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Panel advances licensure fairness bill to limit total disgorgement for contractors
Summary
SB 342 would limit total disgorgement when contractors are later found to have had short license lapses, allowing recovery for work done while licensed; supporters said current law can create inequitable windfalls for owners and ruin contractors, and the committee advanced the bill.
The committee advanced SB 342, the Contractors Licensure Fairness Act, which modifies California contractor licensing consequences so that judges can limit disgorgement to the period a contractor actually performed work while unlicensed rather than ordering total repayment of all contract payments.
Don Wilcox of the California Conference of Carpenters told the committee that current total disgorgement rules can convert a multi‑year project into a complete windfall for owners if a later audit reveals a licensing lapse. Litigation counsel with experience in construction disputes said the bill is a modest fix to allow equitable remedies where lapses are technical and inadvertent.
Lawmakers asked whether renewal delays or board staffing issues could create unfair lapses; witnesses said the bill can be drafted to account for administrative delays and to prevent gaming of the rule. No primary opposition witnesses came forward in the hearing; the committee moved the item forward for further consideration.
