Capitol Connection Q&A 1375

Capitol Connection Q&A for Contractors
Week of 7/29/2024
By Shauna Krause, President, Capitol Services, Inc.

Our first inquiry is kind of like those irritating math problems from our school days, but
in the end it’s a ‘zero sum’ answer! The last question, is a bunch of questions, every
contractor should know and understand…

Q: Our company purchased an existing contracting business about a year and a half
ago. We receive the renewal application in the mail and noticed there is an Officer listed
on the renewal who is no longer with the company. This prompted us to check the
license online, and we noticed that the license is still showing a notation that states “The
Qualifying Individual certified that he/she owns 10 percent or more of the voting
stock/membership interest of this company; therefore, the Bond of Qualified Individual
is not required.” The RMO/Seller stayed on the license, but it looks like we never
notified the CSLB of the ownership change. We contacted our bonding company to see
about getting a back-dated Bond of Qualified Individual, but they said they can only
back-date the bond 6 months. What do you suggest we do? Is that all we need to do is
send in the Qualifier Bond or is there an ownership form to complete?

A: The CSLB usually only back dates license updates up to 90 days prior to receiving
them. My suggestion would be to just get it corrected ASAP! There is a form that you
will need to have the Responsible Managing Officer (RMO) complete and sign to be
submitted with the Bond of Qualified Individual. The form is on the CSLB’s website
titled “Bond of Qualified Individual Exemption Request”. I know it sounds
contradictory to what you are filing, but you will just have the RMO fill in 0%
ownership on the form.

Q: Hi Shauna, we are still determining who to designate as our Qualifier for the “A”
(General Engineering) classification. Does the employee taking the test have to have a
special title such as Manager or Business owner? Would the license transfer
automatically if the person who took the test retires, gets fired or passes away? Does the
classification simply transfer to an elected person? Does the new elected person have to
take a test?

A: The person taking the test can either be RME (Responsible Managing Employee), or
in your case since you are a corporation, RMO (Responsible Managing Officer). If you
are going to designate the individual as RMO, you would need to give them an Officer
title (President, Vice President, Secretary, etc).

If the Qualifying Individual retires, passes away, or is let go, the license stays with the
company and the CSLB gives you a 90-day grace period to replace the person. If the company
has held the classification for over five years at that point in time, there are options for a
Waiver of examinations for Supervisory employees or Officers who’ve been with the
company during that five-year period, but prior the five year mark, the new Qualifying
Individual would need to sit for exams. Either way, the individual who is replacing the
former Qualifier would need to document the four (or five) years of experience in the
trade.

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 info@cutredtape.com,
or write us at Capitol Services, Inc., 3609 Bradshaw Rd, Ste H, #343, Sacramento, CA
95827. Search past columns at www.cutredtape.com