from Kevin Pedrotti, Legislative Advocate for the Golden State Builders Exchanges
August Update
The legislature will return on August 15 to complete the legislative year on September 9. Below are the key bills we have been active on and will require our involvement through the end of session.
Legislation
SB 293 (Padilla) - Reduces the time a claimant must give notification that he or she is enforcing a claim against a bond for a public works project, decreases the time period during which a contractor must pay his or her subcontractors (10 to 7 days), exempts laborers from preliminary notification requirements and any deadline to enforce a bond claim for private works of improvement, and prohibits a public entity from retaining more than 5% of a contract price until final completion and acceptance of a project.
Bill is set for the Assembly Appropriation Committee August 17. There is much opposition from schools, cities, etc. to the 5% cap on retention.
SB 474 (Evans) – An extremely contentious bill that purports to resolve liability for the negligence or design defects of other parties engaged in the construction project by making risk-shifting contract clauses unenforceable. For this purpose, SB 474 would provide that indemnity and duty to defend clauses contained in all construction and insurance contracts would be unenforceable to the extent that the clauses required the non-fault party to be responsible for claims arising from the negligence or fault of another contracting party.
Amendments are forthcoming from the opposition that provides that subcontractors and all other parties involved in the construction process will all receive equal protection and same fair treatment through the use of proportional liability. In addition, the amendments do not allow project owners to shift to contractors or subcontractors the risks of the owners own errors, negligence, or breaches of their legal duties.
The bill is on the Assembly floor for consideration and could be brought back to committee for further amendments and consideration.
AB 720 (Hall) - In 1983, the Legislature enacted the California Uniform Construction Cost Accounting Act (Act) to alleviate disputes between public agencies and the construction industry over what projects should be put out to bid and what projects should be completed with county employees. The Act achieves this objective in two principle ways. First, it establishes a process for developing uniform cost accounting procedures for public construction projects and for recommending the procedures to the State Controller for adoption. Second, it establishes the dollar limits, which the State Controller may adjust over time, for what work must be done in-house and what work must be contracted out.
The use of the Act is a discretionary decision of county boards of supervisors, cities, and special districts. The Act only applies to public agencies whose governing boards have elected by resolution to become subject to the act's uniform construction cost accounting procedures.
Thirty-four of the state's fifty-eight counties are signatories, including small counties such as Trinity and Alpine and large counties like Riverside and Contra Costa.
This bill:
1. Allows, beginning January 1, 2013, a board of
supervisors or a county road commissioner for a county
with a population of 50,000 or more use, as an
alternative to procedures in the Act, specified
statutory county road commissioner alternative
procurement procedures for both:
A. Maintenance and emergency work.
B. New road construction and road reconstruction as
long as the total annual value of the new road
construction and the road reconstruction performed
by day labor, as specified in state law, does not
exceed 30 percent of the total value of all work
performed by force account other than maintenance
as reported in the State Controller's Streets and
Roads Annual Report as of January 1 of each year.
2. States that on or after January 1, 2013, the Act does
not prohibit a board of supervisors or a county road
commissioner for a county with a population of less than
50,000 from using, as an alternative to procedures in
the Act, specified statutory county road commissioner
alternative procurement procedures.
3. Requires a county board of supervisors or county road
commissioner to declare, in advance, its intention to
use county road commissioner alternative procurement
procedures for new road construction and road
reconstruction.
4. States that specified Act requirements governing a
public agency's rejection of bids apply to any county
that is subject to the bill's provisions.
5. Increases, from $125,000 to $175,000, the maximum value
of public projects that may be let to contract by
informal procedures under the Act, increases, from
$30,000 to $45,000 the maximum value of projects that
may be performed by a public agency's employees, and
increases from $137,500 to $187,500 the bid limit
exception that applies when all informal bids on a
project exceed the informal bid limit specified by the
Uniform Public Construction Cost Accounting Commission.
The bill is on the Senate floor with no opposition.
AB 780 (Calderon) - This measure provides that the contractor in a fixed price contract is entitled to an increase in payment for a change in the contract price attributable to an increase in the state sales and use tax rate. The bill also provides that the government entity is entitled to a reduction in payment when the sales and use tax rate is reduced. Increases or decreases shall be made in accordance with the contract, or by agreement if the contract does not so provide. The bill applies only when the contract is entered into prior to the rate increase, and does not apply to property, materials, or fixtures obligated pursuant to a contract during the period of time contractor has the right to terminate the contract unconditionally or upon notice, whether or not the right is exercised. The measure similarly applies to leases that are continuing sales and purchases of property. The bill applies only to contracts entered into on or after its effective date.
The bill is set for the Senate Appropriations Committee on August 15.
AB 1210 (Garrick) – Requires that all civil engineering activities performed in the preparation, submission, execution, and enforcement of stormwater pollution plans shall be performed by a licensed civil engineer. The state requires construction contractors to develop storm water pollution prevention plans (SWPPPs) in order to prevent the contamination of local waterways from a construction site’s storm water runoff. Qualified SWPPP Developers (QSDs) and Qualified SWPPP Practitioners (QSPs) must meet one of several prerequisite qualifications and are required to attend a state-sponsored or approved training course. Under AB 1210, only one person is deemed qualified for the QSD – the registered civil engineer. The State Water Resources Control Board has spent years drafting the Construction General Permit 2009-0009. It also gave the construction industry two years to appropriately train and test employees to conduct both QSD and QSP work. This bill completely negates these two years of training and is unfair to those construction companies and individuals that invested resources into ensuring compliance.
The bill was defeated in the Senate Business and Professions Committee with strong opposition from construction interest. The bill was granted reconsideration and is a two-year bill. Strong likelihood bill is dead.
Redistricting
Below is quick summary of the legislative and congressional redistricting. Final boundaries are to be approved on August 15.
- Citizens Redistricting Commission issued final maps of legislative boundaries.
- In some cases, legislators are still deciding what district or office to run for.
- Several sitting legislators will be candidates for Congress since the new boundaries appear favorable to them.
- Other are tossed into the same district – Sacramento – 2 incumbent legislators.
- For some senators, the nuance of numbering could play major roll in their career.
- Half the senate seats come up every two years. Odd-numbered in 2012 and even numbered in 2014. A senator who swaps an odd digit for an even district is out of a job for two years and the even who swaps odd will be forced to run in two years instead of 4.
- Excellent resource of maps and incumbent legislators:http://www.aroundthecapitol.com/districts/
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