ARTICLE 5. Licensing [7065. - 7077.]

Cal. Business and Professions Code - BPC 5.

in effect

Cal. Business and Professions Code - BPC § 7065. Section 7065.

(a) Under rules and regulations adopted by the board and approved by the director, the registrar shall investigate, classify, and qualify applicants for contractors’ licenses by written examination. This examination shall include questions designed to show that the applicant has the necessary degree of knowledge required by Section 7068 and shall include pertinent questions relating to the laws of this state and the contracting business and trade. (b) (1) Contractors’ licenses are to be issued to individual owners, partnerships, corporations, limited liability companies, and participating tribes, in accordance with this chapter. (A) Every person who is an officer, member, responsible manager, or director of a corporation or limited liability company seeking licensure under this chapter shall be listed on the application as a member of the personnel of record. (B) Every person who is a member of a partnership seeking licensure under this chapter shall be listed on the application as a member of the personnel record. (2) A corporation or limited liability company, whether foreign or domestic, seeking licensure under this chapter shall provide its identification number issued by the Secretary of State. (3) A tribal business, including a corporation organized or chartered by a federally recognized tribe pursuant to tribally enacted laws or to Section 17 of the federal Act of June 18, 1934, popularly known as the “Indian Reorganization Act,” shall provide verification of its status as a tribal business. Verification may include, but is not limited to, the following: (A) Enacted resolution ratifying the charter pursuant to Section 17 of the Indian Reorganization Act. (B) Enacted resolution authorizing the tribally chartered corporation under tribally enacted laws. (C) Articles of incorporation or by-laws. (D) A current list of federally recognized tribes or directory of tribal leadership published under the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. Sec. 5131) or on the internet website of the United States Bureau of Indian Affairs. (c) An applicant shall qualify for licensure in accordance with this subdivision as follows: (1) An individual owner may qualify by examination for a contractor’s license upon the appearance of the owner or a qualifying individual appearing as a responsible managing employee on behalf of the owner. (2) A partnership may qualify by examination for a contractor’s license upon the appearance of a partner or a qualifying individual appearing as a responsible managing employee on behalf of the partnership. (3) A corporation or participating tribe may qualify by examination for a contractor’s license upon the appearance of a qualifying individual appearing either as a responsible managing officer or a responsible managing employee on behalf of the corporation. (4) A limited liability company may qualify by examination for a contractor’s license upon the appearance of a qualifying individual appearing as a responsible managing officer, a responsible managing manager, a responsible managing member, or a responsible managing employee on behalf of the company. (d) No examination shall be required of a qualifying individual if, within the five-year period immediately preceding the application for licensure, the qualifying individual has either personally passed the written examination for the same classification being applied for, or has served as the qualifying individual for a licensee whose license was in good standing at any time during the five-year period immediately preceding the application for licensure and in the same classification being applied for. (e) The registrar may contract with a public or private organization to conduct or administer the examination. The registrar may also contract with a public or private organization for materials or services related to the examination.

Cal. Business and Professions Code - BPC § 7065.01. Section 7065.01.

Notwithstanding Section 7065, no trade examination shall be required of an applicant for the limited specialty license classification.

Cal. Business and Professions Code - BPC § 7065.1. Section 7065.1.

Notwithstanding Section 7065, the registrar may waive the examination for a contractor’s license under any of the following circumstances: (a) The qualifying individual has, for five of the seven years immediately preceding the application for licensure, been listed on the official records of the board as a member of the personnel of any licensee who held a license, which was active and in good standing, in the same classification being applied for, and who during the period listed on the license has been actively engaged in a licensee’s construction activities in the same classification within which the applicant applies for a license. (b) The qualifying individual is an immediate member of the family of a licensee whose individual license was active and in good standing for five of the seven years immediately preceding the application for licensure, and the qualifying individual is able to show all of the following: (1) The qualifying individual has been actively engaged in the licensee’s business for five of the seven years immediately preceding the application for licensure. (2) The license is required to continue the existing family business in the event of the absence or death of the licensee. (3) An application is made for a new license in the same classifications in which the licensee is or was licensed. (c) The qualifying individual is an employee of a corporation or a limited liability company seeking to replace its former qualifying individual and has been employed by that corporation or limited liability company under the following conditions: (1) For five of the seven years immediately preceding the application for licensure, the qualifying individual has been continually employed by the corporation or limited liability company in a supervisory capacity in the same classifications being applied for. (2) For five of the seven years immediately preceding the application for licensure, the corporation or limited liability company has held an active license in good standing in the same classifications being applied for. (3) The corporation or limited liability company has not requested a waiver under this subdivision within the past five years. For purposes of this section, employees of a corporation or limited liability company shall include, but not be limited to, the officers of a corporation and the officers and managers of a limited liability company.

Cal. Business and Professions Code - BPC § 7065.2. Section 7065.2.

Notwithstanding Section 7065, the registrar may waive the examination for a contractor’s license if the applicant has previously held a valid contractor’s license in this state and has been acting in the capacity of a contractor for the United States government in a position exempt from licensure under this chapter.

Cal. Business and Professions Code - BPC § 7065.3. Section 7065.3.

Notwithstanding Section 7065, upon a conclusive showing by a licensee that he or she possesses experience satisfactory to the registrar in the classification applied for, an additional classification may be added, without further examination, under all of the following conditions: (a) For five of the seven years immediately preceding the application, the qualifying individual of the licensee has been listed as a member of the personnel of any licensee whose license was active and in good standing, and who during the period listed on a license was actively engaged in the licensee’s construction activities. (b) The qualifying individual for the applicant has had within the last 10 years immediately preceding the filing of the application, not less than four years experience as a journeyman, foreman, supervising employee, or contractor in the classification within which the licensee intends to engage in the additional classification as a contractor. (c) The application is, as determined by the registrar, for a classification that is closely related to the classification or classifications in which the licensee is licensed, or the qualifying individual is associated with a licensed general engineering contractor or licensed general building contractor and is applying for a classification that is a significant component of the licensed contractor’s construction business as determined by the registrar. This section shall not apply to an applicant who is licensed solely within the limited-specialty classifications. Pursuant to Section 7065, the registrar shall conduct a comprehensive investigation of no less than 3 percent of applications filed under this section to ensure that the applicants met the experience requirements of this section.

Cal. Business and Professions Code - BPC § 7065.4. Section 7065.4.

The registrar may accept the qualifications of an applicant who is licensed as a contractor in a similar classification in another state if that state accepts the qualifications of a contractor licensed in this state for purposes of licensure in that other state, and if the board ascertains, on a case-by-case basis, that the professional qualifications and conditions of good standing for licensure and continued licensure are at least the same or greater in that state as in California. The registrar may waive the trade examination for that applicant if the applicant provides written certification from that other state in which he or she is licensed, that the applicant’s license has been in good standing for the previous five years.

Cal. Business and Professions Code - BPC § 7065.05. Section 7065.05.

The board shall periodically review and, if needed, revise the contents of qualifying examinations to insure that the examination questions are timely and relevant to the business of contracting. The board shall, in addition, construct and conduct examinations in such a manner as to preclude the possibility of any applicant having prior knowledge of any specific examination question.

Cal. Business and Professions Code - BPC § 7065.5. Section 7065.5.

No license shall be issued to a minor, nor to any partnership a partner of which is a minor, nor to any corporation any officer, director or responsible managing employee of which is a minor, nor to any limited liability company any officer, manager, or responsible managing employee of which is a minor, nor to any other kind of business organization in which a minor holds a responsible official position, unless the minor shall first have had a guardian appointed by a court of competent jurisdiction.

Cal. Business and Professions Code - BPC § 7065.06. Section 7065.06.

(a) Before the board revises the examination for a landscaping contractor (C-27), the board shall confer with the Department of Water Resources and the California Landscape Contractors Association to determine whether any updates or revisions to the examination are needed to reflect new and emerging landscape irrigation efficiency practices. (b) The board shall ensure that the examination includes questions that are specific to water use efficiency and sustainable practices to help ensure that the state’s water efficiency needs identified in the California Water Plan, described in Section 10004 of the Water Code, are sufficiently supported. (c) The board shall ensure that the reference study material for the examination continues to include the most current version of the Model Water Efficient Landscape Ordinance (23 Cal. Code Regs. 490, et seq.) and shall add other collateral material specific to water use efficiency and sustainability.

Cal. Business and Professions Code - BPC § 7066. Section 7066.

To obtain an original license, an applicant shall submit to the registrar an application in writing containing the statement that the applicant desires the issuance of a license under the terms of this chapter. The application shall be made on a form prescribed by the registrar in accordance with the rules and regulations adopted by the board and shall be accompanied by the fee fixed by this chapter.

Cal. Business and Professions Code - BPC § 7066.5. Section 7066.5.

Any person may obtain blank license application forms from the board or may cause to be printed forms used by or approved by the Registrar of Contractors.

Cal. Business and Professions Code - BPC § 7067.6. Section 7067.6.

(a) Every application form for an original license, for renewal thereof, for reinstatement or for reissuance, including both active and inactive licenses, shall be signed by both the applicant and by the person qualifying on behalf of an individual or firm as referred to in Section 7068.1. (b) (1) Notwithstanding any other law, the board may implement a system that provides for the electronic transmission of an application described in subdivision (a) and the acceptance of a digital or electronic signature as part of the filing of those applications. (2) The board by regulation may specify the form and manner of these transmissions and acceptances, including, but not limited to, the adoption of any protocols necessary to ensure the validity and security of any information, signature, data, or document transmitted electronically or digitally. Upon the effective date of the regulations, the electronic submission of an initial license application or a renewal application, including a digital or electronic signature, shall satisfy the requirements of this article.

Cal. Business and Professions Code - BPC § 7068. Section 7068.

(a) The board shall require an applicant to show the degree of knowledge and experience in the classification applied for, and the general knowledge of the building, safety, health, and lien laws of the state and of the administrative principles of the contracting business that the board deems necessary for the safety and protection of the public. (b) An applicant shall qualify in regard to their experience and knowledge in one of the following ways: (1) If an individual, they shall qualify by personal appearance or by the appearance of their responsible managing employee who is qualified for the same license classification as the classification being applied for. (2) If a partnership or a limited partnership, it shall qualify by the appearance of a general partner or by the appearance of a responsible managing employee who is qualified for the same license classification as the classification being applied for. (3) If a corporation, or any other combination or organization, it shall qualify by the appearance of a responsible managing officer or responsible managing employee who is qualified for the same license classification as the classification being applied for. (4) If a limited liability company, it shall qualify by the appearance of a responsible managing officer, a responsible managing manager, responsible managing member, or a responsible managing employee who is qualified for the same license classification as the classification being applied for. (c) (1) For purposes of this chapter, “a responsible managing employee” means an individual who is a bona fide employee of the applicant and is actively engaged in the classification of work for which that responsible managing employee is the qualifying person on behalf of the applicant. (2) For purposes of this subdivision, the following definitions apply: (A) “Bona fide employee of the applicant” means an employee who is permanently employed by the applicant. (B) “Actively engaged” means working 32 hours per week, or 80 percent of the total hours per week that the applicant’s business is in operation, whichever is less. (d) The board shall, in addition, require an applicant who qualifies by means of a responsible managing employee under either paragraph (1) or (2) of subdivision (b) to show their general knowledge of the building, safety, health, and lien laws of the state and of the administrative principles of the contracting business as the board deems necessary for the safety and protection of the public. (e) Except in accordance with Section 7068.1, no person qualifying on behalf of an individual or firm under paragraph (1), (2), (3), or (4) of subdivision (b) shall hold any other active contractor’s license while acting in the capacity of a qualifying individual pursuant to this section. (f) At the time of application for renewal of a license, the current qualifying individual shall file a statement with the registrar, on a form prescribed by the registrar, verifying their capacity as a qualifying individual to the licensee. (g) Statements made by or on behalf of an applicant as to the applicant’s experience in the classification applied for shall be verified by a qualified and responsible person. In addition, the registrar shall, as specified by board regulation, randomly review a percentage of such statements for their veracity. (h) The registrar shall review experience gained by applicants from other states to determine whether all of that experience was gained in a lawful manner in that state.

Cal. Business and Professions Code - BPC § 7068.1. Section 7068.1.

(a) The person qualifying on behalf of an individual or firm under paragraph (1), (2), (3), or (4) of subdivision (b) of Section 7068 shall be responsible for exercising supervision and control of their employer’s or principal’s construction operations to secure compliance with this chapter and the rules and regulations of the board. This person shall not act in the capacity of the qualifying person for an additional individual or firm unless one of the following conditions exists: (1) There is a common ownership of at least 20 percent of the equity of each individual or firm for which the person acts in a qualifying capacity. (2) The additional firm is a subsidiary of or a joint venture with the first. “Subsidiary,” as used in this subdivision, means any firm at least 20 percent of the equity of which is owned by the other firm. (3) With respect to a firm under paragraph (2), (3), or (4) of subdivision (b) of Section 7068, the majority of the partners, officers, or managers are the same. (b) Notwithstanding paragraphs (1) to (3), inclusive, of subdivision (a), a qualifying individual may act as the qualifier for no more than three firms in any one-year period. (c) The following definitions shall apply for purposes of this section: (1) “Firm” means a partnership, a limited partnership, a corporation, a limited liability company, or any other combination or organization described in Section 7068. (2) “Person” is limited to natural persons, notwithstanding the definition of “person” in Section 7025. (3) “Supervision and control” means direct supervision or control or monitoring and being available to assist others to whom direct supervision and control has been delegated. (4) “Direct supervision or control” means any of the following: (A) Supervising construction operations. (B) Managing construction activities by making technical and administrative decisions. (C) Checking jobs for proper workmanship. (D) Supervision on construction sites. (d) The board shall require every applicant or licensee qualifying by the appearance of a qualifying individual to submit detailed information on the qualifying individual’s duties and responsibilities for supervision and control of the applicant’s construction operations. (e) Violation of this section shall constitute a cause for disciplinary action and shall be punishable as a misdemeanor by imprisonment in a county jail not to exceed six months, by a fine of not less than three thousand dollars ($3,000), but not to exceed five thousand dollars ($5,000), or by both the fine and imprisonment.

Cal. Business and Professions Code - BPC § 7068.2. Section 7068.2.

(a) If the responsible managing officer, responsible managing employee, responsible managing member, or responsible managing manager disassociates from the licensed entity, the licensee or the qualifier shall notify the registrar in writing within 90 days after the date of disassociation. The licensee shall have 90 days after the date of disassociation in which to replace the qualifier. Upon failure to replace the qualifier within 90 days after the date of disassociation, the license shall be automatically suspended or the classification removed at the end of the 90 days. (b) To replace a responsible managing officer, responsible managing employee, responsible managing member, or responsible managing manager, the licensee shall file an application as prescribed by the registrar, accompanied by the fee fixed by this chapter, designating an individual to qualify as required by this chapter. (c) Upon failure of the licensee or the qualifier to notify the registrar of the disassociation of the qualifier within 90 days after the date of disassociation, the license shall be automatically suspended or the classification removed and the qualifier removed from the license effective the date the written notification is received at the board’s headquarters office. (d) The person qualifying on behalf of a licensee under Section 7068 shall be responsible for the licensee’s construction operations until the date of disassociation or the date the board receives the written notification of disassociation, whichever is later. (e) (1) Upon a showing of good cause by the licensee, the registrar may review and accept a petition for one 90-day extension to replace the qualifier immediately following the initial 90-day period described in subdivision (a) only under one or more of the following circumstances: (A) If the licensee is disputing the date of disassociation. (B) If the responsible managing officer, employee, member, or manager has died. (C) If there has been a delay in processing the application to replace the qualifier that is out of the applicant’s control and it is the responsibility of the board or another state or federal agency that is relied upon in the application process. (2) This petition shall be received within 90 days after the date of disassociation or death or delay. The petition shall only be considered if an application to replace the qualifier as prescribed by the registrar is on file with the board. Under the circumstances described in subparagraphs (A) and (B) of paragraph (1), the licensee shall have no more than a total of 180 days after the date of disassociation or death in which to replace the qualifier. (f) Failure of the licensee or the qualifier to notify the registrar of the qualifier’s disassociation within 90 days after the date of disassociation shall constitute grounds for disciplinary action.

Cal. Business and Professions Code - BPC § 7068.5. Section 7068.5.

It is a misdemeanor for any person other than the examinee named in the application to take the qualifying examination on behalf of an applicant for a contractor’s license.

Cal. Business and Professions Code - BPC § 7068.7. Section 7068.7.

Any person who obtains and provides for another the qualifying examination, or any part thereof, when not authorized to do so, is guilty of a misdemeanor.

Cal. Business and Professions Code - BPC § 7069. Section 7069.

(a) An applicant, and each officer, director, partner, manager, associate, and responsible managing employee thereof, shall not have committed acts or crimes that are grounds for denial of licensure under Section 480. (b) As part of an application for a contractor’s license, the board shall require an applicant to furnish a full set of fingerprints for purposes of conducting a criminal history record check. Fingerprints furnished pursuant to this subdivision shall be submitted in an electronic format if readily available. Requests for alternative methods of furnishing fingerprints are subject to the approval of the registrar. The board shall use the fingerprints furnished by an applicant to obtain criminal history information on the applicant from the Department of Justice and the United States Federal Bureau of Investigation, and the board may obtain any subsequent arrest information that is available.

Cal. Business and Professions Code - BPC § 7069.1. Section 7069.1.

(a) Upon notification of an arrest of a member of the personnel of a licensee or a home improvement salesperson, the registrar, by first-class mail to the last official address of record, may require the arrestee to provide proof of the disposition of the matter. (b) The proof required by this section shall be satisfactory for carrying out the purposes of this chapter, and at the registrar’s discretion may include, but is not limited to, certified court documents, certified court orders, or sentencing documents. Any proof required by this section shall be received by the registrar within 90 days of the date of the disposition, or within 90 days of the registrar’s demand for information if that date is later. (c) Failure to comply with the provisions of this section constitutes cause for disciplinary action.

Cal. Business and Professions Code - BPC § 7070. Section 7070.

An applicant shall show that he or she has never been denied a license or had a license revoked for reasons that would preclude the granting of the license applied for. Where the board has denied an application for license under this chapter or Chapter 2 (commencing with Section 480) of Division 1.5, it shall, in its decision, or in its notice under subdivision (b) of Section 485, inform the applicant of the earliest date that the applicant may reapply for a license, which shall be one year from the effective date of the decision or service of notice under subdivision (b) of Section 485, unless the board prescribes an earlier date.

Cal. Business and Professions Code - BPC § 7071. Section 7071.

No license shall be issued to a corporation, partnership, limited liability company, or other combination or organization if a responsible officer or director of the corporation, or other combination or organization, or a partner of the partnership, or a manager or officer of the limited liability company, or any member of an organization seeking licensure under this chapter does not meet the qualifications required of an applicant other than those qualifications relating to knowledge and experience.

Cal. Business and Professions Code - BPC § 7071.3. Section 7071.3.

Notwithstanding any other provision of this code, the holder of a current valid license under this chapter who has entered or enters the armed forces of the United States may designate a responsible managing person or persons to act for him while in the armed forces and until one year after his discharge therefrom, after which time the authority to so act for the licensee shall terminate. The renewal fee shall be paid for any such licensee so designating others to act for him. Any license shall remain in full force and effect for 30 days after the entrance of the licensee into the armed forces, but he shall prior to the expiration of such 30-day period provide the registrar with the name or names of the persons so designated to conduct his business. The registrar may qualify such persons in any manner he may adopt. Persons so designated shall not have committed acts or crimes constituting grounds for denial of licensure under Section 480. Persons so designated committing any of the acts or crimes constituting grounds for denial of licensure under Section 480 shall be removed from the business of such licensee after a hearing as provided in this chapter.

Cal. Business and Professions Code - BPC § 7071.4. Section 7071.4.

(a) Each person licensed under the provisions of this chapter and subject to any of the bonding provisions of this article shall maintain the requisite bond as executed by an admitted surety insurer or as deposited with the registrar pursuant to paragraph (1) of subdivision (a) of Section 995.710 of the Code of Civil Procedure in the appropriate amount. Notwithstanding Article 7 (commencing with Section 995.710) of Chapter 2 of Title 14 of Part 2 of the Code of Civil Procedure, no other method of deposit, including, but not limited to, a certificate of deposit, shall satisfy a bond requirement under this article. (b) All existing alternatives in lieu of a bond currently filed with the registrar shall be replaced for a surety bond or the deposit prescribed by paragraph (1) of subdivision (a) of Section 995.710 of the Code of Civil Procedure by January 1, 2020. (c) (1) If the board is notified, in writing, of a civil action against the deposit authorized under this section, the deposit or any portion thereof shall not be released for any purpose, except as determined by the court. (2) If any deposit authorized under this section is insufficient to pay, in full, all claims that have been adjudicated under any action filed in accordance with this section, the amount of the deposit shall be distributed to all claimants in proportion to the amount of their respective claims. (d) Notwithstanding subdivision (a), this section shall not apply to the bond equivalents described in Section 7159.5 of this chapter. (e) (1) This section shall be operative on and after January 1, 2019, upon which date the registrar shall thereafter no longer accept alternatives in lieu of a bond, other than as provided in this section. (2) Notwithstanding any other law, in order to comply with the bonding provisions of this article, a person shall only be required to provide information consistent with the requirements for an applicant under Section 30. (f) All alternatives in lieu of a bond filed with the registrar before January 1, 2019, and any lawful money or cashier’s check deposited pursuant to paragraph (1) of subdivision (a) of Section 995.710 of the Code of Civil Procedure after January 1, 2019, shall be subject to the following limitations periods: (1) Any action, other than an action to recover wages or fringe benefits, against a deposit given in lieu of a contractor’s bond or bond of a qualifying individual filed by an active licensee shall be brought within three years after the expiration of the license period during which the act or omission occurred, or within three years of the date the license of the active licensee was inactivated, canceled, or revoked by the board, whichever occurs first. (2) Any action, other than an action to recover wages or fringe benefits, against a deposit given in lieu of a disciplinary bond filed by an active licensee pursuant to Section 7071.8 shall be brought within three years after the expiration of the license period during which the act or omission occurred, or within three years of the date the license of the active licensee was inactivated, canceled, or revoked by the board, or within three years after the last date for which a deposit given in lieu of a disciplinary bond filed pursuant to Section 7071.8 was required, whichever date is first. (3) A claim to recover wages or fringe benefits shall be brought within six months from the date that the wage or fringe benefit delinquencies were discovered, but in no event shall a civil action thereon be brought later than two years from the date the wage or fringe benefit contributions were due. (g) In any case in which a claim is filed against an alternative given in lieu of a bond filed with the registrar before January 1, 2019, or deposited with the registrar pursuant to subdivision (a), by any employee or by an employee organization on behalf of an employee, concerning wages or fringe benefits based upon the employee’s employment, claims for the nonpayment shall be filed with the Labor Commissioner. The Labor Commissioner shall, pursuant to the authority vested by Section 96.5 of the Labor Code, conduct hearings to determine whether or not the wages or fringe benefits should be paid to the complainant. Upon a finding by the commissioner that the wages or fringe benefits should be paid to the complainant, the commissioner shall notify the registrar of the findings. The registrar shall not make payment from the deposit on the basis of findings by the commissioner for a period of 10 days following determination of the findings. If, within the period, the complainant or the contractor files written notice with the registrar and the commissioner of an intention to seek judicial review of the findings pursuant to Section 11523 of the Government Code, the registrar shall not make payment if an action is actually filed, except as determined by the court. If, thereafter, no action is filed within 60 days following determination of findings by the commissioner, the registrar shall make payment from the deposit to the complainant. (h) Legal fees may not be charged by the board against any alternative given in lieu of a bond filed with the registrar before January 1, 2019, or deposited with the registrar pursuant to subdivision (a). In addition, the board shall not be liable for any legal fees or costs in any action, as described in subdivision (c), against any deposit authorized under this section, regardless of when it was filed with the registrar.

Cal. Business and Professions Code - BPC § 7071.5. Section 7071.5.

The contractor’s bond required by this article shall be executed by an admitted surety in favor of the State of California, in a form acceptable to the registrar and filed with the registrar by the licensee or applicant. The contractor’s bond shall be for the benefit of the following: (a) A homeowner contracting for home improvement upon the homeowner’s personal family residence damaged as a result of a violation of this chapter by the licensee. (b) A property owner contracting for the construction of a single-family dwelling who is damaged as a result of a violation of this chapter by the licensee. That property owner shall only recover under this subdivision if the single-family dwelling is not intended for sale or offered for sale at the time the damages were incurred. (c) A person damaged as a result of a willful and deliberate violation of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract. (d) An employee of the licensee damaged by the licensee’s failure to pay wages. (e) A person or entity, including a laborer described in subdivision (b) of Section 8024 of the Civil Code, to which a portion of the compensation of an employee of a licensee is paid by agreement with that employee or the collective bargaining agent of that employee, damaged as the result of the licensee’s failure to pay fringe benefits for its employees, including, but not limited to, employer payments described in Section 1773.1 of the Labor Code and regulations thereunder (without regard to whether the work was performed on a private or public work). Damage to a person or entity under this subdivision is limited to actual employer payments required to be made on behalf of employees of the licensee, as part of the overall compensation of those employees, which the licensee fails to pay.

Cal. Business and Professions Code - BPC § 7071.6. Section 7071.6.

(a) The board shall require as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, that the applicant or licensee file or have on file a contractor’s bond in the sum of twenty-five thousand dollars ($25,000). (b) Excluding the claims brought by the beneficiaries specified in subdivision (a) of Section 7071.5, the aggregate liability of a surety on claims brought against a bond required by this section shall not exceed the sum of seven thousand five hundred dollars ($7,500). The bond proceeds in excess of seven thousand five hundred dollars ($7,500) shall be reserved exclusively for the claims of the beneficiaries specified in subdivision (a) of Section 7071.5. However, nothing in this section shall be construed so as to prevent any beneficiary specified in subdivision (a) of Section 7071.5 from claiming or recovering the full measure of the bond required by this section. (c) A bond shall not be required of a holder of a license that has been inactivated on the official records of the board during the period the license is inactive. (d) Notwithstanding any other law, as a condition precedent to licensure, the board may require an applicant to post a contractor’s bond in twice the amount required pursuant to subdivision (a) until the time that the license is renewed, under the following conditions: (1) The applicant has either been convicted of a violation of Section 7028 or has been cited pursuant to Section 7028.7. (2) If the applicant has been cited pursuant to Section 7028.7, the citation has been reduced to a final order of the registrar. (3) The violation of Section 7028, or the basis for the citation issued pursuant to Section 7028.7, constituted a substantial injury to the public. (e) This section shall become operative on January 1, 2023.

Cal. Business and Professions Code - BPC § 7071.6.5. Section 7071.6.5.

(a) The board shall require, as a condition precedent to the issuance, reissuance, reinstatement, reactivation, renewal, or continued valid use of a limited liability company license, that the applicant or licensee file or have on file a surety bond in the sum of one hundred thousand dollars ($100,000). (b) The bond required by this section shall be executed by an admitted surety in favor of the State of California, in a form acceptable to the registrar and filed with the registrar, electronically or otherwise, by the applicant or licensee. (c) The bond required by this section shall be for the benefit of any employee damaged by his or her employer’s failure to pay wages, interest on wages, or fringe benefits and is intended to serve as an additional safeguard for workers employed by or contracted to work for a limited liability company. (d) If an applicant or licensee subject to subdivision (a) is also a party to a collective bargaining agreement, the bond required by this section shall also cover, in addition to the coverage described in subdivision (c), welfare fund contributions, pension fund contributions, and apprentice program contributions. (e) The bond required by this section shall not be applicable to a licensee whose license has been inactivated on the official records of the board during the period the license is inactive.

Cal. Business and Professions Code - BPC § 7071.7. Section 7071.7.

(a) Except as provided in subdivision (b), the registrar shall accept a bond required by Section 7071.6, 7071.6.5, 7071.8, or 7071.9 as of the effective date shown on the bond, if the bond is received by the registrar within 90 days after that date, and shall reinstate the license to which the bond pertains, if otherwise eligible, retroactive to the effective date of the bond. (b) Notwithstanding subdivision (a), the registrar shall accept a bond as of the effective date shown on the bond, even if the bond is not received by the registrar within 90 days after that date, upon a showing by the licensee, on a form acceptable to the registrar, that the failure to have a bond on file was due to circumstances beyond the control of the licensee. The registrar shall reinstate the license to which the bond pertains, if otherwise eligible, retroactive to the effective date of the bond.

Cal. Business and Professions Code - BPC § 7071.8. Section 7071.8.

(a) This section applies to an application for a license, for renewal or restoration of a license, an application to change officers or members of a corporation or a limited liability company, or for continued valid use of a license which has been disciplined, whether or not the disciplinary action has been stayed, made by any of the following persons or firms: (1) A person whose license has been suspended or revoked as a result of disciplinary action, or a person who was a qualifying individual for a licensee at any time during which cause for disciplinary action occurred resulting in suspension or revocation of the licensee’s license, whether or not the qualifying individual had knowledge or participated in the prohibited act or omission. (2) A person who was an officer, director, manager, partner, or member of the personnel of record of a licensee at any time during which cause for disciplinary action occurred resulting in suspension or revocation of the licensee’s license and who had knowledge of or participated in the act or omission which was the cause for the disciplinary action. (3) A partnership, corporation, limited liability company, firm, or association of which an existing or new officer, director, manager, partner, qualifying person, or member of the personnel of record has had a license suspended or revoked as a result of disciplinary action. (4) A partnership, corporation, limited liability company, firm, or association of which a member of the personnel of record, including, but not limited to, an officer, director, manager, partner, or qualifying person was, likewise, a manager, officer, director, or partner of a licensee at any time during which cause for disciplinary action occurred resulting in suspension or revocation of the license, and who had knowledge of or participated in the act or omission which was the cause for the disciplinary action. (b) The board shall require as a condition precedent to the issuance, reissuance, renewal, or restoration of a license to the applicant, or to the approval of an application to change officers of a corporation or a limited liability company, or removal of suspension, or to the continued valid use of a license which has been suspended or revoked, but which suspension or revocation has been stayed, that the applicant or licensee file or have on file a contractor’s bond in a sum to be fixed by the registrar based upon the seriousness of the violation, but which sum shall not be less than twenty-five thousand dollars ($25,000) nor more than 10 times that amount required by Section 7071.6. (c) The bond is in addition to, may not be combined with, and does not replace any other type of bond required by this chapter. The bond shall remain on file with the registrar for a period of at least two years and for any additional time that the registrar determines. The bond period shall run only while the license is current, active, and in good standing, and shall be extended until the license has been current, active, and in good standing for the required period. Each applicant or licensee shall be required to file only one disciplinary contractor’s bond of the type described in this section for each application or license subject to this bond requirement. (d) This section shall become operative on January 1, 2023.

Cal. Business and Professions Code - BPC § 7071.9. Section 7071.9.

(a) (1) If the qualifying individual, as referred to in Sections 7068 and 7068.1, is neither the proprietor, a general partner, nor a joint licensee, the qualifying individual shall file or have on file a qualifying individual’s bond as provided in Section 7071.10 in the sum of twenty-five thousand dollars ($25,000). This bond is in addition to, and shall not be combined with, any contractor’s bond required by Sections 7071.5 to 7071.8, inclusive, and is required for the issuance, reinstatement, reactivation, or continued valid use of a license. (2) This subdivision shall not apply to a federally recognized tribe or a participating tribe. (b) Excluding the claims brought by the beneficiaries specified in paragraph (1) of subdivision (a) of Section 7071.10, the aggregate liability of a surety on claims brought against the bond required by this section shall not exceed the sum of seven thousand five hundred dollars ($7,500). The bond proceeds in excess of seven thousand five hundred dollars ($7,500) shall be reserved exclusively for the claims of the beneficiaries specified in paragraph (1) of subdivision (a) of Section 7071.10. However, nothing in this section shall be construed to prevent any beneficiary specified in paragraph (1) of subdivision (a) of Section 7071.10 from claiming or recovering the full measure of the bond required by this section. This bond is in addition to, and shall not be combined with, any contractor’s bond required by Sections 7071.5 to 7071.8, inclusive, and is required for the issuance, reinstatement, reactivation, or continued valid use of a license. (c) The responsible managing officer of a corporation shall not be required to file or have on file a qualifying individual’s bond, if the responsible managing officer owns 10 percent or more of the voting stock of the corporation and certifies to that fact on a form prescribed by the registrar. (d) The qualifying individual for a limited liability company shall not be required to file or have on file a qualifying individual’s bond if the qualifying individual owns at least a 10-percent membership interest in the limited liability company and certifies to that fact on a form prescribed by the registrar.

Cal. Business and Professions Code - BPC § 7071.10. Section 7071.10.

The qualifying individual’s bond required by this article shall be executed by an admitted surety insurer in favor of the State of California, in a form acceptable to the registrar and filed with the registrar by the qualifying individual. The qualifying individual’s bond shall not be required in addition to the contractor’s bond when, as set forth under paragraph (1) of subdivision (b) of Section 7068, the individual proprietor has qualified for the license by his or her personal appearance, or the qualifier is a general partner as set forth under paragraph (2) of subdivision (b) of Section 7068. The qualifying individual’s bond shall be for the benefit of the following persons: (a) A homeowner contracting for home improvement upon the homeowner’s personal family residence damaged as a result of a violation of this chapter by the licensee. (b) A property owner contracting for the construction of a single-family dwelling who is damaged as a result of a violation of this chapter by the licensee. That property owner shall only recover under this subdivision if the single-family dwelling is not intended for sale or offered for sale at the time the damages were incurred. (c) A person damaged as a result of a willful and deliberate violation of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract. (d) An employee of the licensee damaged by the licensee’s failure to pay wages. (e) A person or entity, including a laborer described in subdivision (b) of Section 8024 of the Civil Code, to which a portion of the compensation of an employee of a licensee is paid by agreement with that employee or the collective bargaining agent of that employee, that is damaged as the result of the licensee’s failure to pay fringe benefits for its employees including, but not limited to, employer payments described in Section 1773.1 of the Labor Code and regulations adopted thereunder (without regard to whether the work was performed on a public or private work). Damage to a person or entity under this subdivision is limited to employer payments required to be made on behalf of employees of the licensee, as part of the overall compensation of those employees, which the licensee fails to pay.

Cal. Business and Professions Code - BPC § 7071.11. Section 7071.11.

(a) The aggregate liability of a surety on a claim for wages and fringe benefits brought against a bond required by this article, other than a bond required by Section 7071.8, shall not exceed the sum of four thousand dollars ($4,000). If a bond required by this article is insufficient to pay all claims in full, the sum of the bond shall be distributed to all claimants in proportion to the amount of their respective claims. (b) No license may be renewed, reissued, or reinstated while a judgment or admitted claim in excess of the amount of the bond remains unsatisfied. (c) Except for claims covered by subdivision (d), any action against a bond required under this article, excluding the judgment bond specified under Section 7071.17, shall be brought in accordance with the following: (1) Within two years after the expiration of the license period during which the act or omission occurred. The provisions of this paragraph shall be applicable only if the license has not been inactivated, canceled, or revoked during the license period for which the bond was posted and accepted by the registrar as specified under Section 7071.7. (2) If the license has been inactivated, canceled, or revoked, an action shall be brought within two years of the date the license of the active licensee would have expired had the license not been inactivated, canceled, or revoked. For the provisions of this paragraph to be applicable, the act or omission for which the action is filed must have occurred prior to the date the license was inactivated, canceled, or revoked. (3) An action against a disciplinary bond filed by an active licensee pursuant to Section 7071.8 shall be brought in accordance with the provisions of paragraph (1) or (2), as applicable, or within two years after the last date for which a disciplinary bond filed pursuant to Section 7071.8 was required, whichever date is first. (d) A claim to recover wages or fringe benefits shall be brought within six months from the date that the wage or fringe benefit delinquencies were discovered, but in no event shall a civil action thereon be brought later than two years from the date the wage or fringe benefit contributions were due. (e) Whenever the surety makes payment on a claim against a bond required by this article, whether or not payment is made through a court action or otherwise, the surety shall, within 30 days of the payment, provide notice to the registrar. The notice required by this subdivision shall provide the following information by declaration on a form prescribed by the registrar: (1) The name and license number of the contractor. (2) The surety bond number. (3) The amount of payment. (4) The statutory basis upon which the claim is made. (5) The names of the person or persons to whom payments have been made. (6) Whether or not the payments were the result of a good faith action by the surety. The notice shall also clearly indicate whether or not the licensee filed a protest in accordance with this section. (f) Prior to the settlement of a claim through a good faith payment by the surety, a licensee shall have not less than 15 days in which to provide a written protest. This protest shall instruct the surety not to make payment from the bond on the licensee’s account upon the specific grounds that the claim is opposed by the licensee, and provide the surety a specific and reasonable basis for the licensee’s opposition to payment. (1) Whenever a licensee files a protest in accordance with this subdivision, the board shall investigate the matter and file disciplinary action as set forth under this chapter if there is evidence that the surety has sustained a loss as the result of a good faith payment made for the purpose of mitigating any damages incurred by any person or entity covered under Section 7071.5. (2) A licensee that fails to file a protest as specified in this subdivision shall have 90 days from the date of notification by the board to submit proof of payment of the actual amount owed to the surety and, if applicable, proof of payment of any judgment or admitted claim in excess of the amount of the bond or, by operation of law, the license shall be suspended at the end of the 90 days. A license suspension pursuant to this subdivision shall be disclosed indefinitely as a failure to settle outstanding final liabilities in violation of this chapter. The disclosure specified by this subdivision shall also be applicable to all licenses covered by the provisions of subdivision (g). (g) During any period in which a surety remains unreimbursed for a loss or expense sustained on a bond issued pursuant to this article, the license for which the bond was issued, and any other license on which any member of the licensee’s personnel of record has also been listed, may not be renewed, reissued, or reinstated while the licensee was subject to suspension or disciplinary action under this section. (h) The licensee may provide the board with a notarized copy of an accord, reached with the surety to satisfy the debt in lieu of full payment. By operation of law, failure to abide by the accord shall result in the automatic suspension of a license to which this section applies. A license that is suspended for failure to abide by the accord may only be renewed or reinstated when proof of satisfaction of all debts is made. (i) Legal fees may not be charged against the bond by the board.

Cal. Business and Professions Code - BPC § 7071.13. Section 7071.13.

Any reference by a contractor in his advertising, soliciting, or other presentments to the public to any bond required to be filed pursuant to this chapter is a ground for the suspension of the license of such contractor.

Cal. Business and Professions Code - BPC § 7071.14. Section 7071.14.

No licensee or applicant for a license under this chapter shall be denied a contractor’s license bond solely because of his race, religious creed, color, national origin, ancestry, or sex. Whoever denies a contractor’s license bond solely on the grounds specified herein is liable for each and every such offense for the actual damages, and two hundred fifty dollars ($250) in addition thereto, suffered by the licensee or applicant for a license.

Cal. Business and Professions Code - BPC § 7071.15. Section 7071.15.

If a licensee fails to maintain a sufficient bond required by this article, the license is subject to suspension or revocation pursuant to Section 996.020 of the Code of Civil Procedure.

Cal. Business and Professions Code - BPC § 7071.17. Section 7071.17.

(a) Notwithstanding any other provision of law, the board shall require, as a condition precedent to accepting an application for licensure, renewal, reinstatement, or to change officers or other personnel of record, that an applicant, previously found to have failed or refused to pay a contractor, subcontractor, consumer, materials supplier, or employee based on an unsatisfied final judgment, file or have on file with the board a bond sufficient to guarantee payment of an amount equal to the unsatisfied final judgment or judgments. The applicant shall have 90 days from the date of notification by the board to file the bond or the application shall become void and the applicant shall reapply for issuance, reinstatement, or reactivation of a license. The board may not issue, reinstate, or reactivate a license until the bond is filed with the board. The bond required by this section is in addition to the contractor’s bond. The bond shall be on file for a minimum of one year, after which the bond may be removed by submitting proof of satisfaction of all debts. The applicant may provide the board with a notarized copy of any accord, reached with any individual holding an unsatisfied final judgment, to satisfy a debt in lieu of filing the bond. The board shall include on the license application for issuance, reinstatement, or reactivation, a statement, to be made under penalty of perjury, as to whether there are any unsatisfied judgments against the applicant on behalf of contractors, subcontractors, consumers, materials suppliers, or the applicant’s employees. Notwithstanding any other provision of law, if it is found that the applicant falsified the statement then the license will be retroactively suspended to the date of issuance and the license will stay suspended until the bond, satisfaction of judgment, or notarized copy of any accord applicable under this section is filed. (b) (1) Notwithstanding any other provision of law, all licensees shall notify the registrar in writing of any unsatisfied final judgment imposed on the licensee. If the licensee fails to notify the registrar in writing within 90 days, the license shall be automatically suspended on the date that the registrar is informed, or is made aware of the unsatisfied final judgment. (2) The suspension shall not be removed until proof of satisfaction of the judgment, or in lieu thereof, a notarized copy of an accord is submitted to the registrar. (3) If the licensee notifies the registrar in writing within 90 days of the imposition of any unsatisfied final judgment, the licensee shall, as a condition to the continual maintenance of the license, file or have on file with the board a bond sufficient to guarantee payment of an amount equal to all unsatisfied judgments applicable under this section. (4) The licensee has 90 days from the date of notification by the board to file the bond or at the end of the 90 days the license shall be automatically suspended. In lieu of filing the bond required by this section, the licensee may provide the board with a notarized copy of any accord reached with any individual holding an unsatisfied final judgment. (c) By operation of law, failure to maintain the bond or failure to abide by the accord shall result in the automatic suspension of any license to which this section applies. (d) A license that is suspended for failure to comply with the provisions of this section can only be reinstated when proof of satisfaction of all debts is made, or when a notarized copy of an accord has been filed as set forth under this section. (e) This section applies only with respect to an unsatisfied final judgment that is substantially related to the construction activities of a licensee licensed under this chapter, or to the qualifications, functions, or duties of the license. (f) Except as otherwise provided, this section does not apply to an applicant or licensee when the financial obligation covered by this section has been discharged in a bankruptcy proceeding. (g) Except as otherwise provided, the bond shall remain in full force in the amount posted until the entire debt is satisfied. If, at the time of renewal, the licensee submits proof of partial satisfaction of the financial obligations covered by this section, the board may authorize the bond to be reduced to the amount of the unsatisfied portion of the outstanding judgment. When the licensee submits proof of satisfaction of all debts, the bond requirement may be removed. (h) The board shall take the actions required by this section upon notification by any party having knowledge of the outstanding judgment upon a showing of proof of the judgment. (i) For the purposes of this section, the term “judgment” also includes any final arbitration award where the time to file a petition for a trial de novo or a petition to vacate or correct the arbitration award has expired, and no petition is pending. (j) (1) If a judgment is entered against a licensee or any personnel of record of a licensee, then a qualifying person or personnel of record of the licensee at the time of the activities on which the judgment is based shall be automatically prohibited from serving as a qualifying individual or other personnel of record on any license until the judgment is satisfied. (2) The prohibition described in paragraph (1) shall cause the license of any other existing renewable licensed entity with any of the same personnel of record as the judgment debtor licensee or with any of the same judgment debtor personnel to be suspended until the license of the judgment debtor is reinstated, the judgment is satisfied, or until those same personnel of record disassociate themselves from the renewable licensed entity. (k) For purposes of this section, lawful money or cashier’s check deposited pursuant to paragraph (1) of subdivision (a) of Section 995.710 of the Code of Civil Procedure, may be submitted in lieu of the bond. (l) Notwithstanding subdivision (f), the failure of a licensee to notify the registrar of an unsatisfied final judgment in accordance with this section is cause for disciplinary action.

Cal. Business and Professions Code - BPC § 7071.18. Section 7071.18.

(a) Notwithstanding any other law, a licensee shall report to the registrar in writing the occurrence of any of the following within 90 days after the licensee obtains knowledge of the event: (1) The conviction of the licensee for any felony. (2) The conviction of the licensee for any other crime that is substantially related to the qualifications, functions, and duties of a licensed contractor. (b) (1) The board shall consult with licensees, consumers, and other interested stakeholders in order to prepare a study of judgments, arbitration awards, and settlements that were the result of claims for construction defects for rental residential units and, by January 1, 2018, shall report to the Legislature the results of this study to determine if the board’s ability to protect the public as described in Section 7000.6 would be enhanced by regulations requiring licensees to report judgments, arbitration awards, or settlement payments of those claims. Participation by licensees and consumers shall be voluntary. The study shall include, but not be limited to, criteria used by insurers or others to differentiate between settlements that are for nuisance value and those that are not, whether settlement information or other information can help identify licensees who may be subject to an enforcement action, if there is a way to separate subcontractors from general contractors when identifying licensees who may be subject to an enforcement action, whether reporting should be limited to settlements resulting from construction defects that resulted in death or injury, the practice of other boards within the department, and any other criteria considered reasonable by the board. The board shall submit the report to the Legislature in accordance with Section 9795 of the Government Code. (2) Records or documents obtained by the board during the course of implementing this subdivision that are exempt from public disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) shall remain exempt from disclosure pursuant to that act.

Cal. Business and Professions Code - BPC § 7071.19. Section 7071.19.

(a) As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, in addition to any bond required under this article, a limited liability company shall, in accordance with this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the contracting services it provides. (b) The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows: (1) For a limited liability company licensee with five or fewer persons listed on the members of the personnel of record, the aggregate limit shall not be less than one million dollars ($1,000,000). (2) For a limited liability company licensee with more than five persons listed on the members of the personnel of record, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person listed on the personnel of record of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section. (c) The policy or policies required by this section may be issued on a claims-made or occurrence basis, and shall cover: (1) in the case of a claims-made policy, claims initially asserted in the designated period, and (2) in the case of an occurrence policy, occurrences during the designated period. For purposes of this section, “designated period” means a policy year or any other period designated in the policy that is not greater than 12 months. Any policy or policies secured to satisfy the requirements of this section shall be written by an insurer or insurers duly licensed by this state or an eligible surplus line insurer, with the insurance procured pursuant to Section 1765.1 of the Insurance Code, and may be in a form reasonably available in the commercial insurance market and may be subject to those terms, conditions, exclusions, and endorsements that are typically contained in those policies. A policy or policies of insurance maintained pursuant to this section may be subject to a deductible or self-insured retention. (d) The impairment or exhaustion of the aggregate limit of liability by amounts paid under any policy in connection with the settlement, discharge, or defense of claims applicable to a designated period shall not require the licensee to acquire additional insurance coverage for that designated period. However, the aggregate limit of liability coverage (coverage limit) required by this section shall be reinstated by not later than the commencement date of the next designated period, and the license of any licensee that fails to comply with this provision shall be suspended by operation of law until the date that the licensee complies with the coverage limit requirements of this section. In addition, the amount to which any coverage limit is depleted may be reported on the license record. (e) Upon the dissolution and winding up of the company, the company shall, with respect to any insurance policy or policies then maintained pursuant to this section, maintain or obtain an extended reporting period endorsement or equivalent provision in the maximum total aggregate limit of liability required to comply with this section for a minimum of three years if reasonably available from the insurer. (f) Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the registrar, submit the information and documentation required by this section and requested by the registrar, demonstrating compliance with the financial security requirements specified by this section. (g) For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the registrar. The insurer issuing the certificate, or, in the case of a surplus line policy, the surplus line broker, shall report to the registrar the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, the date and amount of any payment of claims, and cancellation date if applicable. (h) Upon the issuance, reinstatement, or reactivation of a license under this section, the registrar may post the following information to the licensee’s license record on the Internet: (1) The name of the insurer or insurers providing the liability policy or policies submitted by the licensee for the most recent designated period. (2) Any policy numbers and the sum of the aggregate limit of liability provided by each.

Cal. Business and Professions Code - BPC § 7071.20. Section 7071.20.

(a) A licensee shall report to the registrar in writing within 90 days after the licensee has knowledge of any civil action resulting in a final judgment, executed settlement agreement, or final arbitration award in which the licensee is named as a defendant or cross-defendant, filed on or after January 1, 2019, that meets all of the following criteria: (1) The action alleges fraud, deceit, negligence, breach of contract or express or implied warranty, misrepresentation, incompetence, recklessness, wrongful death, or strict liability by the act or omission of a licensee while acting in the capacity of a contractor, whether as a general contractor or as a specialty contractor. (2) The amount or value of the judgment, settlement payment, or arbitration award for which the licensee is named as a defendant or cross-defendant, is one million dollars ($1,000,000) or greater, not including investigative costs or prior repairs performed by the licensee. (3) The action is the result of a claim for damages to a property or person that allegedly resulted in a failure or condition that creates a substantial risk of a failure in the load bearing portions of a multifamily rental residential structure. (4) The action is the result of a claim for damages to a property or person that was allegedly caused by a licensee’s construction, repair, alteration to, subtraction from, improvement of, moving, wrecking, or demolishing of, any part of a multifamily rental residential structure, either personally or by or through others. (5) The action, if a civil action, has been designated by a court of competent jurisdiction as a “complex case” pursuant to rules 3.400 to 3.403, inclusive, of the California Rules of Court because it involves a claim of construction defect or insurance coverage arising out of a construction defect claim, pursuant to paragraph (2) or (7) of subdivision (c) of Rule 3.400 of the California Rules of Court. (b) This section shall not apply to residential construction subject to any part of Title 7 (commencing with Section 895) of Part 2 of Division 2 of the Civil Code. (c) In an action that meets the criteria of this section, in which more than one contractor is named as a defendant or cross-defendant, all contractors who are apportioned any liability either by the court or pursuant to an agreement between parties, shall report the action pursuant to subdivision (a). This subdivision does not apply to a contractor who is named as a defendant or cross-defendant, but is assigned liability of less than fifteen thousand dollars ($15,000) in the action. (d) The reports required by this section shall be signed by the licensee and shall set forth the license number of the licensee and the facts that constitute the reportable event. If the reportable event involves the action of a court, the report shall also set forth the following: (1) The title of the matter. (2) The court or agency name. (3) The docket number. (4) The claim or file number. (5) The date on which the reportable event occurred. (e) (1) The registrar or a designee shall review the reports required by this section. The registrar or designee shall return the report to the licensee and take no further action if, upon review, the registrar or a designee finds any of the following: (A) The facts of the reportable event would not substantiate an allegation that a licensee has violated this chapter. (B) There are reasonable grounds to believe that the public interest is sufficiently served by the existing resolution or disposition of the reportable event as reached by the parties to the action or by the court. (C) Disciplinary action is unnecessary. (2) Any report returned to a licensee pursuant to this subdivision shall be deemed to be a complaint resolved in favor of the licensee and the facts underlying the event as reported by the licensee shall not be subject to further review by the board, except upon receipt of an independent complaint involving the same underlying facts. (3) If additional information is necessary to make the determination required by paragraph (1), the registrar or designee shall keep and regard the report as a complaint that shall be subject to Sections 7090 and 7091. The disclosure of any complaint referred to investigation pursuant to this section shall comply with the public disclosure provisions of Section 7124.6. (f) Failure of a licensee to report to the registrar in the time and manner required by this section shall be grounds for disciplinary action. Criminal penalties shall not be imposed for a violation of this section. (g) Except as provided in paragraphs (1) and (2) of subdivision (e), nothing in this section is intended to limit the registrar’s authority on his or her motion, or upon the verified written complaint of another, to investigate the actions of a contractor as specified in Section 7090.

Cal. Business and Professions Code - BPC § 7071.21. Section 7071.21.

(a) An insurer providing a licensee commercial general liability insurance, construction defect insurance, or professional liability insurance shall report to the registrar within 30 days of all or a portion of the insurer’s payment of a civil action judgment, settlement payment, or arbitration award, that meets all of the requirements of Section 7071.20, against the licensee all of the following: (1) The name and license number of the licensee. (2) The claim or file number. (3) The amount or value of the judgment, settlement payment, or arbitration award. (4) The amount paid by the insurer. (5) The identity of the payee. (b) (1) The registrar or a designee shall review the reports required by this section. The registrar or designee shall return the report to the licensee and take no further action if, upon review, the registrar or a designee finds any of the following: (A) The facts of the reportable event would not substantiate an allegation that a licensee has violated this chapter. (B) There are reasonable grounds to believe that the public interest is sufficiently served by the existing resolution or disposition of the reportable event as reached by the parties to the action or by the court. (C) Disciplinary action is unnecessary. (2) Any report returned to a licensee pursuant to this subdivision shall be deemed to be a complaint resolved in favor of the licensee and the facts underlying the event as reported by the licensee shall not be subject to further review by the board, except upon receipt of an independent complaint involving the same underlying facts. (3) If additional information is necessary to make the determination required by paragraph (1), the registrar or designee shall keep and regard the report as a complaint that shall be subject to Sections 7090 and 7091. The disclosure of any complaint referred to investigation pursuant to this section shall comply with the public disclosure provisions of Section 7124.6. (c) Except as provided in paragraphs (1) and (2) of subdivision (b), nothing in this section is intended to limit the registrar’s authority on his or her motion, or upon the verified written complaint of another, to investigate the actions of a contractor as specified in Section 7090.

Cal. Business and Professions Code - BPC § 7071.22. Section 7071.22.

(a) Sections 7071.20 and 7071.21 shall apply if a party to the civil action, judgment, settlement payment, or arbitration award is or was a licensee, as defined in Section 7096, or was a member of the personnel of the record, a person, or a qualifying person, as those terms are defined in Section 7025. (b) Notwithstanding any other law, a licensee or person providing a report to the registrar pursuant to Section 7071.20 or 7071.21 shall not be considered to have violated a confidential settlement agreement or other confidential agreement. (c) The board may adopt regulations to further the purposes of Sections 7071.20 and 7071.21, specifically with regard to the reporting requirements of those sections.

Cal. Business and Professions Code - BPC § 7072. Section 7072.

Following receipt of the application fee and an application furnishing complete information in the manner required by the registrar, and after such examination and investigation as he may require, the registrar, within 15 days after approval of the application, shall notify the applicant that a license may be issued to him on payment of the initial license fee provided in Article 8 (commencing at Section 7135), and, when the initial license fee is paid, shall issue a license to him permitting him to engage in business as a contractor under the terms of this chapter.

Cal. Business and Professions Code - BPC § 7072.5. Section 7072.5.

(a) Upon the issuance of a license, a plasticized pocket card of a size, design, and content as may be determined by the registrar shall be issued at no cost to each licensee, or to the partners, managers, officers, or responsible managing officers of licensees licensed as other than individuals, which card shall be evidence that the licensee is duly licensed pursuant to this chapter. All cards issued shall be surrendered upon the suspension, revocation, or denial of renewal of the license, and shall be mailed or delivered to the board within five days of the suspension, revocation, or denial. (b) When a person to whom a card is issued terminates his or her position, office, or association with a licensee that is licensed as other than an individual, that person shall surrender his or her card to the licensee and within five days thereafter the card shall be mailed or delivered by the licensee to the board for cancellation.

Cal. Business and Professions Code - BPC § 7073. Section 7073.

(a) The registrar may deny any application for a license or supplemental classification where the applicant has failed to comply with any rule or regulation adopted pursuant to this chapter or where there are grounds for denial under Section 480. Procedures for denial of an application shall be conducted in accordance with Section 485. (b) When the board has denied an application for a license on grounds that the applicant has committed a crime substantially related to qualifications, functions, or duties of a contractor, it shall, in its decision or in its notice under subdivision (b) of Section 485, inform the applicant of the earliest date on which the applicant may reapply for a license. The board shall develop criteria, similar to the criteria developed to evaluate rehabilitation, to establish the earliest date on which the applicant may reapply. The date set by the registrar shall not be more than five years from the effective date of the decision or service of notice under subdivision (b) of Section 485. (c) The board shall inform an applicant that all competent evidence of rehabilitation shall be considered upon reapplication. (d) Along with the decision or notice under subdivision (b) of Section 485, the board shall serve a copy of the criteria for rehabilitation formulated under Section 482. (e) In lieu of denying licensure as authorized under this section, the registrar may issue an applicant a probationary license with terms and conditions. During the probationary period, if information is brought to the attention of the registrar regarding any act or omission of the licensee constituting grounds for discipline or denial of licensure for which the registrar determines that revocation of the probationary license would be proper, the registrar shall notify the applicant to show cause within 30 days why the probationary license should not be revoked. The proceedings shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the registrar shall have all the powers granted therein. A probationary license shall not be renewed during any period in which any proceeding brought pursuant to this section is pending.

Cal. Business and Professions Code - BPC § 7074. Section 7074.

(a) Except as otherwise provided by this section, an application for an original license, for an additional classification, or for a change of qualifier shall become void when: (1) The applicant or the examinee for the applicant has failed to achieve a passing grade in the qualifying examination within 18 months after the application has been deemed acceptable by the board. (2) The applicant for an original license, after having been notified to do so, fails to pay the initial license fee within 90 days from the date of the notice. (3) The applicant, after having been notified to do so, fails to file within 90 days from the date of the notice any bond or lawful money or cashier’s check deposited pursuant to paragraph (1) of subdivision (a) of Section 995.710 of the Code of Civil Procedure or other documents that may be required for issuance or granting pursuant to this chapter. (4) After filing, the applicant withdraws the application. (5) The applicant fails to return the application rejected by the board for insufficiency or incompleteness within 90 days from the date of original notice or rejection. (6) The application is denied after disciplinary proceedings conducted in accordance with the provisions of this code. (b) The void date on an application may be extended up to 90 days or one examination may be rescheduled without a fee upon documented evidence by the applicant that the failure to complete the application process or to appear for an examination was due to a medical emergency or other circumstance beyond the control of the applicant. (c) An application voided pursuant to this section shall remain in the possession of the registrar for the period as he or she deems necessary and shall not be returned to the applicant. Any reapplication for a license shall be accompanied by the fee fixed by this chapter.

Cal. Business and Professions Code - BPC § 7075. Section 7075.

The license shall be displayed in the licensee’s main office or chief place of business. Satisfactory evidence of the possession of a license and the current renewal thereof shall be provided by the licensee upon demand.

Cal. Business and Professions Code - BPC § 7075.1. Section 7075.1.

(a) No license, regardless of type or classification, shall be transferable to any other person or entity under any circumstances. (b) A license number may be reissued after cancellation, revocation, suspension, or expiration beyond the renewal period specified in Section 7141, only under the following circumstances: (1) To an individual upon application. (2) To a partnership upon application if there is no change in the partners or partnership structure. (3) To a corporation upon application if there is no change in the status of the corporation as registered with the Secretary of State. (4) To a limited liability company upon application if there is no change in the status of the company as registered with the Secretary of State. (c) A license number may be reissued or reassigned to a different entity only under the following conditions: (1) To a corporation when the parent corporation has merged or created a subsidiary, the subsidiary has merged into the parent corporation, or the corporation has changed its filing status with the Secretary of State from a domestic corporation to a foreign corporation or from a foreign corporation to a domestic corporation, and the new entity is being formed to continue the business of the formerly licensed corporation. (2) To a limited liability company when the parent limited liability company has merged or created a subsidiary, the subsidiary has merged into the parent limited liability company, or the limited liability company has changed its filing status with the Secretary of State from a domestic limited liability company to a foreign limited liability company or from a foreign limited liability company to a domestic limited liability company, and the new entity is being formed to continue the business of the formerly licensed limited liability company. (3) To an individual when the individual is an immediate family member of a licensed individual who is deceased or absent and the license is required to continue an existing family contracting business. (4) To a corporation or limited liability company when created by immediate members of an individual licensee’s family to continue an existing deceased or absent individual licensee’s contracting business. (5) To a corporation or limited liability company when the corporation or limited liability company is formed by an individual licensee and the individual licensee maintains ownership directly or indirectly of shares or membership interests evidencing more than 50 percent of the voting power. (6) To a limited liability company that is formed by a corporation to continue the business of the corporation subsequent to the cancellation of the corporate entity’s license, provided the personnel listed for each entity are the same. (d) For purposes of this section, an immediate family member of a deceased or absent licensed individual is either a spouse, father, mother, brother, sister, son, daughter, stepson, stepdaughter, grandson, granddaughter, son-in-law, or daughter-in-law.

Cal. Business and Professions Code - BPC § 7076. Section 7076.

(a) An individual license shall be canceled upon the death of a person licensed as an individual. An immediate member of the family of the deceased licensee may request a continuance of the license to complete projects in progress and undertake new work for a reasonable amount of time to be determined by rules of the board. The request for a continuance must be made in writing and received at the board’s headquarters office within 90 days after the death. Approval of the continuance of an individual license may be contingent upon meeting the bond requirements of Sections 7071.5 and 7071.6 within 90 days of notification by the board of that requirement. The immediate member of the family must apply for and obtain his or her own license to continue contracting after the continuance expires. (b) A partnership license shall be canceled upon the death of a general partner. The remaining partner or partners shall notify the registrar in writing within 90 days of the death of a general partner. Failure to notify the registrar within 90 days of the death is grounds for disciplinary action. The remaining general partner or partners may request a continuance of the license to complete projects in progress and undertake new work for a reasonable amount of time to be determined by rules of the board. The request for a continuance must be made in writing and received at the board’s headquarters office within 90 days after the death. The remaining general partner or partners must apply for and obtain a new license to continue contracting after the continuance expires. (c) A partnership license shall be canceled upon the disassociation of a general partner or upon the dissolution of the partnership. The disassociating partner or the remaining partner or partners shall notify the registrar in writing within 90 days of the disassociation of a general partner or dissolution of the partnership. Failure to notify the registrar of the disassociation or dissolution within 90 days shall cause the license to be canceled effective the date the written notification is received at the board’s headquarters office. Failure to notify the registrar within 90 days of the disassociation or dissolution is grounds for disciplinary action. The remaining general partner or partners may request a continuance of the license to complete projects contracted for or in progress prior to the date of disassociation or dissolution for a reasonable length of time to be determined by rules of the board. The request for a continuance must be made in writing and received at the board’s headquarters office within 90 days after the disassociation or dissolution. The remaining general partner or partners must apply for and obtain a new license to undertake new work and to continue contracting after the continuance expires. (d) The general partner or partners shall notify the registrar in writing within 90 days of the death of a limited partner. Failure to notify the registrar within 90 days of the death is grounds for disciplinary action. The death of a limited partner will not affect the partnership license unless the partnership license has only one limited partner. In this case, the license will be canceled upon the death of the limited partner unless a new limited partner is added to the license within 90 days of the death. If the license is canceled, the remaining general partner or partners may request a continuance of the license to complete projects in progress and to undertake new work for a reasonable amount of time to be determined by rules of the board. The request for a continuance must be made in writing and received at the board’s headquarters office within 90 days after the death. The remaining general partner or partners must apply for and obtain a new license to continue contracting after the continuance expires. (e) The general partner or partners shall notify the registrar in writing within 90 days of the disassociation of a limited partner. Failure to notify the registrar of the disassociation, within 90 days, shall cause the disassociation to be effective the date the written notification is received at the board’s headquarters office. Failure to notify the registrar within 90 days of the disassociation is grounds for disciplinary action. The disassociation of a limited partner will not affect the partnership license unless the partnership license has only one limited partner. In this case, the license will be canceled upon the disassociation of the limited partner unless a new limited partner is added to the license within 90 days of the disassociation. If the license is canceled, the remaining general partner or partners may request a continuance of the license to complete projects contracted for or in progress prior to the date of disassociation for a reasonable amount of time to be determined by rules of the board. The request for a continuance must be made in writing and received at the board’s headquarters office within 90 days after the disassociation. The remaining general partner or partners must apply for and obtain a new license to undertake new work and to continue contracting after the continuance expires. (f) A joint venture license shall be canceled upon the cancellation, revocation, or disassociation of any of its entity licenses or upon the dissolution of the joint venture. The registrar shall be notified in writing within 90 days of the disassociation of a joint venture entity or dissolution of the joint venture. Failure to notify the registrar of the disassociation or dissolution within 90 days shall cause the license to be canceled effective the date the written notification is received at the board’s headquarters office. Failure to notify the registrar within 90 days of the disassociation or dissolution is grounds for disciplinary action. Any remaining entity or entities may request a continuance of the license to complete projects contracted for or in progress prior to the date of disassociation or dissolution for a reasonable amount of time to be determined by rules of the board. The request for a continuance must be made in writing and received at the board’s headquarters office within 90 days of the disassociation or dissolution. The remaining entity or entities must apply for and obtain a new license to undertake new work and to continue contracting after the continuance expires. (g) Any individual, partnership, or joint venture license continued in accordance with this section is subject to all other provisions of this chapter. (h) A corporation license shall be canceled upon the corporation’s dissolution, merger, or surrender of its right to do business in this state. The corporation or participating tribe shall notify the registrar in writing within 90 days of the dissolution, merger, or surrender. Failure to notify the registrar of the dissolution, merger, or surrender within 90 days shall cause the license to be canceled effective the date written notification is received at the board’s headquarters office. If the corporation or participating tribe fails to notify the board of the dissolution, merger, or surrender, the corporation license shall be canceled 60 days after the board’s discovery when researching the relevant corporate records. Failure to notify the registrar within 90 days of the dissolution, merger, or surrender is grounds for disciplinary action. (i) A limited liability company license shall be canceled upon the company’s dissolution, merger, or surrender of its right to do business in this state. The limited liability company shall notify the registrar in writing within 90 days of the dissolution, merger, or surrender. Failure to notify the registrar of the dissolution, merger, or surrender within 90 days shall cause the license to be canceled effective the date written notification is received at the board’s headquarters office. If the limited liability company fails to notify the board of the dissolution, merger, or surrender, the limited liability company license shall be canceled 60 days after the board’s discovery when researching the records of the Secretary of State. Failure to notify the registrar within 90 days of the dissolution, merger, or surrender is grounds for disciplinary action. (j) The registrar shall review and accept the petition of a licensee who disputes the date of cancellation upon a showing of good cause. This petition shall be received within 90 days of the board’s official notice of cancellation.

Cal. Business and Professions Code - BPC § 7076.1. Section 7076.1.

Upon the voluntary surrender of a license by a licensee, the registrar shall order the license canceled. Cancellation will be effected upon receipt of the request by the registrar. No refund will be made of any fee which a licensee may have paid prior to the surrender of the license. To reinstate a canceled license the licensee must pay all of the fees and meet all of the qualifications and requirements set forth in this chapter for obtaining an original license.

Cal. Business and Professions Code - BPC § 7076.2. Section 7076.2.

(a) Notwithstanding any other provision of law, the failure of a contractor licensed to do business as a corporation or limited liability company in this state to be registered and in good standing with the Secretary of State after notice from the registrar shall result in the automatic suspension of the license by operation of law. The registrar shall notify the licensee in writing of its failure to be registered and in good standing with the Secretary of State and that the licensee shall be suspended 30 days from the date of the notice if the licensee does not provide proof satisfactory to the registrar that it is properly registered and in good standing with the Secretary of State. Reinstatement may be made at any time following the suspension by providing proof satisfactory to the registrar that the license is properly registered and in good standing. (b) Where the license of a limited liability company is suspended pursuant to subdivision (a), each person within the company identified in Section 7028.5 shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the company’s performance, during the period of suspension, of any act or contract where a license is required by this chapter. This personal liability shall not apply where there has been substantial compliance with the licensure requirements, as described in subdivision (e) of Section 7031. (c) This section shall not apply to a federally recognized tribe or a participating tribe.

Cal. Business and Professions Code - BPC § 7076.5. Section 7076.5.

(a) A contractor may inactivate their license by submitting a form prescribed by the registrar accompanied by the current active license certificate. When the current license certificate has been lost, the licensee shall pay the fee prescribed by law to replace the license certificate. Upon receipt of an acceptable application to inactivate, the registrar shall issue an inactive license certificate to the contractor. The holder of an inactive license shall not be entitled to practice as a contractor until their license is reactivated. (b) Any licensed contractor who is not engaged in work or activities which require a contractor’s license may apply for an inactive license. (c) Inactive licenses shall be valid for a period of four years from their due date. (d) During the period that an existing license is inactive, no bonding requirement pursuant to Section 7071.6, 7071.8, or 7071.9, qualifier requirement pursuant to Section 7068, or workers’ compensation requirements pursuant to Section 7125 shall apply. An applicant for licensure having met the qualifications for issuance may request that the license be issued inactive unless the applicant is subject to the provisions of Section 7071.8. (e) The board shall not refund any of the renewal fee which a licensee may have paid prior to the inactivation of their license. (f) An inactive license shall be renewed on each established renewal date by submitting the renewal application and paying the inactive renewal fee. (g) An inactive license may be reactivated by submitting an application acceptable to the registrar, by paying the full renewal fee for an active license and by fulfilling all other requirements of this chapter. No examination shall be required to reactivate an inactive license. (h) The inactive status of a license shall not bar any disciplinary action by the board against a licensee for any of the causes stated in this chapter.

Cal. Business and Professions Code - BPC § 7077. Section 7077.

Every original license, except an additional classification issued pursuant to Section 7059, shall be a probationary license until such time as the license is renewed. If information is brought to the attention of the registrar, during such probationary period, regarding any act or omission of the licensee constituting grounds for denial, revocation, or suspension of an application or license, such that, in the registrar’s discretion, it would be proper to revoke the probationary license, the registrar shall forthwith notify the applicant to show cause within not more than 30 days, why the probationary license should not be revoked. The proceedings shall be conducted in accordance with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the registrar shall have all the powers granted therein. A probationary license shall not be renewed during the pendency of any proceedings brought pursuant to this section.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026