Contractors’ State License Board Commences Formal Rulemaking Process to Implement AB 2138 (Chiu) to Establish Substantial Relationship Criteria for Criminal Convictions and to Evaluate Rehabilitation of Applicants and Licensees


By Mariela Romo

On March 2, 2020, the Contractors’ State License Board (CSLB) published notice of its intent to adopt section 868.1, repeal section 869.5, and amend sections 868, 869, 869.9, Title 16 of the California Code of Regulations (CCR) to specify the criteria related to criminal background reviews, which are set forth in the proposed language.

According to the Initial Statement of Reasons (ISOR), the proposed regulations are the Board’s efforts to comply with AB 2138 (Chiu) (Chapter 995, Statutes of 2018), which goes into effect on July 1, 2020. Specifically, AB 2138 mandates that CSLB develop criteria through the rulemaking process to aid it, when considering the denial, suspension, or revocation of a license, to determine whether a crime is substantially related to the qualifications, functions, or duties of a contractor licensee.  AB 2138 also prohibits the Board from denying a license on the basis that an applicant was convicted of a crime if the applicant made a showing of rehabilitation.  As the ISOR points out, the bill was enacted to reduce licensing and employment barriers for people who are rehabilitated.

CSLB’s proposed amendments adopt “substantial relationship” criteria for determining whether a prior crime is related to the license consistent with section 481 of the Business and Professions Code; expand current regulations to include substantially-related acts that are the basis for discipline in another jurisdiction; create criteria to determine if a financial crime is directly and adversely related to fiduciary qualifications, functions, or duties of the profession; update regulations to more accurately reflect the Board’s authority to evaluate rehabilitation evidence; and establish criteria for determining the earliest date a denied applicant may reapply for a license.

The ISOR notes that this regulatory proposal is needed because

without the proposed language, there could be confusion about the criteria CSLB uses for determining: (1) whether a crime, act, or professional misconduct is substantially related to the license or registration at issue; (2) whether a felony financial crime is considered directly or adversely related to the contracting or home improvement salesperson profession; (3) whether the applicant or licensee has made a showing of rehabilitation; or (4) what factors the Registrar considers when setting the earliest reapplication date for a denied applicant.

At its March 21, 2019, meeting the Board reviewed and authorized the proposed regulatory changes. [Agenda item G-1]. [24:2 CRLR 96-98] Later, at its September 24, 2019 meeting, the Board reviewed textual modifications to the regulatory language and approved a motion to continue with new, modified text in the rulemaking process. [Agenda item G-6].

The Board has scheduled a public hearing for April 28, 2020, at the John C. Hall Hearing Room at CSLB headquarters in Sacramento.  It is unclear given current public health restrictions whether that hearing will still take place.  Written comments on the proposed amendments must be submitted to the Board on or before April 28, 2020, at 5:00 p.m.

Inquiries or comments concerning the proposed administrative action may be addressed to:

Contractors State License Board
9821 Business Park Drive
Sacramento, CA 95827
Attn: Betsy Figueira
(916) 255-3369
(916) 364-0130 (FAX)



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