Gravel2Gavel Construction & Real Estate Law Blog
There are numerous contractor-related bills making their way through the California legislature this year. The following bills, although not an all-inclusive list, are worth noting:
Assembly Bill 44 – An Act to amend, repeal, and add Public Contract Code § 4104 relating to public contracts – signed into law by the Governor September 9, 2013 and operative July 1, 2014. The Subletting and Subcontracting Fair Practices Act, Cal. Public Contracting Code §§ 4100, et seq., requires an entity taking bids for the construction of any public work or improvement to specify that any person making a bid or offer to perform the work to, in his or her bid or offer, include specified information, including the name and location of the place of business of each subcontractor who will perform work or labor or render service to the prime contractor in or about the work or improvement. Commencing on July 1, 2014, any person making a bid or offer to perform the work to, in his or her bid or offer, will be required to include the California contractor license number of each subcontractor.
Assembly Bill 186 – An Act to add Business & Professions Code § 115.6 relating to professions and vocations, and making an appropriation therefore. As currently drafted, among other things, AB 186 would establish a temporary licensure process for an applicant who holds a current license in another jurisdiction, as specified, and who supplies satisfactory evidence of being married to, or in a domestic partnership or other legal union with, an active duty member of the Armed Forces of the United States who is assigned to a duty station in California under official active duty military orders. The temporary license would expire 12 months after issuance, upon issuance of the expedited license, or upon denial of the application for expedited licensure by the board, whichever occurs first.
Assembly Bill 433 – An Act to amend Business & Professions Code §§ 7026.12 and 7057, to add and repeal Business & Professions Code § 7026.13, and to add Health & Safety Code § 13110 relating to contractors. As currently drafted, among other things, AB 433 would authorize, until January 1, 2017, the installation of a residential fire protection system for a one- or 2-family dwelling by a contractor holding a fire protection contractor classification or a plumbing contractor classification.
Assembly Bill 811 – An Act to amend Government Code § Section 4216.6 relating to excavations – signed into law by the Governor September 6, 2013 and operative January 1, 2014. The new law requires statewide information, as defined, provided by operators and excavators regarding facility events, as defined, to be compiled and made available in an annual report by regional notification centers and posted on the Internet websites of those regional notification centers.
Assembly Bill 972 – An Act to amend Labor Code §§ 108.2 and 1776 relating to employment records. As currently drafted, among other things, AB 972 would require payroll records for projects that use an electrician to include the electrician’s state certification number.
Assembly Bill 993 – An Act to amend Business & Professions Code § 7085.5 relating to contractors. Existing law authorizes an arbitrator to grant any remedy or relief deemed just and equitable and within the scope of the Contractor State License Board’s (CSLB) referral to the arbitrator and the requirements of the board, including costs and expenses. As currently drafted, among other things, AB 993 would provide that a party that submits a dispute to arbitration waives any right to recover attorney’s fees or to challenge an arbitrator’s award of attorney’s fees in a civil action related to the dispute.
Assembly Bill 1114 – An Act to amend Business & Professions Code § 7157 relating to contractors. Existing law prohibits a salesperson or contractor’s agent from accepting compensation of any kind for, or on account of, a home improvement transaction, or any other transaction involving a work of improvement, from a person other than the contractor whom he or she represents with respect to the transaction, and from making a payment to any person other than his or her employer on account of the sales transaction. The law also prohibits a contractor from paying, crediting, or allowing any consideration or compensation of any kind to any other contractor or salesperson other than a licensee for, or on account of, the performance of a work of improvement or services, including, but not limited to, home improvement work or services, except as specified. As currently drafted, among other things, AB 1114 would delete the latter provision prohibiting contractors from paying, crediting, or allowing any consideration or compensation.
Assembly Bill 1236 – An Act to amend Business & Professions Code § 7071.19 relating to contractors – signed into law by the Governor August 16, 2013 and operative January 1, 2014. Existing laws authorizes the CSLB to issue a contractor’s license to a limited liability company, but requires, as a condition precedent to the issuance, reissuance, reinstatement, reactivation, renewal, or continued valid use of a limited liability company contractor’s license, that the applicant or licensee file or have on file a surety bond for damages arising out of specified claims of employees. It also requires the limited liability company to maintain a policy or policies of insurance against liability imposed on or against it for damages arising out of claims, as specified, as a condition of licensure, and the policy or policies of insurance secured to satisfy these provisions are required to be written by an insurer or insurers duly licensed by this state. Under the new law, those policies may be written by an eligible surplus line insurer, as specified.
Senate Bill 261 – An act to amend Business & Professions Code § 7114.2 relating to contractors – signed into law by the Governor August 27, 2013 and operative January 1, 2013. Existing law authorizes the CSLB to issue a citation, instead of initiating disciplinary proceedings, to a licensee when the CSLB has probable cause to believe that the licensee has committed acts in violation of the contractors’ State License Law, Business & Professions Code §§ 7000, et seq. In addition, under existing law, any person who willfully and intentionally uses, with intent to defraud, a contractor’s license number that does not correspond to the number on a currently valid contractor’s license held by that person, is guilty of a crime, and the CSLB may issue a citation to an unlicensed individual who is in violation of that provision, including an order of abatement and a civil penalty. Under the new law, any licensed or unlicensed person who commits any of those specified activities with respect to a contractor’s license is subject to the administrative remedies authorized by the Contractors’ State License Law.
Senate Bill 262 – An act to amend Business & Professions Code § 7068.1 relating to contractors – signed into law by the Governor August 27, 2013 and operative January 1, 2013. Existing law authorizes an applicant for contractor’s license to qualify the applicant’s knowledge and experience with a responsible managing officer (RMO), employee (RME), member, or manager who has certain qualifications. The license qualifier is responsible for exercising direct supervision and control of his or her employer’s or principal’s construction operations as necessary to secure full compliance with the Contractors’ State License Law and CSLB’s regulations relating to construction operations. Under the new law, among other things, instead, make the qualifying person responsible for exercising that direct supervision and control to secure compliance with that law and those regulations. A violation of these provisions is grounds for disciplinary action, and a misdemeanor punishable by imprisonment in a county jail not to exceed 6 months, by a fine of not less than $3,000, but not to exceed $5,000, or by both that imprisonment and fine.
Senate Bill 263 – An Act to amend Business & Professions Code § 7028 relating to contractors. Existing law makes it a misdemeanor for a person to engage in the business or act in the capacity of a contractor without having a license, unless the person is particularly exempted. As currently drafted, among other things, SB 263 would provide that, unless exempted, it is a misdemeanor for a person to engage in the business or act in the capacity of a contractor if the person either has never been licensed pursuant to the Contractors’ State License Law, or the person was a licensee, but performed acts covered by the law under a license that was inactive, expired, revoked, or under suspension for any reason failure to pay a civil penalty or comply with an order of correction, or failure to resolve all outstanding final liabilities, as specified.
Senate Bill 417– An Act to amend Business & Professions Code § 7018, to add Government Code § 15810 and to add Public Contract Code §§ 10142 and 20103 relating to public building and works. The State Contract Act, Cal. Public Contract Code §§ 10100, et seq., and the Local Agency Public Construction Act, Cal. Public Contract Code §§ 20100, et seq., generally set forth the authority and duties of state and local agencies for bidding and awarding contracts on public works. Among other things, they authorize a state or local agency to require that each prospective bidder for a public works contract complete and submit to the state or local agency a standardized questionnaire and financial statement, as provided. In addition, the State Building Construction Act of 1955 authorizes the State Public Works Board to acquire and construct public buildings for use by state agencies, when authorized by a separate act or appropriation enacted by the Legislature. As currently drafted, among other things, SB 417 would authorize state and local agencies subject to these Acts, prior to advertising for bids for construction of a public building or a public works project, to advise the CSLB of any supplemental license, certification, or education required of a contractor to qualify to bid on the contract for that project. It would require the CSLB to review the information received regarding any supplemental license, certification, or education requirements, and to post any supplemental requirements it approves in an easily identifiable location on the CSLB’s website. Any supplemental requirements that are not posted on the CSLB’s website before the bid opening would not apply to the bidding process for that contract.
Senate Bill 822 – An Act to amend Business & Professions Code §§ 5096, 5096.2, 5096.12, 7026.1, 7065.3, 7114, 7141, 7206, 7210, 7887, 9807, and 17914, to add Business & Professions Code § 7851, to repeal Business & Professions Code §§ 102.1 and 102.2, and to amend Health & Safety Code § 44011 relating to professions and vocations, and making an appropriation therefor. As currently drafted, among other things, SB 822 would provide that the term “contractor” or “consultant” does not apply to a common interest development manager, and a common interest development manager is not required to have a contractor’s license when performing management services, as defined.