CSLB-funded study to estimate unlicensed contractors; public urges outreach to artists, sales agents and emergency fraud tools

The Contractors State License Board (CSLB) enforcement committee heard that the Policy Research Center (PRC) will analyze CSLB internal and external data to estimate the number of unlicensed contractors operating in California and to assess activity in declared disaster areas. CSLB staff will provide PRC with enforcement data and access details; PRC will deliver an electronic report anticipated to be completed by February (timeframe in the meeting did not specify year).

The PRC study, described at the committee meeting, will use CSLB enforcement databases and SWIFT records and may be supplemented by external sources such as county business permits and city business-license records, staff said. CSLB will identify a contact person for each data source to answer PRC questions, and the committee was told the final product will include recommendations on resources needed to address unlicensed activity and related consumer-protection issues.

Why it matters: Unlicensed contracting and contractor fraud were discussed as distinct but related risks. Public commenters told the committee that outreach and enforcement efforts should be broadened beyond generic unlicensed-contracting sweeps to address licensed-contractor fraud, sales agents who solicit work, and specific communities such as mural artists who may believe the licensing law does not apply to them.

Committee and staff summary

Mike Jaminski, special projects manager for CSLB staff, briefly summarized the PRC scope: PRC will analyze internal CSLB enforcement data and SWIFT records, seek access to external business-license databases, and prepare an electronic report with recommendations. Staff told the committee the study will include an assessment of unlicensed contracting in declared disaster areas and will outline resource needs to respond to consumer-protection issues arising from unlicensed activity. The report's completion was described as "anticipated by February," without a stated year.

Public comments

Public commenters expanded the committee's discussion in three main areas: (1) balancing enforcement between unlicensed contractors and licensed contractors who commit fraud; (2) targeted outreach to artists and municipalities that hire unlicensed workers for large public-art contracts; and (3) investigation of contractor sales agents who solicit work in communities.

Public commenter Andrea Montano urged the board to ensure the study and subsequent enforcement balance resources to address not only unlicensed activity but also fraud committed by licensed contractors. Montano recommended considering "emergency asset preservation orders that could apply to both licensed and unlicensed contractors where evidence suggests fraud is affecting multiple victims," and said such orders "could help with dissipation of assets needed for victim recovery." She also suggested a business-continuity emergency program to provide bridge funding and payment-prioritization systems for critical subcontractors and vendors.

Davey Rodriguez, a member of the public who asked the board to undertake targeted outreach, said the "artist community . . . largely believe they are immune to prosecution for violating the state contractors license law" and asked CSLB to reach out to artists and the municipalities that hire them. Rodriguez said some municipal art contracts have exceeded $1 million and are being signed with individuals who are not licensed as contractors.

Aida Durazar, another public commenter, recommended the committee explicitly include sales agents in the PRC assessment: "These sales agents also need to have a license with the California state licensing board . . . but a lot of them are not having this license and they're pretending to be licensed when they're not." She urged CSLB to investigate the role of unlicensed sales agents in generating fraud and to include that investigation in outreach and data collection.

What the committee directed or agreed

The transcript records the PRC study scope and the public comments; because this was a staff report and public-comment period, no formal committee vote was recorded on the study itself during the teleconference. Staff described the next steps as CSLB providing PRC the listed data sources and contact persons and PRC preparing an electronic report with findings and recommendations. The committee did not adopt additional, board-level motions during the items covered in this portion of the meeting.

Ending: CSLB staff will provide the PRC with internal enforcement data, SWIFT records, and contacts; PRC will prepare an electronic report that committee materials say is "anticipated to be completed by February." Public commenters asked the board to expand the study's outreach to artists and sales agents and to consider emergency asset-preservation and business-continuity mechanisms for large fraud events.