California’s legislature recently approved a Contractors State License Board fee increase effective on January 1, 2022. This is the first statutory fee increase since 2017 and was approved because of increased operating costs. The fee increases are the result of a study performed by a private consultant to establish CSLB’s actual cost of performing the services associated with the fees.

CSLB, which is funded entirely by license fees, protects consumers and supports the California construction industry by licensing contractors, providing resources for licensees, enforcing contractor laws, and educating consumers on the importance of hiring licensed contractors.

In addition to reorganizing CSLB’s statutory fee schedule and adding one new fee to change a license business name, the following should be noted about the legislative bill that makes these changes:

• Initial license and renewal fees are now divided by entity type (sole owner, corporations, partnerships, joint ventures, and limited liability companies).

• The $450 active license renewal fee for sole ownerships is not being increased in 2022.

The decision to raise fees is not made lightly, and in recent years CSLB has taken multiple measures to reduce costs. Unfortunately, CSLB cannot further reduce the expenditures that support the licensing and enforcement programs without negatively affecting its ability to process applications in a timely manner and to quickly mediate or investigate consumer complaints.

This fee increase will ensure that CSLB continues to be effective in regulating the construction industry in California.