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On November 1, 2014, the Contractors State License Board (CSLB) submitted its Sunset Review Report to the Legislature. Among other things, the Sunset Review Report highlights select CSLB achievements. It also includes a list and summary of the legislation sponsored by the CSLB from 2011 through 2014, and urges the Legislature and Administration to support efforts to modernize and streamline laws and regulations related to contracting in California to help ease complicated requirements for contractors and confusing language that prevents consumers from making informed choices. Of particular interest, several table summarize licensee-related data, including Table 6 – Licensee Population, Table 7A – Licensing Data by Type, and Table 7b – Total Licensing Data. Section 4 further responds to questions about the CSLB’s licensing program.

The CSLB’s previous sunset review was conducted in 2011; California Senate Bill 543 (Steinberg, Chapter 449, Statutes of 2011) extended CSLB’s sunset date from January 1, 2012 to January 1, 2016.

Additional Resource: California Department of Consumer Affairs, Contractors State License Board Sunset Review (November 2014)

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Congratulations Steve Thornton! Jose Rodriguez, Assistant Director for Field Services and Public Safety for the Washington State Department of Labor & Industries (the “Department”), announced in the Electrical Currents newsletter from the Office of the Chief Electrical Inspector, Vol. 18, No. 11 (Nov. 2014), the appointment of Stephen Thornton as the new Chief Electrical Inspector, effective October 16, 2014.

According to Jose, Steve has worked for the Department for 20 years, working as an Electrical Inspector, with the last 17 years serving as an Electrical Inspection Supervisor since July 1996. Congratulations and thank you for your service!

Additional Source: Chief Electrical Inspector for WA Department of Labor & Industries Stepping Down; California Looking For Next Registrar of Contractors

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In a recent press release, California Contractors State License Board Registrar Steve Sands reminds contractors that “[c]ontractor licenses are not transferrable between anyone: associates, friends – family members included.” In California, all home improvement jobs valued at $500 or more, which includes both labor, material costs and other item costs combined, are required to be performed by a person or entity that is properly licensed by the CSLB. The licensee is responsible for the work performed under its contractor’s license number being done in all material respects in accordance with accepted trade standards for good and workmanlike construction. If it is not, it is exposed to disciplinary action by the CSLB, which could include a civil penalty and/or citation, among other things. It is also responsible for maintaining the appropriate bond (Cal. Bus. & Prof. Code § 7071.6) and workers’ compensation insurance (Cal. Bus. & Prof. Code § 7071.6).

Moreover, California Bus. & Prof. Code § 7068.1 requires the licensee’s qualifier (e.g., the responsible managing employee (RME), officer (RMO), or manager/member (RMM)) to be responsible for exercising that “direct supervision and control of his or her employer’s or principal’s construction operations” to secure compliance with the Contractors’ State License Law, Bus. & Prof. Code §§ 7000 et seq. A violation of Section 7068.1 comes with a hefty civil penalty and the possibility of a criminal penalty. Subdivision (e) of Section 7068.1 contemplates that it “shall constitute a cause for disciplinary action and shall be punishable as a misdemeanor by imprisonment in a county jail not to exceed six months, by a fine of not less than three thousand dollars ($3,000), but not to exceed five thousand dollars ($5,000), or by both the fine and imprisonment.” The CSLB recently warned license qualifiers that, “[w]ith consumer risk in mind, CSLB is aggressively and stringently taking enforcement actions against those involved in this trend [of not properly supervising work that is being performed]… .”

Additional Source: CSLB, Watch Out for Contractor’s Who Try to ‘Share’ a License

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Yesterday, Pillsbury attorneys Michael Hindus, Eric Save and John McNeece published their advisory titled Mexico’s Guidelines for Clean Energy Certificates Will Support Renewable Energy Development. The Advisory discusses, as part of a historic restructuring of its electrical power sector, Mexico’s creation of a market for tradable Clean Energy Certificates, which many industry participants will be required to obtain. Draft guidelines proposed by the Mexican Ministry of Energy set forth the criteria for granting these clean energy certificates, a framework for buying and selling them, and a procedure for establishing the obligations of market participants to obtain the certificates. Final guidelines will be issued shortly.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Michael Hindus, Eric Save or John McNeece, the authors of this blog.

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On October 24, 2014, the D.C. Circuit rejected a challenge to the revised OSHA Hazardous Communication Standard insofar as it applies to “combustible dust”. The case is National Oilseed Processors Association, et al., v. Occupational Safety & Health Administration, et al. The Standard was substantially revised in 2012 to conform with the Globally Harmonized System, a uniform international chemical labeling system. The Hazard Communication, 77 Fed. Reg. 17,574 (Mar. 26, 2012) (“Final Rule“) designated “combustible dust” as a hazardous chemical subject to the Standard, although OSHA has yet to develop a workplace standard addressing the hazards of combustible dust in the workplace. This decision may be of interest to all manufacturers and employers subject to the Hazard Communication Standard; it places in context the development of the rule over the past 30 years, and demonstrates again how difficult it is to have such rules overturned.

The National Oilseed Processors Association includes in its membership the owners and operators of grain handling businesses who have a keen interest in this new standard. The Association argued, and the court rejected, contentions that it was not provided adequate notice of the inclusion of combustible dust in the rule, that OSHA’s decision was not supported by substantial evidence as the statute requires, and that their constitutional Due Process rights were violated in that the agency, by failing to define “combustible dust”, did not provide fair warning of the agency’s enforcement measures.

Additional Sources: OSHA Fact Sheet Hazard Communication Standard Final Rule

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On July 16, 2014, the U.S. District Court of the District of Maryland issued an important Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq. (RCRA), ruling in the case of Sherrill, et al. v. The Mayor and the City Council of Baltimore, 2014 WL 3555956. The City of Baltimore has taken steps to revive and remediate a waterfront property that was the site of a former chemical manufacturing plant. It is conceded that spills and releases of hazardous substances and hazardous wastes have contaminated the site, but the City has entered into an agreement with a casino operator to construct a casino on the property. The matter has been very controversial, causing the plaintiffs in this lawsuit to file a citizen suit under Section 6972 of the RCRA alleging that contaminants are migrating off the property and polluting adjacent properties.

The site was placed by the city into Maryland’s Voluntary Cleanup Program, which required that the City develop adequate cleanup plans. The owner and operator of the proposed casino agreed to take over some of the cleanup operations, and has in fact undertaken waste extraction and removal actions. In connection with the cleanup, the casino operator also ensured that any storm water wastewater discharges were covered by the Maryland General Construction Storm Water Permit, which incorporated the cleanup plans.

The District Court held that this Clean Water Act (CWA) storm water discharge permit triggered the “anti-duplication” provisions of the RCRA and therefore shielded the casino operator from any RCRA liability, and these claims were dismissed. In addition, the claims against the City of Baltimore and the owner of the former chemical plant were also dismissed because the court held that those allegations were insufficiently pled. In effect, this decision expands the CWA permit shield to allegations of RCRA violations.

An appeal has been filed with the 4th Circuit.

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The Texas Commission of Licensing and Regulation’s (Commission) recently amended the existing rules governing air conditioning and refrigeration contractor applicable codes, 16 Tex. Admin. Code, Chapter 75, § 75.110. Revised Section 75.110 states:

“(a) The commission adopts the following as the applicable codes as referenced in the Act and this chapter: (1) 2009 edition of the Uniform Mechanical Code; and (2) 2009 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.
(b) The 2009 codes will be in effect through December 31, 2014. All air conditioning and refrigeration work permitted or started prior to January 1, 2015, may be completed in accordance with the 2009 code editions.
(c) The commission adopts the following as the applicable codes as referenced in the Act and this chapter: (1) 2012 edition of the Uniform Mechanical Code; and (2) 2012 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.
(d) The 2012 codes will be effective January 1, 2015.” (Emphases added).

The Texas Department of Licensing and Regulation (Department) drafted and distributed the proposed rules to persons internal and external to the agency and published them in the April 11, 2014, issue of the Texas Register (39 Tex. Reg. 2735). Prior to the deadline for public comments (May 12, 2014), the Department received four public comments regarding the proposed rules. The public comments and the Department’s response to the public comments are available in its Justification for Administrative Rule Adoption.

The Department also recently lowered the number of hours of instruction on state laws and rules required annually from 2 hours to 1 hour, effective for licenses that expire on or after June 1, 2014. The total number of continuing education hours required annually, however, will remain at 8 hours. The other 7 hours of instruction must be courses taken in one or more of the following subjects: (1) Texas Occupations Code, Chapter 1302, Air Conditioning and Refrigeration Contractors; (2) Title 16, Texas Administrative Code, Chapter 75, Air Conditioning and Refrigeration Administrative Rules; (3) The International Mechanical Code, the Uniform Mechanical Code, or other applicable codes; (4) Ethics; (5) Business practices; or (6) Technical requirements. Continuing education courses must be completed within the term of the license being renewed. The continuing education courses must have been taken within the term of the license to be renewed, e.g., if the license expires on December 15, 2013, the continuing education courses must have been taken between December 15, 2012 and December 15, 2013.

Additional Source: Texas Department of Licensing and Regulation, Justification for Administrative Rule Adoption, Air Condition and Refrigeration Contractors; Texas Department of Licensing and Regulation, Air Conditioning and Refrigeration Contractors Continuing Education

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The practice of including an arbitration provision in all types of contracts has become quite common. Including such a provision in a contract should, however, always be a considered choice, based on sound advice, to avoid any misunderstandings about the breadth, scope and consequences of including such a provision. Yesterday, Pillsbury attorney Ray Sweigart published his client advisory titled About that English Law and Arbitration Clause: Consider enforcement implications before signing. In the Advisory, he discusses the practice, in international commercial contracts, parties with no operations or other relationship to England or the United Kingdom specifying English law as controlling, with a clause providing for arbitration of disputes in London. In Cruz City v Unitech & Ors, [2014] EWHC 3131 (Comm), the English High Court was faced with a dispute over enforcement of an arbitral award between a Mauritian claimant and an Indian defendant. Noting the English law policy that judgments of the English court and English arbitration awards should be complied with, and under the principles set out in Masri v Consolidated Contractors International (UK) Ltd (No 2), [2008] EWCA Civ 303, the court held that it was appropriate to enforce an arbitral award by the appointment of receivers over the foreign defendant’s assets.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Ray Sweigart, the author of this blog.

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The Joint Board of Licensure and Certification, State of New Hampshire compiled a list of the most common electrical installation deficiencies in the State of New Hampshire in 2014, formatted to the 2014 edition of the National Electrical Code (NFPA 70-2014) as follows:

  • Use of electrical equipment without following the manufacturer’s instructions, including installation and securing of expansion fittings in runs of Rigid Polyvinyl Chloride (PVC) Conduit and improper tightening of electrical connections
  • Inadequate clearances: working space, clear spaces, headroom and dedicated equipment space
  • Improper sealing of underground raceways
  • Improper grounding of electrode system
  • Bonding of metal water piping in the vicinity of separately derived systems
  • Wireways and consideration of 310.15(B)(3)(a)
  • Improper use of NM cable in other structures permitted to be Types III, IV or V construction
  • Improper installation of exposed vertical risers from fixed equipment
  • Improper use of Flexible Cords and Cables, Article 400
  • Failure to use weather-resistant outdoor receptacles
  • Inadequate mounting height of switches
  • Failure to use proper methods for circuit directories and circuit Identification
  • Improper connection of septic pumps
  • Failure to comply with signage requirements
  • Lack of separation of Emergency System Conductors from other conductors
  • Misunderstanding of the requirements for the installation of branch circuits supplying emergency lighting

Additional Source: Electrical Licensing Concerns And Commonly Found Installation Deficiencies in the State of New Hampshire 2014

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On October 13, 2004, California Governor Edmund G. Brown Jr. appointed Susan Granzella of Sacramento as a new (public) member of the California Contractors State License Board. Prior to the appointment, according to the Governor, Granzella “held several positions at Visa Inc. from 1996 to 2014, including senior director and vice president for technical documentation and audit and compliance coordination for global development.” The CSLB further noted that, in the latter role, Granzella “oversaw Visa’s technical writing and publishing efforts, distributing content internationally to banks and processors, and managed staff in both the United States and India.” Registrar of Contractors Steve Sands swore in Ganzella on October 21, 2014, and her term continues through June 1, 2016. With Granzella’s appointment, there remains only one vacancy on the 15-member Board. Congratulations and welcome!

Additional Information: CSLB, Industry Bulletin # 14-16 (Oct. 22, 2014).