conditions containing an order of restitution and/or an order of correction; a citation that may include a fine, an order of restitution, a correction order, or a combination thereof; and a letter of admonishment.

This bill would remove the possibility of the order of restitution which is the method that most immediately and directly impacts consumers, for projects between $500 and $1,000 because qualifying contracts would not fall within CSLB’s jurisdiction. Additionally, when a license is not required, a population that this bill would increase, the possibility of disciplinary action is removed, further impacting CSLB’s ability to order restitution.

This bill would also remove the possibility of a correction order for qualifying contracts valued between $500 and $1,000 that are not performed up to industry standard. On jurisdictional complaints, CSLB may also negotiate a settlement agreement that includes an agreed to correction or payment by the contractor to pay for correction, options that would no longer be available to consumers of the qualifying contracts.

The “B” License versus a “B-2” license. A “B” (General Building Contracting) contractor is 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. Framing and carpentry are integral to building a structure and knowledge of these areas are required for a “B” contractor. A “B” licensee may also work on projects requiring in its construction the use of at least two unrelated building trades or crafts and may subcontract for that work, but cannot subcontract for framing or carpentry unless the contract includes two other trades.

To create a pathway to licensure for those considered handymen, SB 1189 (Chapter 264, Statutes of 2020) created the “B-2” (Residential Remodeling) license type, which allows contractors who have experience in multiple areas that does not include carpentry (thereby disqualifying them from a “B” license), to obtain a contractor’s license. CSLB began accepting B-2 applications effective January 1, 2021, and as of December 2023, there were 627 licenses. The “B-2” license was intended to provide a pathway to licensure to a person who is considered a handyman. The license population is quickly growing, having increased by 250 percent in calendar year 2023 from 252 to 627.

To ensure a “B-2” contractor does not contract for work that requires a “B” license, SB 1189 included an inclusive list (although not exhaustive) of activities in which a “B-2” licensee may engage. These include many trades that, depending on the job, could be completed for under $1,000, such as drywall, finish carpentry, painting, roof repair, installing, repairing or replacing electrical, plumbing, and mechanical fixtures. It remains unclear how raising the threshold for licensure would decrease unlicensed activity as stated by the Author. However, the Assembly Appropriations analysis states, “, the CSLB anticipates a revenue loss that is unquantifiable as a result of the increase in the threshold.” This can be attributed to a likely decrease in its license population, particularly in the new and growing “B-2” license population.

Home Improvement Contracts and Service and Repair Contracts. There are two types of different contracts used when completing projects relating to home improvements under the License Law: The Home Improvement Contract and the Service and Repair Contract.

Home improvement contracts are required for all home improvement projects over $500 in combined labor and materials costs between a contractor and an owner or between a contractor and a tenant, if the work is to be performed in, to, or upon the residence or dwelling unit of the tenant and includes all labor, services, and materials to be furnished.

Service repair contracts may be used when all four of the following conditions apply:

1. The contract amount is $750 or less;
2. The buyer initiated contact with the contractor to request the work;
3. The contractor does not sell the buyer goods or services beyond those reasonably necessary to take care of the particular problem that caused the buyer to contact the contractor; and
4. Payment is not due until the work is completed (BPC § 7159 specifies the conditions and requirements of a home improvement contract including the buyers right to cancel policy as specified in Civil Code §§ 1689.5 and 1689.14).

The service and repair contract is another way that a handyman could work on a project (in addition to the “B-2” license), but the service and repair contract does not require licensure until the value of the project is $750. Another primary difference between the two types of contracts resides in the cancelation provisions. When a contract falls within the service and repair parameters, then the right to cancel ends when contractor provides a fully signed contract complying with the law and starts work. The home improvement contract provides a three-day cancellation window (or five days for senior citizens) regardless of whether or not the contractor began work.

1. Related Legislation. SB 1189 (McGuire, Chapter 364, Statutes of 2020) created a B-2 Residential Remodeling Contractor license as a new classification of contracting business, defined the scope of a B-2 license and activities outside the scope of a B-2 license, and revised the definition of home improvement.
   

SB 304 (Archuleta of 2021) would have increased the amount of authorized work, which exempts an individual from licensure requirements under the Contractors State License Law (License Law), from $500 to $1000. This bill died in the Senate Business and Professions Committee.

AB 899 (Cunningham of 2021) would have required the CSLB to annually adjust the $500 value of a construction contract that is not subject to regulation under the License Law, so long as the nature of the work performed is considered casual, minor, or inconsequential, to reflect the rate of inflation by CPI. This bill died in the Assembly Committee on Business and Professions.

AB 1874 (Smith of 2022) would have authorized a person who is not licensed as a contractor to advertise for construction work or a work of improvement if the total cost of labor is less than $500 and the person states in the advertisement that they are not a licensed contractor. This bill died in Assembly Committee on Business and Professions.

AB 2217 (O’Connell, Chapter 633, Statutes of 1998) increased from $300 to $500 the value of a construction contract that is not subject to regulation by the CSLB, so long as the nature of the work performed is "casual, minor, or inconsequential."

1. Comments.

Prior to the June 27, 2024 amendments, the CSLB issued a letter of support stating, “Despite increasing the exemption amount, the bill preserves public protection by restricting the exemption to specified minor work and activities. The exemption would not apply to work that requires a building permit, or behind-the-wall mechanical, electrical, and plumbing, nor would it apply to structural work and other specified public safety-related trades. Finally, the exemption would not apply if a worker is hired.”

The CSLB’s support was stated to be based on the language that would have restricted unlicensed persons from behind-the-wall, mechanical, electrical, and plumbing work. This language is no longer contained in the bill and as such, CSLB may have additional enforcement challenges without the same specifications provided for the work that does not require a license.

SUPPORT AND OPPOSITION:

Support:

None received on the current version of the bill

Opposition:

None received on the current version of the bill

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2622

Author:(Juan Carrillo)

As Amended Ver:April 24, 2024

Majority vote

SUMMARY

Authorizes a person who does not have a contractor's license to both advertise for and perform construction work or a work of improvement if the total cost of labor, materials, and all other items, is less than $1,000.

Major Provisions

1. Specifies that this exemption does not apply in any of the following circumstances:
   1. The unlicensed person employs another person to perform, or assist in performing, the work or operation.
   2. The work or operation requires a building permit.
   3. The work or operation includes fire protection, asbestos abatement, or well drilling.
   4. The work or operation requires any of the following:
      1. Making structural changes to load bearing portions of an existing structure, including, but not limited to, footings, foundations, load bearing walls, partitions, and roof structures.
      2. Installation, replacement, substantial alteration, or extension of electrical, mechanical, or plumbing systems or their component parts, or the mechanisms or devices that are part of those systems.
2. Requires the Contractors State License Board (CSLB) to, commencing on January 1, 2026, and annually thereafter, adjust the exemption amount to reflect the rate of inflation, as measured by the California Consumer Price Index as compiled and reported by the Department of Industrial Relations.

COMMENTS

The CSLB is responsible for the implementation and enforcement of the License Law, which governs the licensure, practice, and discipline of the construction industry in California. The CSLB issues licenses to business entities and sole proprietors. Each license requires a qualifying individual (a "qualifier") who directly supervises and controls construction work performed under the license. The qualifying individual must be at least 18 years old, have at least four years of specified work experience, undergo a criminal background check, and pass both a law and business exam as well as a trade-specific exam. Additionally, licensed contractors are required to maintain a contractor's bond and workers' compensation insurance, and pay various fees.

The CSLB currently issues four license types: "A"' General Engineering Contractor license; "B" General Building Contractor license; "B-2" Residential Remodeling Contractor license; and "C" Specialty Contractor licenses of which there are 42 classifications. Each licensing classification (e.g. electrical, drywall, painting, plumbing, roofing, and fencing) specifies the type of contracting work permitted in that classification. Specific license holders are also eligible for Asbestos Abatement or Hazardous Substance Removal certifications issued by the CSLB.

Any business or individual who constructs or alters, or offers to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost of labor, materials, and all other items of one or more contracts on the project is $500 or more. If less than $500, the work is considered "casual, minor or inconsequential," and a license is not required. Known as the "minor work exemption," this exemption does not apply in any case where the construction work is only a part of a larger project, as specified. Nor does the exemption apply to an individual who advertises that they are a licensed contractor.

Contracting for work valued at $500 or more without a license is a misdemeanor, punishable by up to six months in jail and/or up to a $5,000 fine. Moreover, contracting without a license when one is required in a state or federally-declared disaster area can result in felony charges. The CSLB may issue a citation to an unlicensed individual who violates the License Law, but otherwise has very limited enforcement capability.

The threshold for contracting work without a license was last updated in 1998, when SB 2217 (O'Connell), Chapter 633, Statutes of 1998, increased the dollar amount for the exemption from $300 to $500. Since 1998, the purchasing power of $500 has drastically decreased; $500 in 1998 has the same buying power as $966.37 today. As such, handypersons may be priced out of work that they were once legally allowed to perform. This bill would increase the minor work exemption from $500 to $5,000. According to the author's office, this change provides a pathway for low-income individuals to build wealth.

According to the Author

"In 1998 the legislature saw fit to raise the limit for non-licensed professionals to do handyman work from $300 to $500. In the quarter-century since then a lot has changed, but the cap for handypersons has remained stuck at $500 for labor and materials. The skyrocketing costs of materials since the pandemic has created a market in which even a simple ceiling fan installation can cost $500 and up. Additionally, current market conditions have caused most licensed contractors to turn down smaller jobs, making it difficult or impossible for homeowners with relatively minor projects to find a contractor willing to take the job. The result of this dynamic is a flourishing black-market where consumers and handypersons are forced to operate outside of the law. This means that there is little recourse or responsibility for the consumer and for the handyperson if something goes wrong. [This bill] is a long over-due update to the exemption that would allow professionals to do handyman work thereby bringing these jobs and consumer transactions back into the legal light."

Arguments in Support

The Institute for Justice writes in support of this bill:

This bill would allow unlicensed contractors to take on more small-scale projects without the burden of licensing requirements. For many low-income workers and individuals from marginalized or underrepresented communities, obtaining a contractor's license can be a daunting and expensive process. To qualify for licensure, applicants must have documented in the previous 10 years at least four full years of relevant work experience and take an examination. An applicant must additionally purchase a $25,000 contractor's bond, which can cost some individuals over $2,000 a year to maintain. By significantly increasing the contract price threshold, [this bill] would offer a pathway for these unlicensed contractors to gain valuable experience, earn money, and establish themselves in the industry without the initial financial burden of licensure. Moreover, expanding the licensing exemption would provide consumers with more affordable options for essential home improvement, repair, and maintenance services. In a state where homeownership costs are skyrocketing, many Californians are struggling to afford basic upkeep and repairs for their homes. By allowing unlicensed contractors to take on smaller projects valued up to $5,000, homeowners will have greater access to affordable and reliable services, which would alleviate some of the financial burdens associated with homeownership.

Arguments in Opposition

The California Chapters of the National Electrical Contractors Association, California Legislative Conference of the Plumbing, Heating and Piping Industry, and the California Association of Sheet Metal and Air Conditioning Contractors collectively write in opposition:

This bill would undermine existing consumer protections by allowing unlicensed, unbonded, and uninsured contractors to perform work up to $5,000 in any home or business. Routine plumbing, electrical and HVAC services that require skills, training, special safety equipment and knowledge will now fall below this threshold. In these situations, the consumer is exposed to significant risk of property damage, fraud and economic harm from unlicensed contractors with little recourse for corrective action through the CSLB. Furthermore, the CSLB licensed contractors who have successfully demonstrated industry knowledge, have obtained bonds, and carry workers compensation insurance are also harmed by [this bill]. Under this bill, these licensed contractors would be forced to compete in the open marketplace on price with unlicensed contractors who don't share the same knowledge, investments in equipment or normal expenses related to bonds and workers compensation insurance to protect their customers.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, the CSLB estimates ongoing special fund costs of $186,000 annually for one staff position to assist with developing language and adoption of regulations on an annual basis based on the annual CPI as compiled and reported by DIR. This workload would require working with internal and external stakeholders, DIR staff, and the Department of Consumer Affairs (DCA) legal department. In addition, the CSLB anticipates a revenue loss that is unquantifiable as a result of the increase in the threshold.

VOTES

ASM BUSINESS AND PROFESSIONS: 16-0-2

YES: Berman, Flora, Alanis, Juan Carrillo, Chen, Dixon, Aguiar-Curry, Irwin, Jackson, Lowenthal, McKinnor, Stephanie Nguyen, Pellerin, Sanchez, Soria, Zbur

ABS, ABST OR NV: Bains, Low

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: April 24, 2024

CONSULTANT: Kaitlin Curry / B. & P. / (916) 319-3301 FN: 0003063

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2622

Author:(Juan Carrillo) – As Amended Ver:April 24, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill revises the contractor licensing exemption to allow a person without a contractor’s license to perform minor construction work if the total cost of the project is less than $1,000 (rather than $500), as annually adjusted for inflation, if certain conditions are met.

Specifically, this bill:

1. Authorizes a person without a contractor’s license to both advertise for and perform construction work or a work of improvement if the total cost of labor, materials, and all other items, is less than $1,000, as adjusted annually for the rate of inflation, as specified, if the following conditions are met:
2. The work or operation does not require a building permit.
3. The work or operation does not include the following trades or crafts: C-16 fire protection, C-22 asbestos abatement, or C-57 well drilling. 
4. The person performing the work or operation does not do any of the following:
5. Make structural changes to load bearing portions of an existing structure, including, but not limited to, footings, foundations, load bearing walls, partitions, and roof structures.
6. Install, replace, substantially alter, or extend electrical, mechanical, or plumbing systems or their component parts, or the mechanisms or devices that are part of those systems.
7. Specifies these provisions do not apply to a person who employs another person to perform, or assist in performing, the work or operation.
8. Requires the Contractors State Licensing Board (CSLB), beginning January 1, 2026, and annually thereafter, to adjust the amount specified above to reflect the rate of inflation, as measured by the California Consumer Price Index (CPI) as compiled and reported by the Department of Industrial Relations (DIR).

FISCAL EFFECT:

CSLB estimates ongoing special fund costs of $186,000 annually for one staff position to assist with developing language and adoption of regulations on an annual basis based on the annual CPI as compiled and reported by DIR. This workload would require working with internal and external stakeholders, DIR staff, and the Department of Consumer Affairs (DCA) legal department. In addition, the CSLB anticipates a revenue loss that is unquantifiable as a result of the increase in the threshold.

COMMENTS:

1. Purpose. According to the author:

In 1998 the legislature saw fit to raise the limit for non-licensed professionals to do handyman work from $300 to $500. In the quarter-century since then a lot has changed, but the cap for handypersons has remained stuck at $500 for labor and materials. The skyrocketing costs of materials since the pandemic has created a market in which even a simple ceiling fan installation can cost $500 and up. Additionally, current market conditions have caused most licensed contractors to turn down smaller jobs, making it difficult or impossible for homeowners with relatively minor projects to find a contractor willing to take the job. 

The result of this dynamic is a flourishing black-market where consumers and handypersons are forced to operate outside of the law. This means that there is little recourse for the consumer and for the handyperson if something goes wrong. [This bill] is a long over-due update to the exemption that would allow professionals to do handyman work thereby bringing these jobs and consumer transactions back into the legal light.

1. Background. The CSLB is responsible for the implementation and enforcement of the Contractors’ State License Law, the laws and regulations related to the licensure, practice, and discipline of the construction industry in California.

All businesses and individuals who construct or alter, or offer to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost, including both labor and materials, of one or more contracts on the project is $500 or more. Existing law exempts a person from licensure requirements if the aggregate contract price for labor, materials, and all other items is less than $500 and the work is considered “casual, minor or inconsequential.”

The threshold for contracting work without a license was last updated in 1998, when SB 2217 (O’Connell), Chapter 633, Statutes of 1998, increased the exemption from $300 to $500. Since 1998, the purchasing power of $500 has nearly doubled. This bill increases the contractor licensing exemption from $500 to $1,000 to reflect today’s purchasing power and requires annual adjustments for inflation going forward.

1. Related Legislation. SB 1455 (Ashby), of this legislative session, is the sunset review vehicle for the CSLB. SB 1455 is pending in the Senate Committee on Appropriations.
2. Prior Legislation. AB 899 (Cunningham), of the 2021-22 Legislative Session, would have required the CSLB to annually adjust the $500 contractor exemption amount to reflect the rate of inflation. AB 899 died pending a hearing in the Assembly Committee on Business and Professions.

SB 304 (Archuleta), of the 2021-22 Legislative Session, would have increased the contractor licensing exemption from $500 to $1,000. SB 304 bill was referred to but never heard in the Senate Committee on Appropriations.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing:

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Marc Berman, Chair

ABPCA Bill Id:AB 2622

Author:(Juan Carrillo) – As Introduced Ver:February 14, 2024

SUBJECT: Contractors: exemptions: advertisements.

SUMMARY: Authorizes a person who does not have a contractor’s license to both advertise for and perform construction work or a work of improvement if the total cost of labor, materials, and all other items, is less than $5,000.

EXISTING LAW:

1. Establishes the Contractors State License Board (CSLB) under the Department of Consumer Affairs (DCA) to implement and enforce the Contractors State License Law (License Law), which includes the licensing and regulation of contractors and home improvement salespersons. (Business and Professions Code (BPC) §§ 7000 et seq.)
2. Requires any person who advertises or puts out any sign, card, or device that would indicate to the public that they are a contractor, or who causes their name or business name to be included in a classified advertisement or directory under a classification for construction or work of improvement covered under the License Law be subject to the License Law regardless of whether their operations as a builder are exempt. (BPC § 7027)
3. Makes it a misdemeanor for any person to advertise for construction or work of improvement covered by the License Law unless that person holds a valid license from the CSLB, except as specified. (BPC § 7027.1)
4. Permits a person who is not licensed by the CSLB to advertise for construction work or a work improvement covered under the License Law, only if the aggregate contract price for labor, material, and all other items on the project or undertaking is less than $500 and the individual states in the advertisement that the individual is not licensed, as specified. (BPC § 7027.2)
5. Requires the CSLB to issue a citation to a person, if upon inspection or investigation, the registrar has probable cause to believe that the 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. (BPC § 7028.7)
6. States that the License Law does not apply, if the aggregate contract price for labor, materials, and all other items, is less than $500, that work or operation being considered of casual, minor, and inconsequential nature. (BPC § 7048)
7. States that the minor work exemption does not apply in any case wherein the work of construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than $500, as specified, and the 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 that he or she is a contractor or that he or she is qualified to engage in the business of a contractor. (BPC § 7048)
8. States that a person who engages in the business of, or acts in the capacity of a contractor, without having a license in connection with the offer or performance of repairs to a residential or non-residential structure, for damage caused by a natural disaster, for which a state of emergency is proclaimed by the Governor, or a major disaster declared by the president of the United States is punishable by a fine up to $10,000 or by imprisonment. (BPC § 7028.16)

THIS BILL:

1. Authorizes a person who is not licensed pursuant to the License Law to advertise for construction work or a work of improvement covered by the License Law if the aggregate contract price for labor, materials, and all other items on a project or undertaking is less than $5,000 and the person states in the advertisement that they are not licensed by the CSLB.
2. Exempts from the License Law a work or operation on one undertaking or project by one or more contracts, if the aggregate price for labor, materials, and all other items, is less than $5,000, that work or operation being considered of casual, minor, or inconsequential nature.
3. Makes non-substantive and conforming changes.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose. This bill is author-sponsored. According to the author:

In 1998 the legislature saw fit to raise the limit for non-licensed professionals to do handyman work from $300 to $500. In the quarter-century since then a lot has changed, but the cap for handypersons has remained stuck at $500 for labor and materials. The skyrocketing costs of materials since the pandemic has created a market in which even a simple ceiling fan installation can cost $500 and up. Additionally, current market conditions have caused most licensed contractors to turn down smaller jobs, making it difficult or impossible for homeowners with relatively minor projects to find a contractor willing to take the job. 

The result of this dynamic is a flourishing black-market where consumers and handypersons are forced to operate outside of the law. This means that there is little recourse or responsibility for the consumer and for the handyperson if something goes wrong. [This bill] is a long over-due update to the exemption that would allow professionals to do handyman work thereby bringing these jobs and consumer transactions back into the legal light.

Background.

The CSLB is responsible for the implementation and enforcement of the License Law, which governs the licensure, practice, and discipline of the construction industry in California. The CSLB issues licenses to business entities and sole proprietors. Each license requires a qualifying individual (a “qualifier”) who directly supervises and controls construction work performed under the license. The qualifying individual must be at least 18 years old, have at least four years of specified work experience, undergo a criminal background check, and pass both a law and business exam as well as a trade-specific exam.^[1] Additionally, licensed contractors are required to maintain a contractor’s bond and workers’ compensation insurance, and pay various fees.^[2]

The CSLB currently issues four license types: “A”’ General Engineering Contractor license; “B” General Building Contractor license; “B-2” Residential Remodeling Contractor license; and “C” Specialty Contractor licenses of which there are 42 classifications. Each licensing classification (e.g. electrical, drywall, painting, plumbing, roofing, and fencing) specifies the type of contracting work permitted in that classification. Specific license holders are also eligible for Asbestos or Hazardous Substance Removal certifications issued by the CSLB.

Any business or individual who constructs or alters, or offers to construct or alter, any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the CSLB if the total cost of labor, materials, and all other items of one or more contracts on the project is $500 or more. If less than $500, the work is considered “casual, minor or inconsequential,” and a license is not required. Known as the “minor work exemption,” this exemption does not apply in any case where the construction work is only a part of a larger project, as specified. Nor does the exemption apply to an individual who advertises that they are a licensed contractor.

Contracting for work valued at $500 or more without a license is a misdemeanor, punishable by up to six months in jail and/or up to a $5,000 fine. Moreover, contracting without a license when one is required in a state or federally-declared disaster area can result in felony charges. The CSLB may issue a citation to an unlicensed individual who violates the License Law, but otherwise has very limited enforcement capability.

The threshold for contracting work without a license was last updated in 1998, when SB 2217 (O’Connell) Chapter 633, Statutes of 1998, increased the dollar amount for the exemption from $300 to $500. Until 2004, there was also a statutory requirement that an individual performing work under the $500 exemption threshold notify the consumer that the individual was not a licensed contractor. That requirement was removed in 2004 by SB 1914 (Senate Business and Professions Committee), Chapter 865, Statutes of 2004, because the CSLB has no jurisdiction over unlicensed individuals performing work under the exemption.

Since 1998, the purchasing power of $500 has drastically decreased; $500 in 1998 has the same buying power as $966.37 today.^[3] As such, handypersons may be priced out of work that they were once legally allowed to perform. This bill would increase the minor work exemption from $500 to $5,000. According to the author’s office, this change provides a pathway for low-income individuals to build wealth.

Current Related Legislation.

SB 1071 (Dodd) would exempt any applicant or licensee that has no employees from workers compensation insurance requirements, if the applicant or licensee provides both an affidavit to the CSLB affirming they have no employees and adequate proof demonstrating they are operating without employees. SB 1071 is pending in the Senate Business, Professions, and Economic Development Committee.

SB 1455 (Ashby) is the sunset review vehicle for the CSLB and will be amended to extend the sunset date for the CSBL and enact technical changes, statutory improvements, and policy reforms in response to issues raised during the CSLB’s sunset review oversight process. SB 1455 is pending in the Senate Business, Professions, and Economic Development Committee.

Prior Related Legislation.

AB 1874 (Smith) of 2022 would have authorized a person who is not licensed as a contractor to advertise for construction work or a work of improvement if the total cost of labor is less than $500 and the person states in the advertisement that they are not a licensed contractor. AB 1874 failed passage in this committee.

AB 899 (Cunningham) of 2021 would have required the CSLB to annually adjust the $500 amount by regulation to reflect the rate of inflation, as measured by the Consumer Price Index or other method of measuring the rate of inflation that the CSLB determines is reliable and generally accepted. AB 899 died pending a hearing in this committee.

SB 304 (Archuleta) of 2021 would have increased from $500 to $1,000 the value of a construction contract that is not subject to regulation under the License Law, so long as the nature of the work performed is considered casual, minor, or inconsequential. SB 304 bill died in Senate Appropriations.

SB 1189 (McGuire), Chapter 364, Statutes of 2020, created a B-2 Residential Remodeling Contractor license as a new classification of contracting business and revised the definition of home improvement.

SB 315 (Lieu), Chapter 392, Statutes of 2014, prohibited a person who is not licensed as a contractor to advertise for construction work that would cost more than $500, including labor and materials.

AB 2217 (O’Connell), Chapter 633, Statutes of 1998, increased from $300 to $500 the value of a construction contract that is not subject to regulation by the CSLB, so long as the nature of the work performed is "casual, minor, or inconsequential."

ARGUMENTS IN SUPPORT:

The Institute for Justice writes in support of this bill:

This bill would allow unlicensed contractors to take on more small-scale projects without the burden of licensing requirements. For many low-income workers and individuals from marginalized or underrepresented communities, obtaining a contractor’s license can be a daunting and expensive process. To qualify for licensure, applicants must have documented in the previous 10 years at least four full years of relevant work experience and take an examination. An applicant must additionally purchase a $25,000 contractor’s bond, which can cost some individuals over $2,000 a year to maintain. By significantly increasing the contract price threshold, [this bill] would offer a pathway for these unlicensed contractors to gain valuable experience, earn money, and establish themselves in the industry without the initial financial burden of licensure. Moreover, expanding the licensing exemption would provide consumers with more affordable options for essential home improvement, repair, and maintenance services. In a state where homeownership costs are skyrocketing, many Californians are struggling to afford basic upkeep and repairs for their homes. By allowing unlicensed contractors to take on smaller projects valued up to $5,000, homeowners will have greater access to affordable and reliable services, which would alleviate some of the financial burdens associated with homeownership.

ARGUMENTS IN OPPOSITION:

The California Chapters of the National Electrical Contractors Association, California Legislative Conference of the Plumbing, Heating and Piping Industry, and the California Association of Sheet Metal and Air Conditioning Contractors collectively write in opposition:

This bill would undermine existing consumer protections by allowing unlicensed, unbonded, and uninsured contractors to perform work up to $5,000 in any home or business. Routine plumbing, electrical and HVAC services that require skills, training, special safety equipment and knowledge will now fall below this threshold. In these situations, the consumer is exposed to significant risk of property damage, fraud and economic harm from unlicensed contractors with little recourse for corrective action through the CSLB. Furthermore, the CSLB licensed contractors who have successfully demonstrated industry knowledge, have obtained bonds, and carry workers compensation insurance are also harmed by [this bill]. Under this bill, these licensed contractors would be forced to compete in the open marketplace on price with unlicensed contractors who don’t share the same knowledge, investments in equipment or normal expenses related to bonds and workers compensation insurance to protect their customers.

POLICY ISSUE(S) FOR CONSIDERATION:

Consumer Harm. By increasing the “minor work exemption” to $5,000, this bill would increase the financial risk that could be assumed by a consumer. In addition, increasing the threshold as proposed may also expand the scope of work that may be performed without a contractor’s license. Licensure demonstrates competency via passage of state licensing exams and proof of qualifying work experience, so there is less assurance that the work performed will be satisfactory. Further, while the CSLB has the ability to hold licensed contractors accountable for contracted work, there is little the CSLB can do for consumers if an unlicensed individual fails to complete a project or the completed work is unsatisfactory. Between 2015 and 2020, approximately 26% of complaints from residential consumers stemmed from construction work valued between $501 and $5,000. Whereas licensed contractors are required to maintain a contractor’s bond, unlicensed individuals are not. In a majority of cases involving unlicensed work, a consumer’s only means of recourse being to seek restitution through the civil courts—an option that may not be feasible for every consumer. Additionally, if the handyperson does not have workers’ compensation insurance, the consumer may be held liable for injuries sustained during the work by the unlicensed contractor or their employees.

Employee Protection. Increasing the “minor work exemption” to $5,000 could increase scope of the work that an unlicensed person could do to include larger projects that would require employees. However, it is unclear whether an unlicensed individual can obtain a workers’ compensation insurance policy without a contractor’s license. Workers’ compensation insurance provides several benefits including coverage of medical expenses, temporary and permanent disability benefits (payments for lost wages), supplemental job displacement benefits, and death benefits—none of which an employee would be entitled to if the unlicensed individual does not have workers’ compensation insurance.^[4]

Unfair Competition for Licensed Contractors. There is considerable time and expense in obtaining and maintaining a contractor’s license. Consequently, this bill would create an unfair advantage if unlicensed individuals are able the same services as a licensed contractor but at a lower cost.

License Renewal. Licensed contractors may choose to forgo license renewal if they can perform the same work under the “minor work exemption,” the result of which may be more unlicensed activity.

AMENDMENTS:

To address concerns related to consumer harm, employee protection, unfair competition, and unlicensed activity, the author has agreed to amend the bill as follows:

On page 2, after line 2:

7027.2. (a) Notwithstanding any other provision of this chapter, a person who is not licensed pursuant to this chapter may advertise for construction work or a work of improvement covered by this chapter only if the aggregate contract price for labor, material, and all other items on a project or undertaking is less than five one thousand dollars ($5,000), ($1,000), as adjusted pursuant to subdivision (b), and the person states in the advertisement that the person is not licensed under this chapter.

(b) Commencing on January 1, 2026, and annually thereafter, the board shall adjust the amount specified in subdivision (a) to reflect the rate of inflation, as measured by the California Consumer Price Index as compiled and reported by the Department of Industrial Relations.

On page 2, after line 12:

7048. (a) This chapter does not apply to a work or operation on one undertaking or project by one or more contracts, if the aggregate contract price for labor, materials, and all other items, is less than five one thousand dollars ($5,000), ($1,000), as adjusted pursuant to subdivision (d), that work or operation being considered of casual, minor, or inconsequential nature. nature, and the work or operation meets all of the following:

(1) The work or operation does not require a building permit.

(2) The work or operation does not include one of the following trades or crafts:

(A) C-16 Fire Protection.

(B) C-22 Asbestos Abatement.

(C) C-57 Well Drilling.

(3) The person performing the work or operation does not do any of the following:

(A) Make structural changes to load bearing portions of an existing structure, including, but not limited to, footings, foundations, load bearing walls, partitions, and roof structures.

(B) Install, replace, substantially alter, or extend electrical, mechanical, or plumbing systems or their component parts, or the mechanisms or devices that are part of those systems.

(b) This section does not apply in a case wherein the work of construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than five one thousand dollars ($5,000) ($1,000), as adjusted pursuant to subdivision (d), for the purpose of evasion of this chapter or otherwise.

(c) This section does not apply to a person who advertises does either of the following:

(1) Advertises or puts out a sign or card or other device that might indicate to the public that the person is a contractor or that the person is qualified to engage in the business of a contractor.

(2) Employs another person to perform, or assist in performing, the work or operation.

(d) Commencing on January 1, 2026, and annually thereafter, the board shall adjust the amount specified in subdivisions (a) and (b) to reflect the rate of inflation, as measured by the California Consumer Price Index as compiled and reported by the Department of Industrial Relations.

SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

REGISTERED SUPPORT:

California Association of Realtors
Institute for Justice

REGISTERED OPPOSITION:

California Association of Sheet Metal & Air Conditioning Contractors National Association
California Landscape Contractors Association
California Legislative Conference of Plumbing, Heating & Piping Industry
California State Association of Electrical Workers
California State Pipe Trades Council
Coalition of California Utility Employees
National Electrical Contractors Association
State Building & Construction Trades Council of California
Western States Council Sheet Metal, Air, Rail and Transportation

Analysis Prepared by: Kaitlin Curry / B. & P. / (916) 319-3301

1. Get Licensed to Build Guide (ca.gov) ↑

2. Fees include an original application fee, currently set at $450, and initial license fee, which ranges from $200 to $350. Additionally, licensees are required to pay renewal fees biennially for active licenses, which currently range from $450 to $700, if paid on time, and every four years for inactive licenses, which currently range from $300 to $500, if paid on time. Reactivating a license currently ranges from $450 to $700. Additional fees may also be assessed based on specific requirements for each license classification or type of business entity. ↑

3. CPI Inflation Calculator (bls.gov) ↑

4. California Department of Industrial Relations Division of Workers' Compensation FAQs For Employees ↑