2016 California Construction Law Update

The California State Legislature saw the introduction of 2,297 bills during the first half of the 2015-2016 legislative session of which 1,010 bills were signed into law.

For contractors, the bill (now law), having the most immediate effect is SB 467, which increases the license bond amount required of all contractors from $12,500 to $15,000. In addition to licensing changes, 2015 saw the enactment of a number of bills providing for alternative project delivery methods from design-build, to CM at risk, to public-private partnerships, and even the expanded use of enhanced infrastructure financing districts as the state enters its fourth year since the abolishment of redevelopment agencies.

Licensing

SB 467 – Removes the requirement that contractor license applicants prove they have $2,500 in working capital as a condition of issuance of a contractors license and increases the amount of the license bond all contractors are required to post from $12,500 to $15,000. More information can be found here.

SB 560 – Expands the jurisdiction of the Contractors State License Board’s enforcement division to issue notices to appear in court if a contractor fails to carry workers’ compensation insurance when required.

SB 561 – Streamlines the home improvement salesperson registration process by eliminating the requirement that home improvement salespersons register separately for each contractor in which they are employed. More information can be found here.

Prevailing Wages

AB 219 – Expands the application of the prevailing wage laws to the hauling and delivery of ready-mixed concrete to state and local public works projects effective July 1, 2016.

AB 852 – Expands the application of the prevailing wage laws to the construction, alteration, demolition, installation or repair of done under private contract for general acute care hospitals, except rural general acute care hospitals with a maximum of 76 beds, when the project is funded in whole or in part with conduit revenue bonds issued on or after January 1, 2016.

Project Delivery

SB 63 – Authorizes the use of enhanced infrastructure financing districts for seaport and harbor projects.

AB 1171 – Authorizes regional transportation agencies to use the construction manager/general contractor project delivery method for the design and construction of certain expressways that are not on the state highway system.

AB 1185 – Establishes a pilot program authorizing the Los Angeles Unified School District to use a best value procurement method for bid evaluation and selection for public works projects that exceed $1 million through December 31, 2020.

AB 1290 –  Authorizes the Mayers Memorial Hospital District to use the design-build project delivery method for improvements at the Mayers Memorial Hospital.

AB 1358 – Removes, effective July 1, 2016, the $2.5 million minimum threshold for school districts to use the design-build project delivery for school projects, and replaces it with a lower $1 million minimum threshold through January 1, 2025.

AB 1431 – Expands the use of job order contracting, which was formerly limited to the Los Angeles Unified School District, to all school districts that: (1) have entered into project labor agreements; (2) for school projects in excess of $25,000, through January 1, 2022.

SB 374 – Authorizes the San Diego Association of Governments to use the design-build project delivery method for public works projects adjacent, or physically of functionally related, to transit facilities developed by the association.

SB 562 – Authorizes the City of Long Beach to use the public-private procurement method to revitalize and redevelop the Long Beach Civic Center.

SB 762 – Establishes a pilot program authorizing the the Counties of Alameda, Los Angeles, Riverside, San Bernadino, San Diego, Solano and Yuba to select bidders on the basis of best value for public works projects in excess of $1 million.

Public Works

AB 323 – Extends, from January 1, 2016 through January 1, 2020, the exemption of repairs, maintenance, or minor alterations to existing roadways by cities and counties with populations of less than 100,000 from the California Environmental Quality Act.

AB 413 – Amends existing law which allowed a child or spouse of a disabled veteran who was/is the majority owner of a disabled veteran business enterprise to continue the enterprise for 3 years after the death or certification of permanent medical disability of such disabled veteran, but only for contracts entered into before the death or certification of permanent medical disability of such disabled veteran, by eliminating the restriction on contacts entered into before death or certification of permanent medical disability.

AB 552 – Makes unenforceable, for public works contracts entered into on or after January 1, 2016, provisions making a contractor responsible for delay damages to a public entity, unless the delay damages have been liquidated to a set amount in the contract.

AB 566 – Requires, through January 1, 2019, that lease-leaseback school project contracts include certain pre qualification requirements regardless of the funding source for the public works projects, and a skilled and trained workforce including at least 30 percent (30%) journeymen who have graduated from approved apprenticeship programs for contracts entered into on or after January 1, 2016.

AB 1308 – Revises the conditions which must be met to justify the approval of a new apprenticeship program if one of the following conditions is met: (1) There is not existing apprenticeship program serving the same craft or trade and geographic area; (2)an existing apprenticeship program does not have the capacity, or neglects or refuses, to dispatch sufficient apprentices; (3) an existing apprenticeship program has been identified by the California Apprenticeship Council as deficient in meeting their obligations.

SB 184 -Amends the Uniform Public Construction Cost Accounting Act in several respects, including, (1) authorizing notices inviting informal bids to be faxed or emailed to appropriate contractors lists or trade journals; and (2) authorizing governing bodies to designate a representative to adopt plans, specifications and working details for public works projects exceeding $175,000. Authorizes counties, whether general law or charter counties, with populations of less than 500,000, to award  individual annual contracts for repair, remodeling or other repetitive work according to unit prices not to exceed $3 million, adjusted annually.