2015 California Construction Law Update

2015

Over 2,200 bills were introduced during the second and final year of the 2013-2014 legislative session, of which 931 were signed into law.

For the design and construction industry the end of the second session, like the end of the first session, saw a number of new prevailing wage bills signed into law which again reflected the strong Democratic majorities in both the Assembly and Senate. The end of the second session also saw the enactment of laws consolidating several existing design-build authorization sections and extending the 5% cap on retention for public works projects.

Contractors

SB 315 — Makes four changes: (1) Expands the authority of CSLB enforcement representatives to issue written notices to appear in court; (2) Authorizes unlicensed contractors to advertise for construction work if the aggregate contract price is less than $500 and the unlicensed contractor discloses in the advertisement that he or she is unlicensed; (3) Clarifies that a person contracting with a suspended license due to an outstanding tax or civil liability is subject to the same disciplinary action as a person contracting without a license; and (4)  Requires the CSLB to initiate disciplinary proceedings against licensed contractors within 180 days of notification from the California Labor Commissioner of a finding of a willful or deliberate violation of the Labor Code.

Licensing

AB 2396 – Prohibits the CSLB from denying an applicant a license based solely on a conviction that has been dismissed.

SB 1159 – Requires the CSLB, no later than January 1, 2016, to require an individual applicant to provide his or her tax identification number or social security number.

Prevailing Wages

AB 26 – Revises the definition of “construction” to include work performed during post-construction phases, including, but not limited to, cleanup work at a jobsite for purposes of the payment of prevailing wages.

AB 1870 – Existing law requires that contractors on public works projects contribute to the State Apprenticeship Council the prevailing amount of apprenticeship training contributions in the area of the public works site. This bill would require, in the event that there are two or more approved multi-employer apprenticeship programs serving the same craft or trade and county for which training contributions are made, that the grant be divided among those programs based on the number of apprentices from that county registered in each program.

AB 1939 – Authorizes a contractor to bring an action to recover from a hiring party any increased costs, including labor costs, penalties, and legal fees incurred as a result of a decision by the Department of Industrial Relations, the Labor and Workforce Development Agency, or a court that classifies the work covered by the project as a public work.

AB 2272 – Revises the definition of “public works” to include projects funded by the California Advanced Services Fund (CASF) for purposes of the payment of prevailing wages.

AB 2744 – Existing law provides that when a  contractor on a public works project is found to have violated the prevailing wage laws with intent to defraud, or within a 3-year period of having committed 2 or more separate willful violations of these provisions, the contractor is ineligible to bid on, be awarded, or perform work as a contractor on a public works contract for specified periods of time. This bill would expand these provisions to the employment of apprentices.

SB 266 – Tolls the period in which the Director of Industrial Relations may issue a wage assessment for the period of time required by the Director to determine whether a project is a public work project including any administrative appeal. Requires public entities to furnish the Labor Commissioner, within 10 days after receipt of a request from the Commissioner, with a copy of a notice of completion or other document evidencing the public entity’s acceptance of the project, or if at the time of the request no notice of completion has been recorded and no other document exists evidencing the public entity’s acceptance of the project, to notify the Commissioner and furnish copies of such documents within 10 days after a notice of completion is recorded or the public entity accepts the project.

 Public Works Projects

AB 155 – Authorizes the Monterey County Water Agency, provided they enter into a project labor agreement, to award a design-build contract for the design and construction of a project to connect Lake San Antonio and Lake Nacimiento with an underground tunnel or pipeline for the purpose of maximizing water storage, supply, and groundwater recharge.

 AB 1179 – Authorizes the Department of Resources Recycling and Recovery, when awarding grants pursuant to the state’s tire recycling program, to award grants for public works projects to create parklets and/or greenways that use tire-derived products and requires the Department, if it awards those grants, to give priority for funding to those projects in disadvantaged communities.

AB 1581 – Requires that lease-leaseback contracts under the Leroy F. Greene School Facilities Act of 1998 require that prime contractors and electrical mechanical plumbing contractors complete a pre-qualification questionnaire and financial statement.

AB 1650 – Establishes the Fair Chance Employment Act which requires a person submitting a bid for a state contract involving onsite construction-related services to certify that they will not ask a job applicant to disclose information concerning his or her conviction history on or at the time of an initial employment application except where otherwise required by state or federal law,  any contract position with a criminal justice agency, or to the extent that he or she obtains workers from a hiring hall pursuant to a bona fide collective bargaining agreement.

AB 1705 – Extends from January 1, 2016 to January 1, 2018 the sunset date for public entities to withhold more than 5% retention on public works projects upon a finding that the project is more “substantially complex” than those involving regular or routine work. Revises existing law to now require that such “complex” findings be disclosed in a public entity’s bid documents together with the retention amount.

AB 2376 – Existing law authorizes the Director of General Services to establish a master builders’ risk insurance program for all state construction projects during construction. This bill would require the contractor’s deductible under a master policy to be outlined in the request for bids or proposals.

AB 2355 – Requires local agencies with jurisdiction over a street or highway to either adopt the standards developed by the Department of Transportation for recycled paving materials and for recycled base, subbase and previous backfill materials or set forth findings as to why such standards are not being adopted.

AB 2377 – Requires a local agency that has jurisdiction over a street or highway, no later than January 1, 2017, to (1) either adopt the standards developed by the Department of Transportation for recycled paving materials and for recycled base, sub-base, and pervious backfill materials, or (2) discuss at a regularly scheduled public hearing of the local agency’s legislative or other governing body why the standards are not being adopted.

SB 268 – Authorizes the Last Frontier Health Care District to utilize design-build for building and improvements directly related to hospital or health facilities at the Modoc Medical Center.

SB 502 – Existing law requires the Regents of the University of California to let any contract for a project to the lowest responsible bidder unless the Regents are of the view that a project of $100,000 or less does not require competitive bidding. This bill will raise the dollar threshold to $640,000 but will require that the Regents establish a procedure to qualify and rate a bidder for work to be awarded in excess of $300,000 but less than $640,000. The bill will also require each campus or facility to post a brief description of the project, the awarded amount, and contractor’s name.

SB 785 – Repeals and consolidates seven design-build authorization sections affecting state and local public agencies into new Public Contract Code sections 10187 (applicable to state public agencies) and Section 22160 (applicable to local public agencies) through January 1, 2025. Also authorizes the Sonoma Valley Health Care District and Marin Healthcare District to utilize design-build.

SB 854 – Requires contractors and subcontractors to register with the Department of Industrial Relations in order to bid or perform work on a state or local public works project.

SB 876 – Existing law requires the Regents of the University of California to advertise for bids in a newspaper of general circulation. This bill authorizes the Regents to advertise for bids in a newspaper of general circulation, trade publication or electronically on the website of the university.

SB 1433 – Extends from January 1, 2015 to January 1, 2017 the sunset date for transit operators to enter into design-build contracts.

Miscellaneous

AB 1937 – Requires a gas corporation to provide not less than 3 working days notice to a school or hospital prior to undertaking nonemergency excavation or construction of a gas pipeline when the work is located within 500 feet of the school or hospital.

AB 1634 – Prohibits Cal OSHA from granting for serious violations, abatement or credit for abatement unless the employer has abated the violation or has submitted a statement to the division in accordance with existing law, and would additionally require supporting evidence with the statement where necessary. The bill would authorize the division to grant such a modification only if the violation has been abated or the signed statement and supporting evidence is received within 10 working days after the end of the period fixed for abatement.

11 Responses to “2015 California Construction Law Update”

  1. Emily

    Thanks for the information. It’s great to have it all in one place. I’m not in the construction industry, but my company does work closely with construction companies, as we provide temporary offices for job sites in Southern California. http://www.goldenofficetrailers.com

    Reply
  2. Charlene Benoy

    Garret,
    I really appreciate all of your blog posts. I am very new to the Construction Industry so it is so nice to have these little tid bits of information. I do have a quick question about SB 854. Do land surveyors need to register as well?

    Reply
    • Garret Murai

      Hi Charlene. Thanks for reading. I do not believe land surveyors need to register under the new registration requirements under SB 854.

      The registration requirements only apply to “contractors” and “subcontractors,” and contractors (and subcontractors) are licensed by the California Contractors State License Board, whereas, land surveyors are as you know licensed by the California Board of Professional Engineers, Land Surveyors and Geologists.

      Just to be safe though you might want to double check with the California Department of Industrial Relations who is overseeing the registration program, as the program is still in its infancy, and they are the last word.

      Reply
  3. andres

    Dear friends,

    I have been working as a handyman for the last 12 years, and I would like to know if I apply for SB1159 to get a general contractor license the signature of one of my customers would be accepted as a prove of experience; also have several certificates from NOCROP.

    Hope to hear soon from you.

    Andres.

    Reply
    • Garret Murai

      Hi Andres. As you likely are aware, to obtain a California contractor’s license you need to satisfy the work experience requirement, among other requirements. The work experience requirement requires that you have four years of journey-level experience or higher within the 10 years immediately preceding your application for a contractor’s license. You can get educational credit to satisfy up to three of the four years. I don’t believe, however, that your experience as a handyman would satisfy the journey-level experience or higher, although if you took an apprenticeship through NOCROP, it might.

      Reply
  4. May-chi Yuan

    I have a question here regarding the change of construction retention rate on Jan. 1, 2016. How do I handle a new change order in 2016 for a prior to 2016 PO? Should I withhold 5% or 10% for the retention on the change order?

    Reply
    • Garret Murai

      Hi May-chi. I’m not aware of any new California construction retention laws that went into effect on January 1, 2016. A few years ago SB 293 was enacted which became effective on January 1, 2012. Under SB 293, a new Public Contract Code section 7201 was enacted which precluded public agencies from withholding more than 5% retention on California public works projects subject to certain exceptions. The law was to sunset on January 1, 2016, but in 2015, AB 1705 was enacted which extended the sunset date until January 1, 2018. Also, as mentioned, SB 293, AB 1705, and Public Contract Code section 1701 only apply to California public works projects not private works projects, in which there is no current retention cap. If you can let me know what new law you’re referring to I can take a look at it, but as I mentioned, I’m not aware of any new California construction retention laws which went into effect on January 1, 2016.

      Reply
  5. May-chi Yuan

    Garret,
    Thank you for the info. It is most helpful on our public work projects. We are a CA Special District and apparently we lack the knowledge of the latest update of the CA construction law.

    I guess I can postpone my question of changing of the retention rate until 2018 now. The thing is sometimes we have an existing PO which was created at a different retention rate than a new change order for that PO. In the example above, if the old PO was created with the 5% retention rate law and then years later we have a change order for that PO but the retention rate has become 10%. How much shall we withhold retention on the change order, 5% or 10%?

    Reply
    • Garret Murai

      Hi May. There are a couple of possible scenarios here. The first is if the contract sets forth the retention rate. If it does, then that should be the retention rate for the project, and would mostly continue to be, even if the law changes. For example, the 5% cap on retention on public works projects that was enacted a few years ago states that it would only apply to contracts entered after a certain date. As such, for contracts entered into, say the year before the new law, the new law wouldn’t apply to those contracts even for change orders entered after the new law was enacted because the law only applies to contracts entered into after a certain date. The second scenario is where a contract does not address retention at all. In such a situation there would be no right to withhold retention. But, and this is a big “but,” if the parties start to withhold retention even through the contract says nothing about retention, one party (who would likely be the party withholding the retention) could argue that by course of dealing the parties impliedly amended the contract to allow for the withholding of retention. The lesson here is: follow the contract.

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Basic HTML is allowed. Your email address will not be published.

Subscribe to this comment feed via RSS

%d bloggers like this: