By Grant Marcketta
On September 22, 2024, Governor Newsom signed the Contractors State Licensing Board’s (CSLB) sunset bill, SB 1455 (Ashby) (Chapter 485, Statutes of 2024), which extends the Board’s sunset date to January 1, 2029. SB 1455 amends section 7125(f) of the Business and Professions Code to extend the worker’s compensation mandate deadline for licensed contractors to January 1, 2028. The bill also amends section 7125.7 to extend the Board’s deadline for the creation of a worker’s compensation exemption system for contractors without any employees to January 1, 2027.
Federally Recognized Tribes. SB 1455 amends section 7025.1 of the Business and Professions Code to define “Federally recognized tribe” as a tribe located in California and included in the Federal Register pursuant to the Federally Recognized Indian Tribe List Act of 1994, and includes an entity controlled by and established for the benefit of one or more tribes. CSLB must license a federally recognized tribe that applies for licensure if the tribe is compliant with the statutory provisions to engage in a business that CSLB regulates. SB 1455 further amends section 7065 of the Business and Professions Code to require a federally recognized tribal business to provide verification of its status as a tribal business to CSLB.
Workers’ Compensation. SB 1455 amends section 7125.7 to require the Board to establish a process and procedure to verify whether an applicant or licensee without an employee or employees is eligible for exemption from the workers’ compensation insurance requirement. In addition, SB 1455 will extend the requirement for every licensed contractor to have active workers’ compensation insurance, if applicable, to January 1, 2028.
On March 11, 2024, the Sunset Review Oversight Committee raised questions relating to CSLB’s sunset review and discussed them during their oversight hearing and thereafter in a written background paper prepared by the legislature [see CRLR 29:2 38–41]
At the Board’s June 13-14, 2024, meeting, the Board reviewed the sunset bill and discussed an amendment to Workers’ Compensation mandate that the Board had previously voted to support. Vice Chair Mark initiated discussion by sharing the Board staff’s recommendation—that the Board support the bill and appoint a two-person committee to study how to implement an exemption system before the January 1, 2027, deadline. Board member Ruane stated, “the board worked very hard to accomplish the 2026 deadline.” Board member Granzella asked, “what the downside is of not supporting the bill as written.” Thereafter, Registrar Fogt and Chief Deputy Registrar Jamnetski voiced concerns that the board would become a bureau if the Board opposed the sunset bill at its current state.
The Board thereafter discussed the possibility for Registrar Fogt to conduct his suggested study before January 1, 2026. After Registrar Fogt confirmed that he would be able to complete his study within the next 12 months, the Board moved to support SB 1455 with amendments. Those amendments were for sections 7125(f) and 7125.7 to have their deadlines reverted to January 1, 2026, and December 31, 2025, respectively.
At its June 21, 2024, meeting, the Board again discussed the May 16 version of the bill. Registrar Fogt stated that CSLB will cease to exist on January 1, 2025, if not extended by SB 1455. He made note of Board member’s hesitation with the bill with regards to the worker’s compensation mandate implementation date being extended from 2026 to 2028. He also restated oversight committee member Marc Berman’s concerns that CSLB would be at risk of losing 10 percent of licensees if the mandatory workers’ compensation requirement was placed into effect. After Board member comments, the Board thereafter voted to support the bill as amended by the Senate.
All new amendments to SB 1455 become effective January 1, 2025.