By Shauna Krause, President, Capitol Services, Inc.
A question from the tall timber falls on my desk. I explain the ‘stand-alone’ complexity of separation for a contractor and provide some ‘anxiety’ relief with an update on new law eliminating ‘crime’…
Q: Can forest restoration projects which includes the following work be done under a Timber Operator License only, or do they also require a Contractor’s license, and if so, which license(s)? The work includes forest thinning, biomass collection, removal and/or reconstruction and restoration of old forest logging roads and bridges, and related infrastructure (drainage, soil excavation and export), winterization of roads during project (grading and application of crushed rock), stream restoration (including excavation), addition of sediment basins, installation of culverts, and installation of cofferdams and other wooden structure to divert flow.
A: A Cal Fire LTO (Licensed Timber Operator) is only appropriate for harvesting trees, but not to perform any of the other trade work described. A Contractor’s License would be required, and the most appropriate classification for the work described would be an “A” General Engineering license.
Q: My Partner and I currently have a licensed Construction company. We are a commercial General Contractor. We are starting a new business focusing on residential construction. We would like to treat this business as a completely separate entity with a separate name. I am a bit unclear about how this impacts ownership. The current commercial company is owned by myself and my Partner, however the residential business will have additional owners. Is that going to be an issue?
A: Let me preface my answer by stating that I am only speaking from a Contractor’s Licensing perspective with regards to ownership. Because the residential company will be a separate entity, it will require a separate license number (which you probably are already aware of). If you plan to be the Qualifier on both licenses, you will be required to own at least 20% of each company. Beyond that, the CSLB doesn’t concern themselves with ownership. As long as you own at least 20% of each, the two separate entities can be “stand alone” companies with different owners.
Q: Our company obtained a Contractor’s license a couple of years ago and my Boss didn’t want to list himself as the Qualifier (or anywhere on the application for that matter) because he had a Misdemeanor conviction in 2015 that he suspected may have been an issue with obtaining the license. He would like to become the Qualifier, but can you give us any insight on how his criminal background may affect the approval?
A: Actually, with the start of the new fiscal year for the CSLB (July 1st), they made a significant change to the application where they no longer ask applicants if they have been convicted of a crime. Assembly Bill (AB) 2138 was signed into law in September 2018. All individuals listed on a license will still need to submit fingerprints and a criminal background will be conducted, and each case will still be evaluated, but the conviction question has been removed from the application. And FYI, CSLB staff may reach out to applicants for further information regarding their criminal background if needed.
While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email firstname.lastname@example.org, or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA 95827. Research past columns at www.cutredtape.com.