Under California B&P Code Section 7071.9, what happens to a contractor's license bond when the CSLB orders disciplinary action for license law violations?
Correct Answer
D) A disciplinary bond of up to $50,000 may be required in addition to the license bond
California B&P Code Section 7071.9 authorizes the CSLB to require a disciplinary bond of up to $50,000 in addition to the standard $25,000 license bond when disciplinary action is taken. This additional bond provides extra consumer protection for contractors with violations while allowing them to continue operating under probation.
Why This Is the Correct Answer
B&P Code Section 7071.9 authorizes the CSLB to impose a disciplinary bond of up to $50,000 on top of the standard $25,000 license bond when a contractor is placed on probation or otherwise disciplined. This additional bond is a consumer-protection tool: it increases the financial security available to harmed consumers while still allowing the contractor to continue operating. The disciplinary bond is separate from and in addition to the regular license bond — it does not replace it.
Why the Other Options Are Wrong
Option A: The bond amount is reduced to $12,500
The standard $25,000 license bond is not reduced during disciplinary proceedings. Section 7071.9 moves in the opposite direction — it can require an additional bond on top of the existing one. Reducing the bond amount would decrease consumer protection precisely when the contractor's conduct has raised concerns, which contradicts the statute's purpose.
Option B: The bond requirement is waived during the disciplinary period
The bond requirement is never waived during a disciplinary period. Waiving financial security for a contractor already found to have violated licensing laws would be directly contrary to the CSLB's consumer-protection mission. Bond requirements are maintained or increased, not relaxed, during disciplinary action.
Option C: The existing bond is automatically forfeited
The existing license bond is not automatically forfeited upon a disciplinary order. Bond forfeiture is a separate legal process requiring a valid claim from an aggrieved party. Disciplinary action by the CSLB addresses licensing violations but does not automatically trigger bond forfeiture — the original $25,000 bond remains in place alongside any new disciplinary bond.
Memory Technique
Discipline = more security, not less. Under 7071.9, CSLB adds a disciplinary bond (up to $50K) ON TOP of the standard bond. Think of it as a 'penalty layer' stacked above the base bond.
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