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					                               HIGHLIGHTS OF
                    THE CONTRACTORS’ STATE LICENSE BOARD
                              BOARD MEETING

                              INDIAN WELLS, CALIFORNIA
                                    MARCH 11, 2010

                                                                            By Sam K. Abdulaziz
                                                                  Abdulaziz, Grossbart & Rudman


The California Contractors’ State License Board held a full Board Meeting on Thursday, March
11, 2010, in Indian Wells, California. All Board Members were present, some through electronic
means.

The meeting was held in conjunction with NASCLA (the National Association of State
Contractors Licensing Agencies), which is a group of other contractor boards or groups dealing
with the licensing area. Steve Sands, California’s Registrar of contractors is a member of
NASCLA.

Due to the size and make-up of the entire group, NASCLA was very interested in some of the
things being done by California. Our highlights deal only with California.

There are four vacant positions on the Board.


I.     REVIEW AND APPROVAL OF NOVEMBER 12, 2009, BOARD MEETING
       MINUTES


       1.     Legislative Committee Report (of 11/12/09 meeting)

              Legislation will be discussed at length later in these highlights.

       2.     Enforcement Committee Report

              The Licensing and Enforcement Committee held a joint meeting October 22,
              2009. There was significant industry attendance.


       3.     Licensing Committee Report

              Board Member Joan Hancock introduced Licensing Chief Karen Olligner who
              presented the Licensing Committee report, division update and Testing Program
              update. She highlighted the expansion and relocation of testing facilities in San
              Diego, Fresno and Oxnard.

              Board Member Lisa Miller-Strunk commented that she wanted to be on the record
              observing what a difficult job it is to work in the Call Center. She acknowledged
     the extraordinary job that the Call Center has done, which is attributed to good
     leadership and guidance.

     Licensing Chief Karen Ollinger also provided the Testing Program update.

4.   Enforcement Program Update

     This update was provided by Chief of Enforcement David Fogt. Mr. Fogt
     covered enforcement activities in declared disaster areas, and partnering with the
     Department of Insurance within these disaster areas, to achieve better consumer
     relations. This included elder abuse matters.

     On an important note, Mr. Fogt indicated that the CSLB’s ability to meet
     enforcement objectives have been compromised by the recent budget cuts and the
     additional third furlough day, which has lead to a negative impact on staff moral.

     My personal opinion is that Mr. Fogt’s staff has done a wonderful job to date.
     Hopefully, they will get some more help.

5.   Public Affairs Committee Report

     Chief of Public Affairs, Rick Lopes, described a new publication that had been
     sent out to over 500 building officials throughout the state. The publication
     mailer included posters, brochures and building official guides.

     Mr. Lopes also discussed media events with sting operations in various locations
     throughout California.

     Mr. Lopes reported that the Public Affairs office will be reducing the number of
     CSLB publications in print due to budget cuts and will try to encourage
     consumers to search online for such publications.

     Senior scam stopper seminars and community events are ongoing, although the
     furloughs are still in place.

6.   Executive Committee Report

     The Fresno site has been put on hold. It will not be able to move to another site
     until further notice.

     Brian Stiger is the new Director of the Department of Consumer Affairs.

     Jeanette Ayubi, Administrative Assistant, has left the CSLB. We will miss her.




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II.   LEGISLATIVE COMMITTEE REPORT

      1.        Status of Board-Sponsored Legislation

           a.          Non-Licensee Citation

                       Complaints received against unlicensed contractors shortly before the
                       expiration of the four-year statute of limitations cannot be pursued due to
                       the lack of sufficient time to conduct an investigation, secure the necessary
                       evidence, and file an action. The law also needs to be updated to reflect
                       the fact that Business and Professions Code section 7048 was amended in
                       2004 to repeal the unlicensed contractor notice requirement. The CSLB
                       proposes to amend section 7028.6 to reflect the 2004 amendment to
                       Business and Professions Code section 7048 and also amend Business and
                       Professions Code section 7028.9 to extend the statute of limitations by
                       providing an 18-month investigative and filing period for non-licensee
                       cases.

           b.          Business and Professions Code Section 7058.5; Clean-up legislation

                       This is clean-up legislation. This deals with the asbestos open book exam.
                       It concerns the disposal of asbestos encountered on construction projects.

                       The paper booklet is expensive to print and the current law requires
                       licensing staff to process the paper document to assure that it was
                       completed. The proposed change is to amend section 7058 of the
                       Business and Professions Code to authorize administration of the asbestos
                       open book exam by electronic means.

           c.          Amendments to harmonize Business and Professions Code sections 125.9
                       and 7099.2

                       Under Business and Professions Code section 125.9, there is a $5,000 cap
                       for fines assessed by agencies under the Department of Consumer Affairs.
                       In 1992, this legislation was amended to provide an assessment of a
                       $15,000 civil penalty for specified violations of the Contractors’ State
                       License Law. The proposed changes clarify that a $15,000 civil penalty
                       may be assessed in accordance with the intent of the prior legislation.

           d.          Violations of the Public Contract Code

                       The Board would amend Business and Professions Code section 7110 to
                       include a reference to the Public Contract Code so that the two codes are
                       consistent relative to CSLB disciplinary authority.

      2.        Review and Consideration of the Following Two-Year Bills

           a.          AB 560 (Net energy metering)– This bill provides incentives for the
                       development of solar and alternative energy systems. However, a last

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                 minute provision precludes C-46 contractors from installing these types of
                 systems, instead requiring a C-10 license. The bill also mandates that the
                 Board allow C-46 contractors to be eligible to test for a C-10 license. At
                 the last meeting, the Board decided to oppose the bill, unless it is amended
                 to remove the latest revision.

     b.          AB 660 (Sprinkler fitters: licensing) – This bill would enact a
                 comprehensive program for the certification and regulation of sprinkler
                 fitters. It would not allow anybody to do any work on fire suppression
                 system unless he or she possess a valid sprinkler fitter or limited scope
                 sprinkler fitter certificate issued by the State Fire Marshall. It provides for
                 enforcement by the State Fire Marshall. The CSLB does not really have
                 authority over the employees that will be affected by this bill. They want
                 direction from the Board as to how to address these issues and currently
                 have a watch position. It is a two year bill that was introduced February
                 25, 2009

     c.          AB 1074 (Contractors: Fraudulent License Numbers) -- This makes using
                 another’s license a crime. This is a Board sponsored bill. However, in
                 that this bill would possibly add to the prison population, the Senate
                 Public Safety Committee will not hear it nor pass it, in order to keep the
                 population down. Because of this, the CSLB will drop it from their
                 tracking system.

     d.          SB 258 (Contractors: Public Works) -- This bill would require validation
                 standards of competency through a prequalification certification system.
                 This is another two-year bill.

     e.          SB 392 (Contractors: Limited Liability Companies) -- This would
                 authorize the issuance of a contractors license to a limited liability
                 company. It authorizes their officers to qualify for their license. It would
                 also require the limited liability company to maintain liability insurance
                 for $1 million and post a $100,000 surety bond specifically for labor
                 related issues. This too is a two-year bill.

3.        Review and Consideration of Bills Introduced in 2010

     a.          AB 2267 (Contractors: License Requirements: Bond) -- This bill would
                 require for issuance, reinstatement, reactivation, renewal or continued
                 maintenance of a license, a bond for a specified amount to be filed (or
                 already on file). It would change the amount that a material supplier can
                 collect on the bond from $7,500.00 to $4,000.00. The CSLB supports this
                 idea but the staff recommends that the bill be amended to increase the
                 amount of the bond that can be obtained by owners who contract for
                 construction of a residence. As of the last Board Meeting, the CSLB
                 recommended a watch position on this bill.

     b.          AB 2332 (Collection of Taxes / Penalties Owed to State Agencies by
                 CSLB Licensees) -- This deals with unsatisfied tax liabilities. The staff

                                            4
                 recommends that the bill be amended to include additional agencies in the
                 list of agencies that can request suspension of a licensee for failure to pay
                 unsatisfied tax liabilities. The staff recommends a watch position if the
                 bill is amended to include CSLB amendments, if amended the staff
                 recommends a support position.

     c.          AB 2305 (Contractors: Workers’ Compensation Insurance) -- This would
                 amend existing law and require C-39 roofing contractors to maintain
                 workers’ compensation insurance even if he or she has no employees. The
                 CSLB has a support position.

     d.          AB 2419 (Contractors: Workers’ Compensation Insurance) -- Under this
                 bill any unlicensed contractor who has failed to provide workers’
                 compensation insurance coverage for his or her employees would be
                 issued a “stop order” from the Registrar. The CSLB has a support
                 position.

     e.          ABX8 8 (Franchise Tax Board: State Board of Equalization) -- This bill
                 would authorize the Franchise Tax Board to suspend contractor licenses
                 until tax assessments are paid if the licensee or any person named on the
                 license has an unsatisfied tax liability. There is currently a watch
                 recommendation on this bill.

     f.          SB 1171 (Regulatory Boards: Operations) -- This bill abolishes certain
                 Senate committees and hands their duties over to the Legislature and
                 requires the replacement of all Board Members and the Executive Officers
                 rather than a sunset of a Board that is not operating in accordance with
                 legislative standards. Remember according to the sunset review, under
                 existing law the CSLB sunsets on January 1, 2011. At this time, there is
                 no extension date for the CSLB in the bill. The CSLB is watching this
                 bill.

     g.          SB 1254 (Contractors: Workers’ Compensation Insurance) -- This bill
                 would again authorize the Registrar to issue a “stop order” to an
                 unlicensed contractor who does not have workers’ compensation insurance
                 for his or her employees but would also make it a crime if that unlicensed
                 contractor does not comply with the stop order. Additionally, it authorizes
                 an increase from 3 to 12 in the number of CSLB peace officer positions.
                 There is a support recommendation for this bill.

4.        Update on Sunset Legislation

          SB 638, referred to as the Sunset Review Bill. This requires the sunset of the
          CSLB and its Registrar on January 1, 2011 (sunset meaning the end of the CSLB
          as a division of the Department of Consumer Affairs). Conversations have been
          held with members of the Senate Business and Professions and Economic
          Development Committee along with their counter-parts in the Assembly. This is
          something that happens every so often (there is no set time period, the CSLB is


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                 extended based on legislation) and therefore does not appear to be a problem. We
                 do not believe that the CSLB will be “sunseted.”


III.   Enforcement Committee Report

       1.        Review and Approval of 1/28/10 Enforcement Committee Summary Report

            a.          Public Comment

                        The City of Fresno had been looking into a proposed Municipal Ordinance
                        that would require licensed contractors to display a decal on their vehicles,
                        including that they are licensed by the CSLB. We expect that someone
                        from the Enforcement will be present at the next meeting.

            b.          Enforcement Program Update

                        Due to various executive orders during the past 10 years, Enforcement has
                        been forced to eliminate many positions. Currently there are 221
                        positions, however, after factoring in the impact of the furlough and actual
                        staff availability it equates to 185 positions. There are also 9 vacant
                        positions that are subject to remain vacant under the Governor’s most
                        recent executive order.

                        The Enforcement Division had 114 vehicles. As a result of a mandated
                        15% reduction, the vehicles in fiscal year 2008/09 and the 13 vehicles
                        scheduled to be surveyed by July 1, 2010, the Enforcement Division is left
                        with 70 vehicles to be distributed amongst 110 investigators.

            c.          Investigative Centers

                        Investigative Centers primarily investigate consumer driven complaints
                        regarding poor workmanship and incomplete work. They assist
                        contractors in correcting deficient business practices.

                        In one case, the Investigative Centers staff worked closely with the CSLB
                        statewide investigative fraud team to conduct a sting to identify an elusive
                        unlicensed contractor that had victimized an elderly homeowner. The
                        Riverside District Attorney accepted the case and the unlicensed
                        contractor is currently awaiting trial.

                        Additional investigations that would result in felony criminal charges of
                        elder abuse and burglary are top priority.

            d.          Review and Recommendation of Enforcement Priorities

                        i.     Health and Safety
                        ii.    Disaster Response
                        iii.   Elder Abuse

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                iv.     Unlicensed Practice/Stings/Sweeps
                v.      Abandonment
                vi.     Financial Crimes / Transient Criminals
                vii.    Workmanship Complaints
                viii.   Application Investigations / Bonds
                ix.     Subcontractors and Material Suppliers
                x.      Technical Violations (name style, classification, contract
                        violations)

                The Enforcement Division had tried staggering workweeks to deal with
                vehicle shortage. Chief David Fogt said that the Division is currently
                reviewing home storage of vehicles and a recent vehicle sharing strategy
                at the Bureau of Automotive Repair.

     e.         Energy Compliance Sting Pilot Program

                David Fogt informed the attendees on partnering efforts with building
                officials to enforce permit requirements for the installation of heating and
                air conditioning units. Proposals to increase permit compliance to 50% by
                2015 to include:

                i.      Allowing permits to be obtained online with a basic application
                ii.     Providing education material to C-20 licensees
                iii.    Partnering with the California Public Utilities Commission for
                        contractor training
                iv.     Conducting sting operations in six jurisdictions, commencing
                        February 8, 2010

     f.         Strategic Planning

                Registrar Sands provided the Committee with an update on the Strategic
                Planning session scheduled for April 29 and 30, 2010, in Monterey.

2.        Enforcement Program Update

     a.         Vacancy Update

                There are currently 11 vacant positions in the Enforcement Division. Staff
                is proactively working to recruit and advertising to fill these positions.

     b.         Complaint Handling Highlights

                i.      Intake/Mediation Centers

                        a.     Misuse of a Father’s License
                        b.     Fumigation Complicates Health Issues For Disabled
                               Consumer
                        c.     A Lesson In Claims Against Payment Bonds
                        d.     Bond Company Negotiations Provide Restitution

                                          7
     ii.    Investigative Centers

            a.     Transient Criminal Pleads Guilty
            b.     Felony Charges For Taking Advantage of the Elderly
            c.     Elderly Victim Fights For Justice
            d.     Application Investigation Proves Its Importance
            e.     Industry Expert And Investigator Provide Persuasive
                   Evidence

     iii.   Case Management

            The Disciplinary Services Section, formerly known as Case
            Management, is the unit responsible for disciplinary and
            administrative actions for the CSLB. The unit receives legal action
            reports from the Investigative Centers, SWIFT, the Application
            Investigation Unit and the Criminal Background Unit. This is to
            ensure consistency throughout the state to ensure reports are
            enforceable, accurate, timely and professional.

            In 2008, CSLB hired a consultant, Ben Frank, to study and
            recommend steps that would streamline CSLB’s business methods
            while achieving consistency within each program handled by the
            unit. Because of Mr. Frank’s study, the arbitration program and
            other ancillary programs are separate units. One of the
            Disciplinary Services section offices handles citations and the
            other accusations. This reorganization is almost substantially
            completed. As of January 2010, a report will be generated each
            month which will track timeline milestones as wells as production.

c.   Complaint Handling Statistics

     i.     Maintain ER1 Production of Closing 10 Complaints Per Month
     ii.    Increase the Percentage of Licensee Complaints Settled to 30%
     iii.   Dispose of 70% of Licensee Complaints at the IMC’s
     iv.    Reduce 270-Day-Old Complaints to 100 or Less
     v.     Attorney General Costs
            Present projections indicate that Attorney General cost will not
            exceed the 2009-10 budget for this line item.

d.   Organizational Development Update

     i.     Orientation Program
            The Enforcement Committee continues to hold orientation
            programs at the headquarters in Sacramento. Over three years they
            plan to include 16 offices. By the end of March, they will have
            had 7 offices come and visit.

     ii.    Unfair Business Practice, Temporary Restraining Order and
            Telephone Disconnects

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            The CSLB had asked a Deputy Attorney General team to hold
            training sessions for some of the Enforcement Supervisors. The
            training included how to get a temporary restraining order, unfair
            business practice information, and restitution. Hopefully these
            trained supervisors will now be able to work effectively and
            efficiently from the start of an investigation.

     iii.   Basic Investigative Techniques
            The CSLB is hoping to be able to provide a one-week training
            course with the Sacramento Regional Public Safety Training
            Center in June of this year. They are currently researching
            programs regarding regulatory law, interviewing techniques, and
            evidence collection to name just a few.

     iv.    Basic Construction
            The CSLB has chosen an instructor at the University of California,
            Davis to hopefully conduct a couple of two-day seminars (one in
            Sacramento and one in Norwalk) for all Consumer Service
            Representatives, Enforcement Representatives, and Deputy
            Attorney Generals that work on CSLB cases. The course should
            cover a basic understanding of construction and its terminology.

     v.     Search Warrant Training
            The CSLB is planning on sending one representative from each
            CSLB office to Norwalk for a training session from the Los
            Angeles County District Attorney’s office on the methods and
            procedures for obtaining search warrants. The District Attorney’s
            Office has kindly offered to provide this training to the CSLB.

e.   Proactive Enforcement Update

     i.     Stings

            a.       Two Arrests, 14 Notice To Appears in Marin County Sting
            b.       SWIFT Staff Conducts Workers’ Compensation Fraud
                     Stings in Yolo and San Mateo Counties
            c.       San Mateo County Workers’ Compensation Sting
            d.       SWIFT Stings a Dozen Non-Licensees in Lincoln
                     Operation
            e.       Central Valley SWIFT Partners With the Merced County
                     District Attorney’s Office to Target Non-Licensees in City
                     of Merced
            f.       Central Valley SWIFT Nabs 16 Non-Licensees in Hanford
                     Sting
            g.       SWIFT Busts 14 Non-Licensees at Palmdale Sting




                               9
     ii.        Sweeps

                a.     SWIFT Teams With District Attorney for Workers’
                       Compensation Sweep
                b.     SWIFT Partners with EDD for Monterey Sweep
                c.     EEEC Staff Conducts Two-Day Sweep in Los Angeles
                d.     SWIFT Sweeps Simi Valley
                e.     SWIFT Sweeps LA County Communities
                f.     Swift Sweeps San Diego County
                g.     Repeat Offender Arrested at Joint Sweep With Orange
                       County District Attorney

f.   Energy Permit Compliance Pilot Program

     The Contractors' State License Board was approached by a coalition of
     governmental agencies and private utility companies to plan for
     enforcement of new Title 24 requirements effective January 1, 2010. The
     CSLB has been asked to help implement the new requirement to insure
     that C-20 contractors performing repair or replacement of heating,
     ventilation and air conditioning systems comply with Title 24 and the
     Contractors’ License Law.

     Some have estimated that building permits are taken out for only 5 – 10%
     of all residential HVAC installations that require a permit. It is suspected
     that many of these installations may be substandard. This results in
     wasted energy, not to mention failures and potential life safety risks.
     Based on what is going on in the industry now, it is expected that
     compliance will be even lower. The group wishes to increase the
     compliance substantially.

     The most important approaches to increase the compliance are:

           1.   Simplify the compliance process;
           2.   Educate contractors and the building code officials;
           3.   Educate homeowners; and
           4.   Improve enforcement.

     As a result, the strategy is to go forward with undercover sting operations
     targeting licensed and unlicensed contractors suspected of performing
     HVAC repairs or replacements of existing systems without obtaining
     required building permits.

     The group will identify and contact certain building departments to
     determine how many C-20 permits were issued during the past twelve
     months and they will have a list of any specific contractors that they want
     to target. They will also prepare a statistical report to measure the C-20
     request.



                                 10
            The group will develop an industry bulletin to advise licensees with a
            business address in the vicinity of chosen cities. They will identify sting
            targets. CSLB investigators from each jurisdiction will research sting
            targets and conduct sting operations.

            Rick Lopes or someone else from the CSLB staff will partner with
            someone from the Public Utilities Commission to develop television and
            radio ads and produce press releases and conduct press conferences.

            It should be noted that Rick Lopes has been very proactive in “getting out
            the word.”

            A Building Permit Enforcement Study is being prepared. This seems to be
            a real good way to go.

3.   Presentation of the CSLB Arbitration Program

     Arbitration Mediation Conciliation Center (AMCC) handles the CSLB’s
     mandatory arbitration process as follows:

     a.     Agreement to Arbitrate is Submitted to AMCC from the Contractors' State
            License Board’s conflict check sent to arbitrator
     b.     Hearing Room Request sent to Location
     c.     AMCC to send to each party, via US Certified and Regular Mail
             i.    Appointment of Arbitrator
             ii.   Hearing Date, Time and Location
             iii.  Arbitration Worksheet
             iv.   Frequently Asked Questions
     d.     Request for Continuance Received from Either Party
     e.     AMCC to Schedule New Hearing Date
     f.     Hearing Conducted
            i.      Arbitrator may Elect to Conduct Site Inspection
                    a.      Parties Notified Of Site Inspection
            ii.     Arbitrator may Choose to Reopen Case Within 30 Days
            iii.    Briefs may be Requested by Arbitration with a Date Set for
                    Submission
            iv.     No additional witnesses, proof or briefs will then be submitted
     g.     Hearing Closed
     h.     Award Rendered
            i.      AMCC Sends to Parties via U.S. Certified Mail with Instruction
                    Letter and Frequently Asked Questions.
     i.     Either Party may Request Correction to Award
            i.      Opposing Party may Object to Award Correction
     j.     Arbitrator to Correct or Deny Application to Correct Award (if applicable)
     k.     Award Becomes Order of Registrar (within 30 calendar days)




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IV.   Licensing Committee Report

      1.        Review and Approval of January 28, 2010 Licensing Committee Summary Report

                Staff Furloughs equate to approximately 22 fewer staff in the Licensing Division.
                The number of applications for original exams has declined.

                Chief Karen Ollinger stated that the Licensing Information Center was the unit
                hardest hit by the furlough program. Between calendar year 2008 and 2009, the
                CSLB has seen a 14% increase in the amount of time that individuals must wait to
                be assisted by a Licensing Information Agent.

                Board Member Louise Kirkbride asked if Licensing could provide a breakdown
                of the percentage of caller questions that could be provided by email when an
                immediate answer was not needed. Chief Ollinger replied that the largest
                percentage of calls come from licensees or applicants requesting a status on their
                applications. The Licensing Division does not have an email response system.

      2.        Licensing Program Update

           a.          License Application Workload

                       The average number of applications received per month for the past ten
                       fiscal years had a high amount in the 2004/05 and 2005/06 fiscal years,
                       which was attributed to fingerprinting requirements that went into effect
                       January 2005.

           b.          Applications Updated

                       In May 2008, CSLB staff revised seven of its most used applications for
                       licensure, registration and certification. This included the addition of red
                       ink throughout the application to highlight important text; the addition of a
                       disclaimer about schools; and the addition of statements indicating that the
                       Certification of Work Experience form may be rejected if it contains
                       strikeouts or modifications that may compromise the validity of the work.

           c.          License Transaction Processing Times

                       Processing times or “weeks to process” refers to the number of weeks
                       before an application or other document is pulled for processing by a
                       technician. There has been an overall decrease in applications.

           d.          Fingerprinting/Criminal Background Unit Update

                       Since the fingerprint program began in January 2005, CSLB has received
                       more than 204,000 transmittals from the Department of Justice.

           e.          Licensing Information Center (LIC) Update


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                The Licensing Information Center has suffered the greatest impact as a
                result of the staff furloughs. Although the number of calls has remained
                relatively consistent over the calendar years of 2008 and 2009, because of
                the 15% reduction in staff hours, the call wait times have increased by
                14% overall in 2009.

                A new Licensing Information Center analyst training position was created
                and provides comprehensive week-long training programs with all new
                CSLB employees, all staff members interested in increasing their CSLB
                skills and is now offered state-wide.

                The class covers training on the laws and processes relating the licensing
                functions of the CSLB as well as a general overview of the enforcement
                program. Those who attend this class receive a CSLB training manual
                design to improve the quality of their tasks.

3.        Testing Program Update

     a.         Testing Center Status

                i.     San Diego – Increased capacity to 28 by relocating to a new space.
                       This move was completed in February 2010.
                ii.    Fresno – Relocating to increase capacity and resolve security
                       issues. A new location has been selected and a pre-construction
                       meeting was scheduled for late February 2010. Completion is
                       expected in mid-2010.
                iii.   Oxnard – Relocating will be required when the lease extension
                       expires in August 2010. A new location has been selected and
                       construction has begun. Completion is expected in mid-May 2010.

     b.         Testing Division Staffing

                There is one part-time position and one full-time position vacant.

     c.         Examination Development

                The CSLB has an ongoing responsibility to ensure that its licensing
                examinations are current, relevant and that all licensed contractors exhibit
                basic business competency skills. Because of that there are always various
                items in review, such as:

                i.     Occupational Analyses

                       a.      C-27 Landscaping
                       b.      C-29 Masonry
                       c.      C-32 Parking and Highway Improvement
                       d.      C-33 Painting and Decorating
                       e.      Law and Business


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                      ii.     New Examinations in Progress

                              a.     “B” General Building
                              b.     C-6 Cabinet, Millwork, and Finish Carpentry
                              c.     C-11 Elevator
                              d.     C-20 Warm-Air Heating, Ventilating and Air-Conditioning
                              e.     C-23 Ornamental Metals
                              f.     C-39 Roofing
                              g.     C-43 Sheet Metal
                              h.     C-51 Structural Steel


V.   Public Affairs Committee Report

     1.        Public Affairs Program Update

               I do not know how Rick Lopes and his staff do it but they get a lot of work done
               for the media. Lopes continues to provide a wide range of services including
               proactive media and advertising campaigns, responses to the media inquiries,
               community outreach, including Senior Scam Stopper seminars, special events and
               speeches to service groups and organizations, publication and newsletter
               development and distribution, and contractor education and outreach.

          a.          Media Outreach and Public Awareness Campaign Summary
                      The following is a list of press releases:

                      i.      October 30, 2009 – Contractors State License Board Goes
                              Undercover to Trick Phony Contractors in Southwestern Riverside
                              County
                      ii.     November 23, 2009 – CSLB Sweeps Up Four Suspected Workers’
                              Comp Insurance Violators in “49 Fire” Burn Area
                      iii.    November 24, 2009 – CSLB Special Investigation Results in Jail
                              Time for Unlicensed Contractor Who Ripped Off Licensee’s
                              Identity
                      iv.     December 10, 2009 – Unlicensed Contractor Headed for Long
                              Prison Term
                      v.      December 17, 2009 – CSLB Teams with San Diego County
                              District Attorney to Target Crimes Against the Elderly
                      vi.     December 22, 2009 – Contractors State License Board Issues Seal
                              Scan Warning
                      vii.    December 29, 2009 – New Year Brings New Penalties for
                              Unlicensed Contractors
                      viii.   December 31, 2009 – Online Warning to Unlicensed Contractors
                              in Merced Does Not Deter Illegal Activity – or Arrests!
                      ix.     January 12, 2010 – CSLB Urges Humboldt Area Residents to Only
                              Hire State-Licensed Contractors for Earthquake Repairs
                      x.      January 19, 2010 – “Sick and Tired” Unlicensed Contractor
                              Awakened by CSLB Sting


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                       xi.     January 20, 2010 – Contractors State License Board Encourages
                               Vigilance as Winter Storms Batter State
                       xii.    January 25, 2010 – Contractors State License Board Awards Cal
                               Poly Construction Management Education Grant
                       xiii.   January 28, 2010 – Contractors State License Board Investigators
                               Alerted to Sting Target by Local Building Officials
                       xiv.    January 29, 2010 – Notorious Paving Scammer Rolling Toward
                               Incarceration
                       xv.     February 3, 2010 – Unlicensed Contractor Loses Car & Gains
                               Court Date During Contractors State License Board Sting in
                               Palmdale
                       xvi.    February 3, 2010 – Suspect With Pending Elder Abuse Charge &
                               A Registered Sex Offender Among Those Caught in Humboldt
                               Undercover Sting

           b.          Disaster Outreach

                       An aggressive outreach campaign has been conducted after Humbolt
                       County’s 6.5 magnitude earthquake of January 9, 2010, in order to inform
                       and educate consumers.

                       The recent storms and floods in southern California also brought
                       enforcement staff to the Local Assistance Centers.

           c.          CSLB-Based Reality TV Show

                       There is continued work on a possible reality-based show focused on
                       CSLB’s SWIFT unit. The current working title is “Sting House” and the
                       first contract has actually been signed. The show is being shopped around
                       to various cable networks. The CSLB hopes that there will be a one-hour
                       pilot episode.

           d.          Senior Scam Stopper Seminars/Community Events

                       The Senior Scam Stopper seminar and other community events are
                       continuing. These events inform and empower seniors at the local level
                       and bring government to the people


VI.   Executive Committee Report

      1.        Impact on Board Operations Due to Executive Orders, Budget Letters and Related
                Policies

                The Governor is not issuing any additional Executive Orders at this time to
                achieve the goal of reducing state spending. Acting Secretary Thomas L. Sheehy
                is directing a hard freeze on any and all vehicle purchases for any purpose,
                without exception, as of February 11, 2010, as well as a freeze on any and all
                furniture purchases. Critical services and resources have been cut to the blind,

                                                15
          disabled and poor residents of California as well. This is just a brief synopsis of
          what is going on.

          The Governor has stated that there is a continuing weak performance in the
          California economy and there is an anticipated $21 billion general fund deficit
          through the 2010/11 fiscal year.

2.        Administration and Information Technology Program Update

     a.          Administrative Program Update

                 i.      Positions

                         There are 31 vacant positions at the CSLB. There have been some
                         new hires, transfers and promotions but they are still understaffed.

     b.          Information Technology Division Update

                 i.      Electronic Payment at CSLB Headquarters

                         Because of the hiring freeze and vacant positions, the CSLB is
                         having difficulties setting up the ability to accept electronic
                         payments such as credit and debit cards. However, the project is
                         still moving forward and approval has been given to hire a
                         contractor to complete the project.

                 ii.     Automated Call Distribution System Replacement

                         The CSLB has requested an exemption to purchase new
                         Automated Call Distribution system software that will be used by
                         the call center and manages the distribution of incoming calls to
                         the CSLB call center agents. The new software is less expensive
                         and has more features than the current system.

     c.          Budget Update

                 i.      Fiscal Year 2009/10 Budget and Expenditures

                         The 2009/10 Fiscal Year budget has a net appropriation of $54.3
                         million. The CSLB spent about 51% of that through December
                         2009

                 ii.     Revenue

                         The final revenue amounts through December 31, 2009, was
                         $25,718,300, down almost 10% from last year.

                 iii.    Fiscal Year 2009/10 Adjusted CSLB Budget and Budget
                         Reductions

                                           16
            The adjusted 2009/10 budget totals $54.3 million.

     iv.    Fund Condition

            At this point, the CSLB has about $23.6 million in reserves which
            is a little more than five moths’ worth.

d.   Review and Final Approval of Proposed Regulatory Changes to California
     Code of Regulations, Section 811: Fees

     The revenue generated by the current fee structure is no longer sufficient
     to support the operation of the CSLB Licensing and Regulatory Program
     in future years. The CSLB proposes to increase all licensing fees to their
     statutory maximum on July 1, 2011.

e.   Strategic Plan Update

     i.     2010-2011 Strategic Planning – Challenges and Opportunities

            a.      Objectives and Desired Outcomes

                    (A)      Brief Board and staff on strategic planning process
                    (B)      Identify and quantify needs from a staff, Board, and
                             organizations perspective
                    (C)      Discuss current operations realities and challenges,
                             and staff’s plans and programs for addressing them
                    (D)      Define and confirm the consensus roadmap –
                             confirm mission and priorities, and define strategies
                             to leverage staff resources and maintain morale and
                             productivity.

     ii.    Challenges and Board Role

            a.      Challenge -- Impact of staffing shortages on timelines of
                    processes
                    Board Role – Endorse priorities and standards for timelines
            b.      Challenge -- Enforcement priorities – reactive or proactive
                    stance
                    Board Role – Understand impacts of staffing choices.
                    Confirm the value of enforcement as a priority. Endorse
                    suggested strategies and priorities.
            c.      Challenge -- Communications choices and priorities –
                    licensees, consumer, legislative
                    Board Role – Understand value of communications.
                    Advise on and endorse preferred mix of tools and venues
                    given financial constraints.
            d.      Challenge – Recruitment and retention. Succession
                    planning and knowledge drain

                               17
                                                 Board Role – Be knowledgeable and support recruitment,
                                                 retention and training priorities.
                                       e.        Challenge – Laws in place but challenges in applying and
                                                 enforcing
                                                 Board Role – Understand resource choices in applying the
                                                 law. Endorse priorities – complaints are #1, a level playing
                                                 filed is #2
                                       f.        Challenge -- Impact of shortages on examination process
                                                 Board Role – Understand choices and tradeoffs, including
                                                 new/revised exams and administrative options
                                       g.        Challenge – State mandates and ties to DCA affect
                                                 implementation of priorities – e.g. IT strategies
                                                 Board Role – Understand staff work-arounds and endorse
                                                 new directions


VII.      Tentative Schedule

                   April 29-30, 2010             (Strategic Planning) To Be Announced

                   July 2010                     DCA PACT Summit Sacramento



  Attorney Sam Abdulaziz of Abdulaziz, Grossbart & Rudman has been practicing construction law for over 30 years. He
 has written a book called “California Construction Law” which is updated annually. He represents numerous construction
 trade associations and contractors. He appears at Contractors State License Board meetings and has argued a number of
cases before the appellate courts, including the California Supreme Court dealing with the "Pay-If-Paid Clause." Abdulaziz,
  Grossbart & Rudman provides this information as a service to its friends & clients. The documents are of a general
nature and are intended to highlight areas of the subject matter and should not be used as a substitute for legal advice.
It is intended to highlight the areas being discussed. This document does not create an attorney-client relationship, or
    protect any confidential information until a written agreement is signed. You should seek the aid and advice of a
  competent attorney, accountant and/or other professional instead of relying on the presentation and/or documents.
Sam Abdulaziz can be reached at Abdulaziz, Grossbart & Rudman, P.O. Box 15458, North Hollywood, CA 91615-5458;
                       (818) 760-2000, Facsimile (818) 760-3908; or by E-Mail at info@agrlaw.net .
                                    On the Internet, visit our Website at www.agrlaw.net



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