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AB-249 Contractors.(2011-2012)

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AB249:v95#DOCUMENT

Amended  IN  Assembly  January 04, 2012
Amended  IN  Assembly  August 22, 2011
Amended  IN  Assembly  April 04, 2011
Amended  IN  Assembly  March 15, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 249


Introduced  by  Assembly Member Bill Berryhill

February 03, 2011


An act to amend Section 7031 of the Business and Professions Code, relating to contractors.


LEGISLATIVE COUNSEL'S DIGEST


AB 249, as amended, Bill Berryhill. Contractors.
Existing law, the Contractors’ State License Law, creates the Contractors’ State License Board within the Department of Consumer Affairs and provides for the licensure and regulation of contractors. Existing law prohibits a person, acting as a contractor, from bringing an action to collect compensation for performance of any act or contract requiring a license without alleging that he or she was licensed at all times during the performance of the act or contract, except as specified. Existing law authorizes a person who utilizes an unlicensed contractor to bring an action in any court of competent jurisdiction in this state for recovery of all compensation paid to the unlicensed contractor for performance of any act or contract.
This bill would authorize a person who utilizes those services for the construction or improvement of residential property, as specified, to recover 2 times the amount of compensation paid for work performed during periods when the contractor was not duly licensed. It would also authorize a person who utilizes the services of a contractor for the construction or improvement of property other than specified residential property to bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the contractor for performance of any act or contract during the time the contractor was not properly licensed. The bill would authorize a contractor who was duly licensed with respect to a portion of work performed, as specified, to bring an action to recover compensation for that portion of the work define an “unlicensed contractor,” for these purposes, as a person who has engaged in the business or acted in the capacity of a contractor and who has either never been licensed as a contractor under the Contractors’ State License Law or who performed an act or contract after his or her license was suspended pursuant to a disciplinary action. The bill would state the intent of the Legislature in this regard.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 7031 of the Business and Professions Code is amended to read:

7031.
 (a) Except as provided in subdivisions subdivision (e), (g), and (h), no person engaged in the business or acting in the capacity of a contractor may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that he or she was a duly licensed contractor at all times during the performance of that act or contract, regardless of the merits of the cause of action brought by the person, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029.

(b)Except as provided in subdivisions (e), (g), and (h):

(1)A person that utilizes the services of an unlicensed contractor for the construction or improvement of residential property consisting of one to four units may bring an action in any court of competent jurisdiction in this state to recover two times the amount of any compensation paid to the contractor for performance of any act or contract.

(2)

(b) (1) A person that utilizes the services of a an unlicensed contractor for the construction or improvement of property other than residential property consisting of one to four units may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract that occurred at anytime during which the contractor did not possess a renewable license in accordance with this chapter, or during which the contractor’s license was under suspension or expired.
(2) For purposes of this subdivision, “unlicensed contractor” means a person who has engaged in the business or acted in the capacity of a contractor and either of the following applies:
(A) The person has never been licensed as a contractor under this chapter.
(B) The person was previously licensed as a contractor under this chapter and performed an act or contract after his or her license had been revoked or suspended pursuant to a disciplinary action.
(c) A security interest taken to secure any payment for the performance of any act or contract for which a license is required by this chapter is unenforceable if the person performing the act or contract was not a duly licensed contractor at all times during the performance of the act or contract.
(d) If licensure or proper licensure is controverted, then proof of licensure pursuant to this section shall be made by production of a verified certificate of licensure from the Contractors’ State License Board which establishes that the individual or entity bringing the action was duly licensed in the proper classification of contractors at all times during the performance of any act or contract covered by the action. Nothing in this subdivision shall require any person or entity controverting licensure or proper licensure to produce a verified certificate. When licensure or proper licensure is controverted, the burden of proof to establish licensure or proper licensure shall be on the licensee.
(e) The judicial doctrine of substantial compliance shall not apply under this section where the person who engaged in the business or acted in the capacity of a contractor has never been a duly licensed contractor in this state. However, notwithstanding subdivision (b) of Section 143, the court may determine that there has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the business or acted in the capacity of a contractor (1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, (3) did not know or reasonably should not have known that he or she was not duly licensed when performance of the act or contract commenced, and (4) acted promptly and in good faith to reinstate his or her license upon learning it was invalid.
(f) The exceptions to the prohibition against the application of the judicial doctrine of substantial compliance found in subdivision (e) shall apply to all contracts entered into on or after January 1, 1992, and to all actions or arbitrations arising therefrom, except that the amendments to subdivisions (e) and (f) enacted during the 1994 portion of the 1993–94 Regular Session of the Legislature shall not apply to either of the following:
(1) Any legal action or arbitration commenced prior to January 1, 1995, regardless of the date on which the parties entered into the contract.
(2) Any legal action or arbitration commenced on or after January 1, 1995, if the legal action or arbitration was commenced prior to January 1, 1995, and was subsequently dismissed.

(g)If the contractor was duly licensed upon commencement of an act or contract and reinstated a lapsed or suspended license prior to completion of the act or contract, the contractor may bring or maintain an action limited to recovery of compensation payable for any portion of the work performed during periods when the contractor was duly licensed. Any action authorized by subdivision (b) may seek recovery of compensation previously paid to the contractor only for that portion of the work performed during periods when the contractor was not duly licensed.

(h)If the contractor was licensed during the performance of the act or contract but contracted for or performed work outside of his or her license classification, the contractor may bring or maintain an action limited to recovery of compensation payable for that portion of the work performed within the scope of work authorized by his or her license classification. Any action authorized by subdivision (b) may seek recovery of compensation previously paid to the contractor for that portion of the work performed that is not within the scope of work authorized by the contractor’s license classification.

SEC. 2.

 It is the intent of the Legislature that amendments to Section 7031 of the Business sand Professions Code made by this act shall affect only the rights of the parties to a contract to bring a civil action under that section to recover compensation paid or payable in connection with a work of improvement. This act shall not be construed to limit or modify any civil action authorized to be brought by the registrar of the Contractors’ State License Board or other law enforcement agency to enforce any provision of the Contractors’ State License Law.