Golden State Builders Exchanges
From Kevin J Pedrotti, Legislative Advocate
The regular session of the 2009 legislative year ended on October 11 with the Governor taking final action on hundreds of bills 30 days after the legislature adjourned forthe year. The Governor had threatened to veto “most” of the bills on his desk if the legislature did not meet his demands for a comprehensive “water deal.” In the end, theGovernor concluded enough progress had been made that he ended up signing 478 and vetoing 229 bills in October. For 2009, including special session bills, the Governor signed a total of 696 and vetoed 257 bills. In addition to the Regular Session, there have been seven Extra-Ordinary sessions called by the Governor this year, the last two on the state’s tax system and water.
For the construction industry, two disappointments were the veto of SB 802 (Leno) which would have prohibited retention proceeds from exceeding 5% of the payment for all contracts entered into between a public entity and an original contractor and subcontractor; and the Assembly Appropriations Committee holding AB 1523 (Calderon) which exempted parties who entered into fixed-priced contracts before February 21, 2009 from the newly enacted 1% sales and use tax increase.
The national recession dominated the year with two special sessions to deal with the state budget. After addressing the $26 billion deficit in July, the state controller recently announced the budget was $1.1 billion below projections only 3 months into the fiscal year. State unemployment rates remain above 12.3% with construction hardest hit. Some estimate construction unemployment to be closer to 20%. The month of September saw overall job losses at 40,000 with some economist believing the actual amount to be higher because of the number of individuals who have simply dropped out of the labor force. It is expected the budget will need to be revisited again in January 2010.
California’s budget is highly dependent upon the state personal income tax (PIT) for revenue. For the fiscal year 2009-10, the PIT will provide about 54 percent of the state’s General Fund revenue, up from 11 percent in the 1950-51. As income concentration has shifted, high income earners now pay a larger share of the PIT than they did in the past. In 2006, the top 1 percent of income earners paid 48 percent of the PIT, compared to 33 percent in 1993. When high wage earners see a drop in income, the state budget suffers concurrently.
Recall drives were launched against several republican members of the legislature who voted for the February budget which included tax increases. The signature drive against Assembly Member Anthony Adams (Hesperia) appears to be the only successful effort. Signatures are currently being verified and Adams will likely face a recall election early next year. In the final days of the legislative year, the Capitol was rocked with an “open-mic” scandal involving a supposed personal relationship between a legislator and a female lobbyist. The legislator, Mike Duvall, resigned within days of the scandal hitting the press. A special election has been called to fill this Orange County seat. The Governor will have the opportunity to name a replacement for the office of Lt. Governor. The incumbent, John Garamendi, is running in a special election for a Bay Area congressional seat. Whomever the Governor selects will need to be confirmed by the legislature. Most assume it will be a care-taker who commits not to run for the position in 2010.
Looking to 2010, expect much of the same legislatively. A large number of bills introduced in 2009 were made “two-year” bills and many of these will need to be disposed of by the end of January to meet the legislative deadlines. In addition to the numerous two-year bills, some of the bills that were either defeated or vetoed will likely be reintroduced again. Most anticipate another year of lean budgetary times and hard decisions on budget reductions. Couple legislative and budgetary battles with an election year and things become all the more complicated.
All state-wide offices are up for vote in 2010 with the most focus on who will replace Arnold Schwarzenegger. Will it be Jerry Brown (again) or the media-genic San Francisco Mayor Gavin Newsom or self-funding billionaires Meg Whitman (ebay fame) or Steve Poizner (Insurance Commissioner)? Or might it be none of the above since a year is an eternity in politics? For those that enjoy the art of politics, 2010 should be a good show.
In addition, all 80 assembly seats and 20 of the 40 senate seats will be up for election. Of these 100 legislative posts, one-third of the legislature will be brand new after the election because of term-limits.
And if that is not enough, expect a full slate of ballot propositions to decide on.
2009 New Laws Summary
AB 31 (Price) - DVBE: Makes substantive changes to existing provisions of law relating to state procurement procedures in order to increase small business and disabled veteran-owned business enterprise (DVBE) participation in state contracting. Chapter Number 212, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0001-0050/ab_31_bill_20091011_chaptered.pdf
AB 85 (Tom Berryhill) – Metal Theft: Corrects technical errors in the existing laws related to junk dealers and recyclers. Current cross references contradict the intent of the Legislature regarding the release of the required thumbprint; and AB 85 will also clarify the payment release timeframe. Chapter 78, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0051-0100/ab_85_bill_20090806_chaptered.pdf
AB 112 (Beall) – Transportation Funding: Authorizes the Santa Clara Valley Transportation Authority (VTA) to fund the repair and maintenance of state highways. Chapter 81, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0101-0150/ab_112_bill_20090806_chaptered.pdf
AB 116 (Beall) – Bid Amounts: Increases the minimum value for which the Alameda-Contra Costa (AC) Transit District, Santa Clara Valley Transit Authority (VTA), and the San Mateo County Transit District (SAMTRANS) must award bids to the lowest responsible bidder from $25,000 to $100,000. Additionally, this bill increases the minimum value for which the Golden Gate Bridge, Highway and Transportation District (GGBHTD) must award bids to the lowest responsible bidder from $20,000 to $100,000. Chapter Number 408, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0101-0150/ab_116_bill_20091011_chaptered.pdf
AB 210 (Hayashi) – Building Codes: Specifies that local governments may adopt changes or modifications to green building standards in the Building Standards Code in the same manner as they are authorized for other building standards. Chapter 89, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0201-0250/ab_210_bill_20090806_chaptered.pdf
AB 333 (Fuentes) – Tentative Maps: Extends the expiration dates by 24 months for tentative maps issued to developers, provided their approval date has not expired when this bill takes effect. Chapter18, Statutes of 2009.
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0301-0350/ab_333_bill_20090715_chaptered.pdf
AB 370 (Eng) – Unlicensed Contractors: Increases the maximum criminal fines for unlicensed contractors; requires a mandatory jail sentence for a third or subsequent conviction for unlicensed contracting; clarifies that the enhanced penalties for persons with prior unlicensed activity convictions applies not only for performing work, but also for offering to perform or submitting a bid to perform contracting work. Chapter Number 319, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0351-0400/ab_370_bill_20091011_chaptered.pdf
AB 395 (Fuentes) – Apprentice: Provides that an awarding body that implements a labor compliance program may, with the approval of the Chief of the Division of Apprenticeship Standards (DAS), assist the Director of DIR in the enforcement of a specified provision of law related to the employment of apprentices on public works projects. Chapter Number 438, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0351-0400/ab_395_bill_20091011_chaptered.pdf
AB 457 (Monning) – Liens: Require a mechanic's lienholder (generally a contractor, subcontractor, or material supplier) on a private work of improvement, after filing a complaint to foreclose on a mechanic's lien (also known as a claim of lien), to record in the proper county recorder's office a notice of the pendency of the proceedings. This bill would require that a lien holder serve the property owner with the mechanic's lien and a Notice of Mechanic's Lien in a form as specified. This bill would also provide that failure to serve the mechanic's lien and Notice of Mechanic's Lien as prescribed in the bill would render the mechanic's lien unenforceable as a matter of law. Chapter 109, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0451-0500/ab_457_bill_20090806_chaptered.pdf
AB 474 (Blumenthal) – Works of Improvement: Expands the authorization that allows public agencies to enter into contractual assessments to finance the installation of specified improvements to now include water efficiency improvements. Chapter 444, Statutes of 2009.
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0451-0500/ab_474_bill_20091011_chaptered.pdf
AB 483 (Buchanan) – Workers’ Compensation: This bill would require a licensed rating organization to establish and maintain an Internet Web site in order to assist persons in determining whether an employer has workers' compensation insurance. Chapter Number 241, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0451-0500/ab_483_bill_20091011_chaptered.pdf
AB 561 (Carter) – Road Worker Safety: Revises the definition of "highway worker" to include a contractor while under contract with the California Department of Transportation (Caltrans); an employee of a city, or county, or city and county who performs maintenance, repair, or construction of highways; or local streets and road infrastructure for the purpose of enhanced penalties for assault or battery upon a "highway worker." Chapter 116, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0551-0600/ab_561_bill_20090806_chaptered.pdf
AB 645 (Niello) – Land Surveyors: Deletes the requirement that the license expiration date appear on engineering plans or on land surveying documents; revises references to "registered" engineers to refer instead to "licensed" engineers; makes technical and conforming changes. Chapter Number 368, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0601-0650/ab_645_bill_20091011_chaptered.pdf
AB 729 (Evans) – Design-Build: Extends the authority of transit agencies to enter into design-build contacts until January 1, 2015. Chapter Number 466, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0701-0750/ab_729_bill_20091011_chaptered.pdf
AB 798 (Nava) – Transportation Finance: Establishes the California Transportation Financing Authority to assist transportation agencies in obtaining financing, primarily through issuing bonds backed by specified sources of revenue, to develop transportation projects. In doing so, this bill allows the authority to permit agencies to impose tolls for use of facilities constructed. Chapter Number 474, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_0751-0800/ab_798_bill_20091011_chaptered.pdf
AB 1084 (Adams) – Mitigation Fees: Provides a time frame for notice relating to an increase or change in fees levied under the Mitigation Fee Act and establishes procedures for requesting an audit of those fees. Chapter 507, Statutes of 2009.
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_1051-1100/ab_1084_bill_20091011_chaptered.pdf
AB 1085 Mendoza) – ARB Regulations: Requires ARB to make available to the public the technical data used in the development of regulations including information on air emissions, public health impacts and economic impacts before the formal regulation comment period begins. Chapter Number 384, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_1051-1100/ab_1085_bill_20091011_chaptered.pdf
AB 1086 (Miller) – Construction Materials: Codifies the intent of Section 3400 to encourage contractors and manufacturers to develop and implement new and ingenious materials, products, and services that function as well, in all essential respects, as materials, products, and services that are required by a contract, but at a lower cost to taxpayers. Chapter 132, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_1051-1100/ab_1086_bill_20090806_chaptered.pdf
AB 1117 (Fuentes) – SCIF Board: Would amend the State Compensation Insurance Fund (SCIF) law to clarify that existence, amendment, or renewal of a contract of insurance between SCIF and an organization of which any member of the board of directors is an officer or employee shall not constitute a conflict of interest for purposes of the SCIF law. Includes legislative findings that the amendments made by the act are technical in nature, do not change the law, and are intended to clarify that members of the SCIF Board of Directors are not disqualified from participating in decisions. Chapter 136, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/asm/ab_1101-1150/ab_1117_bill_20090806_chaptered.pdf
AB 1486 (Furutani) – Non-profit Organizations: Provides that specified tax-exempt organizations shall be deemed consumers, rather than retailers, with respect to certain transfers of tangible personal property (TPP) to their members. This measure corrects the problem non-profit entities face when they purchase items to sell, in turn, to their members. Under current law, if an organization registered as a 501(c) of the Internal Revenue Code purchases items to sell to its members and pays the appropriate sales tax on those items at the time of initial purchase, the organization is required to also collect sales tax on the items when it makes a sale to its members. Chapter 538, Statutes of 2009.
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_1451-1500/ab_1486_bill_20091011_chaptered.pdf
AB 4X 21 (Evans) – DVBE Quotas: AB 21 X4 was enacted as part of the budget package in July and signed into law as an urgency statute on July 28.
AB 21 X4 made changes to the Public Contract Code modifying the manner in which Disabled Veteran Business Enterprises (DVBE) are contracted with to perform public works projects contracted by state agencies.
Public Contract Code (Section 10115 (c)) requires state departments to meet a 3% goal of having DVBE firms be contracted with on state contracts. Prior to
AB 21 X4, bidding contractors were required to either meet the 3% goal in their bid or were required to demonstrate a good faith effort to solicit bids from DVBE firms.
AB 21 X4 eliminated the good faith option for a contractor which results in the bidding contractor being required to meet the 3% goal (quota) in their bid or have their bid rejected as non-responsive. Chapter 19, Statutes of 2009-10 Fourth Extraordinary Session.
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0001-0050/abx4_21_bill_20090728_chaptered.pdf
SB 283 (De Saulnier) – “Purple Pipe”: Extends deadline and allows greater flexibility for Department of Water Resources (DWR) to recommend changes to plumbing regulations for recycled water piping. State law sets a statewide target of 1 million acre-feet of recycled water use by 2010. Despite state and local efforts, recycled water use now stands at approximately 600,000 acre feet. According to the Recycled Water Task Force, California has the potential to recycle up to 1.5 million acre-feet per year of water by the year 2030. In recent years, the Legislature has passed various bills to encourage recycled water, including AB 371 (Goldberg) of 2006, which required DWR to adopt standard regulations for designing and installing piping for recycled water (AKA "purple pipe"). This bill would extend the deadline for completing those purple-pipe regulations. Chapter Number 178, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/sen/sb_0251-0300/sb_283_bill_20091011_chaptered.pdf
SB 407 (Padilla) – Plumbing retrofit: Requires the replacement of all non-water conserving plumbing fixtures in commercial and residential properties built prior to 1994 with water-conserving fixtures by either 2017 or 2019,depending on the type of property under specified conditions. Chapter Number 587, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/sen/sb_0401-0450/sb_407_bill_20091011_chaptered.pdf
SB 548 (Huff) – DVBE: Requires prime contractors who have stipulated that they would use a Disabled Veteran-Owned Business Enterprise (DVBE) as a subcontractor, to certify at the conclusion of the contract that all previously represented payments to the DVBE have been made. Chapter 595, Statutes of 2009.
http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0501-0550/sb_548_bill_20091011_chaptered.pdf
SB 575 (Stienberg) – Housing-Transportation: This bill is primarily a clean up measure to SB 375,and specifically focuses on the housing provisions contained in SB 375. One of the major sections of SB 375 coordinates the regional housing needs assessment (RHNA) process with the regional transportation planning process. Chapter Number 354, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/sen/sb_0551-0600/sb_575_bill_20091011_chaptered.pdf
SB 670 (Wiggins) – Suction Dredging: Places a statewide temporary moratorium on the use of any vacuum or suction dredge equipment in any river, stream or lake until the director of the Department of Fish and Game (DFG)completes a court ordered environmental review of its existing suction dredge regulations and updates the regulations. Chapter No. 62, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/sen/sb_0651-0700/sb_670_bill_20090806_chaptered.pdf
SB 2 X 4 (Cogdill) – Design-Build: Allows (1) design-build contracting for up to five state office facilities, prison facilities, or court facilities; (2) design-build contracting for up to 15 transportation projects (five local projects; 10 state projects); (3) design-build contracting for up to 10 redevelopment public works projects; (4) an unlimited number of public-private partnerships for transportation projects, deleting the existing statutory limits. Chapter No. 2, Statutes of 2009.
http://ct2k2.capitoltrack.com/Bills/sen/sb_0001-0050/sbx2_4_bill_20090220_chaptered.pdf
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