The short version
- SB 342 (signed Sept 30): a license lapse no longer wipes out your pay on public works and commercial or institutional projects. Residential and home improvement work did not change — a lapse can still cost you everything.
- SB 1263 (signed Sept 27): removing hazardous disaster debris from homes or businesses now takes specific license classifications plus a hazardous substance certification and HAZWOPER compliance.
- AB 1707 (signed Sept 27): electricians get immediate exam retakes, and the electrician certification program moves to the CSLB once funded.
- SB 1165 (signed Aug 17): unpaid CDTFA tax debts (sales and use tax) can now block or suspend a contractor license.
- AB 2477 (signed Sept 18): pest control companies get a provisional period for trained new hires waiting on their applicator license.
- Died: SB 784, which would have lengthened cancellation rights on contractor-arranged home improvement loans.
On this page
California’s 2025–26 legislative session is over. The Legislature’s last day to pass bills was August 31, and the Governor had until September 30 to sign or veto them — so the list below is final. Any bill that didn’t make it through is dead and won’t take effect later.
We checked every bill the Contractors State License Board (CSLB) tracked this session against the Governor’s signing announcements. Here are the ones that actually became law, what each changes, and what to do about it. Unless a bill says otherwise, new California laws take effect on January 1, 2027.
All five laws at a glance
| Bill | What it does | Who it affects | Signed | Takes effect |
|---|---|---|---|---|
| SB 342 (Umberg) | License lapse no longer forfeits all pay on public works and commercial/institutional projects | Commercial and public works contractors | Sept 30, 2026 | Jan 1, 2027 |
| SB 1263 (McGuire) | Hazardous disaster debris removal limited to specified classifications + certification | Demolition, earthwork, general contractors | Sept 27, 2026 | Jan 1, 2027 |
| AB 1707 (Davies) | Immediate exam retakes; certification moves from DLSE to CSLB once funded | Electricians and C-10 shops | Sept 27, 2026 | Jan 1, 2027; transfer later |
| SB 1165 (Caballero) | Unresolved CDTFA tax liabilities can block or suspend a license | Every licensed contractor | Aug 17, 2026 | Jan 1, 2027 |
| AB 2477 (Chen) | Provisional supervision period for trained pest control new hires | Branch 2 and Branch 3 pest control companies | Sept 18, 2026 | Jan 1, 2028 |
SB 342: a license lapse no longer wipes out your pay — on commercial jobs
The old rule: under California’s Contractors State License Law, a contractor who wasn’t licensed at all times during a job couldn’t sue to collect payment for it — and the customer could sue to get back everything already paid. A license that lapsed for a few weeks over a paperwork mistake could cost a contractor the entire job.
What changed: SB 342 (Chapter 967, Statutes of 2026) carves out specified projects — including public works of improvement and commercial or institutional construction projects. On those jobs, a contractor can collect for the work if they were licensed when the contract was signed and during the part of the work they’re billing for. The customer can only claw back what was paid for work done during the unlicensed stretch.
Residential work didn’t change. The relief applies only to the specified project types. On homes and home improvement jobs — the work most service shops do every day — the strict old rule still applies. If your license lapses mid-job, you can still lose the right to be paid for all of it. During debate, CSLB staff noted that existing law already offers a 90-day retroactive renewal for contractors who are otherwise eligible and act promptly — but don’t count on it as a safety net.
What to do: put your license, bond and workers’ comp renewal dates on a calendar with reminders 60 days out, and verify subcontractors’ licenses on the CSLB website before every job.
SB 1263: who can remove hazardous debris after a disaster
After the 2025 Los Angeles fires, the CSLB pushed to stop untrained crews from hauling ash and toxic debris out of burned neighborhoods. SB 1263 (Chapter 688, Statutes of 2026) is the result.
- Where it applies: debris removal that includes hazardous materials on residential or commercial property damaged or destroyed by a natural disaster with a declared emergency or major disaster.
- Who can do it: only contractors holding the license classifications the law specifies. As introduced, those were an A (General Engineering), a B (General Building), or both a C-12 (Earthwork and Paving) and a C-21 (Building Moving/Demolition).
- What else they need: a passed, approved hazardous substance certification exam and compliance with HAZWOPER (hazardous waste operations and emergency response) requirements.
The law doesn’t change debris removal outside declared disasters. If you’re a junk removal or hauling company that helps with cleanups after fires or floods, make sure the licensed contractor you work under meets these requirements — and don’t take hazardous debris jobs on your own.
AB 1707: electrician certification gets faster — and moves to the CSLB
California requires electricians working for C-10 electrical contractors to be state-certified. Until now, that program has run through the Labor Commissioner’s Electrician Certification Unit (part of DLSE), largely by mail. AB 1707 changes three things:
- Faster retakes: someone who fails the certification exam can immediately apply to retake it instead of waiting.
- Online processing: the bill’s author describes it as letting electricians apply for and renew certification online instead of only by mail.
- A new home: authority over electrician certification transfers from DLSE to the CSLB, contingent on the Legislature funding it and on the timelines in the bill. The CSLB has discussed a July 1, 2028 target for the transfer.
What it means for C-10 shops: new hires who miss the exam can get back on track sooner, and renewals should get less painful. Keep using the DIR Electrician Certification Program until the transfer actually happens. For how certification fits the apprentice-to-master ladder, see our guide to electrician license levels.
SB 1165: unpaid sales tax can now cost you your license
The CSLB has long been able to suspend or refuse to renew a license when a contractor ignores final tax liabilities owed to agencies such as the Franchise Tax Board and EDD. When the California Department of Tax and Fee Administration (CDTFA) took over sales and use tax programs from the Board of Equalization, the license law wasn’t fully updated. SB 1165 fixes that by adding CDTFA to those enforcement provisions.
What it means: an unresolved CDTFA liability — such as unpaid sales or use tax on materials and equipment — can now stop the CSLB from issuing, renewing, reinstating or reactivating your license, or lead to a suspension. If you have an open CDTFA balance, get on a payment plan before your next renewal.
AB 2477: a provisional period for pest control new hires
Small pest control companies have complained that new hires sit idle while waiting on their applicator license. AB 2477, signed September 18, creates a provisional supervision period for them.
- According to the Legislative Counsel’s digest, an unlicensed employee of a registered company who has applied for a Branch 2 or Branch 3 applicator license may keep applying those pesticides under the direct supervision of a licensed operator or field representative for up to 60 days.
- They first need at least 80 hours of directly supervised training, and the supervising licensee must keep documentation of the training and the license application.
- The digest says these provisions start January 1, 2028.
Fumigation (Branch 1) isn’t covered. Our pest control license guide covers the full licensing picture.
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What didn’t pass
SB 784 (Durazo), home improvement loans: this bill would have added new rules for contractor-arranged home improvement financing — including longer cancellation periods and lender confirmation calls before consumers signed. It was held in the Assembly Appropriations Committee on August 13, 2026, which ended it for the session. Current home improvement and home solicitation cancellation rules stay as they are.
Already in effect since January 1, 2026
If you haven’t caught up on last year’s changes, these are already the law, according to the CSLB’s 2026 new laws bulletin:
- AB 1327: home improvement contracts must include your email address, and buyers can cancel by email.
- AB 1002: the Attorney General and the CSLB can jointly bring civil actions to suspend, revoke or deny a license for failing to pay workers or comply with a wage judgment.
- Workers’ comp for all contractors: since January 1, 2026, every licensed contractor must carry workers’ compensation insurance unless they have no employees and file a certificate of exemption (or are organized as a joint venture). Our contractor insurance guide covers what that means for small crews.
Your 2027 checklist
- Calendar every renewal — license, bond, workers’ comp — with alerts 60 days out. On residential jobs, a lapse can still cost you the whole job.
- Clear any CDTFA balance or get on a payment plan before your next license renewal.
- Disaster cleanup work? Confirm your classifications, hazardous substance certification and HAZWOPER training before bidding.
- C-10 shops: tell new hires about immediate exam retakes and watch for the certification transfer to the CSLB.
- Pest control companies: plan your 2028 onboarding around the 80-hour training and documentation rules.
- Update your home improvement contracts with your email address and email cancellation, if you haven’t already.
The bottom line
For most small California service shops, the biggest 2027 change is what didn’t change: SB 342’s license-lapse relief skips residential work, so keeping your license current is still non-negotiable. Electricians and pest control companies get practical relief on hiring and certification, disaster cleanup gets stricter, and unpaid sales tax now carries license consequences. We’ll update this guide in January 2027, when the laws take effect and the CSLB publishes its official bulletin.
FAQ
When do California’s new contractor laws take effect?
Most take effect on January 1, 2027, the default date for bills passed in the 2026 session. AB 2477’s pest control provisions start January 1, 2028, and AB 1707’s transfer of electrician certification to the CSLB depends on funding and the timelines in the bill.
What does SB 342 change for contractors?
On public works and commercial or institutional construction projects, a contractor can now collect payment if they were licensed when the contract was signed and during the work they are billing for, even if their license lapsed at another point. Customers can only recover what they paid for work done while the contractor was unlicensed.
Does SB 342 apply to home improvement or residential work?
No. SB 342 covers specified project types, including public works and commercial or institutional construction. For residential and home improvement work, the old rule still applies: a contractor who was not licensed at all times during the job can lose the right to be paid for it.
Who can remove debris after a disaster in California?
Under SB 1263, removing debris that includes hazardous materials from homes or businesses damaged by a declared natural disaster requires specified license classifications (as introduced, an A, a B, or both a C-12 and a C-21), a passed hazardous substance certification exam, and HAZWOPER compliance.
What does AB 1707 mean for California electricians?
Electricians who fail the certification exam can immediately apply to retake it, and the author describes the bill as moving applications and renewals online. It also transfers the electrician certification program from the Labor Commissioner’s office to the CSLB once the Legislature funds the move.
Can the CSLB suspend my license for unpaid sales tax?
Yes. SB 1165 adds the California Department of Tax and Fee Administration to the CSLB’s outstanding-liability rules, so an unresolved CDTFA liability can block issuing, renewing, reinstating or reactivating a license, or lead to a suspension.
What did AB 2477 change for pest control companies?
Starting January 1, 2028, according to the Legislative Counsel’s digest, a new hire who has completed at least 80 hours of supervised training and applied for a Branch 2 or Branch 3 applicator license can keep applying pesticides under direct supervision for up to 60 days, with documentation kept by the supervising licensee.
Did the home improvement loan cancellation bill pass?
No. SB 784, which would have added rules for contractor-arranged home improvement loans and longer cancellation periods, was held in the Assembly Appropriations Committee on August 13, 2026, and did not become law.
Sources: Office of the Governor legislative updates of Sept 30, Sept 27, Sept 18 and Aug 17, 2026; bill text and status at SB 342, SB 1263, AB 1707, SB 1165, AB 2477 and SB 784 (California Legislative Information); CSLB September 2026 board agenda; CSLB 2026 new laws bulletin; chaptered summaries via CalMatters Digital Democracy. This is general information, not legal advice — confirm details with the CSLB or an attorney.
