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New California Laws for 2008 Expand Design-Build Contracting, Tighten Environmental Rules, Limit Indemnity in Homebuilding, Add Notary Requirements
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March 24, 2008
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Edited By Clark T. Thiel
DESIGN-BUILD
All California Counties Now May Use Design-Build Contracting
Public Contracts Code §20133 was amended to allow all 58 California counties to use design-build contracting for public works construction. Previously, had it authorized only the 30 counties explicitly named in the statute to utilize the design-build contracting. Section 20133 was amended to remove references to specific counties where design-built was permissible. The amendment ends the piecemeal, annual process of adding new counties to the list of those that could use design build contracting. The amendment retains both the sunset date of January 1, 2011, and all other substantive provisions.
SB 416, amending Public Contracts Code §416
Definition of "Project" for Design-Build Contracts Expanded to Include Wastewater Plants
The Public Contract Code permits counties to utilize design-build contracts for construction projects. The definition of "project" was expanded to include the construction of county wastewater treatment facilities. The amendment excludes other infrastructure from the definition of "project."
SB 233, amending Public Contract Code §20133
– Laura Kent
Design-Build Price Threshold Lowered for School Districts and Community Colleges
Previously, school district and community college governing boards could approve only design-build contracts exceeding $10 million. School district boards were authorized to approve such contracts until a sunset date of January 1, 2010. Community college boards had such authority until January 1, 2011.
The price threshold for the design-build contracts was lowered to $2 million dollars. The sunset date for both governing boards was lifted.
SB 614, amending Education Code §§17250.20, 81700 and 81702 and repealing §§81700.5 and 81700.7 and repealing §§18 and 19 of Chapter 35 of Statutes of 2006
INDEMNITY
Indemnification Agreements in Homebuilding Further Limited
More limits were imposed on the allowable scope of indemnity agreements between parties engaged in residential homebuilding. Existing law made unenforceable any agreement between a subcontractor and a homebuilder that required the subcontractor to indemnify the homebuilder for defects relating to the homebuilder's own negligence.
The new statute makes unenforceable agreements between a subcontractor and a general contractor that require the subcontractor to indemnify the general contractor for defects relating to the general contractor's own negligence. The amendment applies only to agreements and amendments to agreements entered into after January 1, 2008.
SB 138, amending Civil Code §2782
NOTARY
Notary Requirements Made More Strict
Requirements for notarizing documents in California have been changed. The three major modifications are: 1) the notary's personal knowledge no longer is a satisfactory basis for verifying a signer's identity; 2) a $10,000 fine is imposed on notaries not adhering to the new requirement for identification (acceptable means of proving identity are specified); and 3) notaries now must execute their notary statements under penalty of perjury. The new required notary language is:
| State of California |
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| County of ____________ |
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On [Date] before me, [Name of Notary], Notary Public, personally appeared [Name of Signor], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
________________________________________________
Signature of Notary Public
(Seal)
AB 886, amending and adding Civil Code §§1185, 1189 and various sections of the Government Code
– Aaron R. Gruber
GOVERNMENT CONTRACTING
State to Promote the Participation of Small Businesses in Infrastructure Construction Projects
The Government Code was amended to encourage the participation of small businesses in state infrastructure construction projects funded by "infrastructure-related bond acts of 2006" specified in the amendment. The amendment seeks to effectuate the state's goal of increased small business participation in infrastructure construction projects.
The amendment provides for directors of state agencies, including the Department of General Services, to take the following actions regarding projects using the proceeds of the listed bond acts: 1) Establish a goal of 25 percent participation by small businesses; 2) Advertise opportunities to bid on such projects in the California State Contracts Register and include in the advertisement a link to an Internet information page that describes, among other things, bidding procedures and bid preparation requirements; and 3) provide training and technical assistance to small businesses related to the bidding process and bidding procedures for such projects.
The amendment also requires agencies to track small business participation and develop a plan of action if the 25 percent participation goal is not being met.
AB 761, adding Government Code §14838.1
Public Agencies May Receive Project Documents Over the Internet
The Public Contract Code allows public agencies to receive bids over the Internet. It was amended to permits public agencies to receive "supporting materials" for public works projects over the Internet. "Supporting materials" include payment requests, shop drawings, schedules, notices of claims and certified payrolls. The amendment also requires public agencies to provide date- and time-stamped receipts to contractors for any submissions (including bid documents) made over the Internet. The amendment allows bids for California State University projects to be submitted electronically but only if the required bid security is provided within 24 hours of submitting the bid.
SB 161, amending Public Contract Code §§1601 and 10765
– Laura Kent
Public Works Board to Use Life-Cycle Analyses in Energy Projects
Government Code §15814.12, which sets out criteria for the State Public Works Board to consider before entering into energy service contracts, before adopting water conservation measures for any state agency or before acquiring or building cogeneration equipment and alternative energy equipment, has been amended.
Previously, the board had to determine that the anticipated cost to the state agency would be less than the anticipated marginal cost in the absence of the energy service contract, acquisition or construction. The amended section requires that the board determine, using a life-cycle cost analysis, that the equipment or energy service contract is cost effective over the life of the equipment installed or over the term of the energy service contract.
AB 609, amending §15814.12 of the Government Code
– Peter K. Zweighaft
Highway Safety Funding Shifted; "Safe Routes to School" Construction Program Extended Indefinitely
Authorization for federal funds to improve highway safety has been shifted from the Highway Safety Act of 1973 to the SAFETEA-LU Act. The funds will be appropriated to programs that seek to reduce the number of fatal and serious injury accidents. Such funds are to be allocated in approximately equal amounts between state highways and local roads.
The bill also indefinitely extends the "Safe Routes to School" program. That program constructs bicycle and pedestrian safety and traffic calming projects. Federal funding received for these projects will be distributed under the competitive grant process.
AB 57, amending, repealing and adding Streets and Highways Code §§2333.5, 2331, 2333 and 2333.6
– John Foust
LICENSING and REGULATION
Licensed Contractors Now Liable for Damages If They Aid, Abet or Conspire with Unlicensed Persons
Business and Professions Code §7114 was amended to authorize the Contractors State License Board to issue citations to those who aid, abet or conspire with unlicensed contractors. "Allowing one's license to be used by an unlicensed person" is defined to constitute aiding, abetting or conspiring with an unlicensed contractor.
CSLB is authorized to "order [one who aids, abets or conspires to make] payment of a specified sum to an injured party, including, but not limited to, payment for any injury resulting from the acts of the unlicensed person."
Previously, a financially-injured consumer who discovered a licensed person had permitted an unlicensed person to use his license had no recourse through the CSLB. CSLB now is authorized to issue a citation and order for the licensee to pay a sum certain to the consumer who has been financially injured by the unlicensed person. A financial injury may arise when the unlicensed person does a poor job or abandons the project. CSLB will contract with industry experts to determine the financial damage to the consumer and the corresponding citation amount.
SB 354, amending Business and Professions Code §7114
Forms of Business for Architects Clarified
The Business and Professions Code was amended to clarify the proper forms of business for providing architectural services. The amendments address the types of business entities permitted (§5535); the definition of "responsible control" over the business entity required by the licensed individual (§5535.1); allowable forms of partnership with non-architects in the context of the licensed individual's responsible control (§5535.2); allowable forms of collaborative entities for the provision of architectural services (§5535.25); and requirements for the provision of architectural services by a corporation.
AB 937, amending and adding Business and Profession Code §§5535, 5535.1, 5535.2, 5535.3, 5535.25
– Aaron R. Gruber
New Requirements for Landscape Architect Contracts and New Penalties for Unlicensed Practice
Business and Professions Code §5616 now identifies the requirements for an landscape architecture services agreement. The contract must be: 1) written; 2) be executed before work starts; 3) include a description of services to be provided and method of payment; 4) a statement regarding licensure in California; and 5) statements regarding the scope of services and termination rights.
Business and Professions Code §5640 now identifies the penalties imposed on persons who 1) practice landscape architecture without a license; 2) use the terms "landscape architect," "landscape architecture," "landscape architectural" or any other term that implies the possession of a landscape architect license; 3) use a stamp of a landscape architect; or 4) advertise as a licensed landscape architect.
AB 937, amending and adding Business and Profession Code §§5616 and 5640
– Aaron R. Gruber
Time Limits Extended for Disciplinary Actions Against Contractors
A disciplinary action against a licensed contractor convicted of crimes related to the qualifications, functions and duties of a contractor must be filed within two years after discovery of the conviction by the Registrar of Contractors or the Contractors State License Board.
A disciplinary action regarding an alleged breach of an express written warranty by a licensee must be filed within 18 months from expiration of the warranty. Previous law required that a warranty accusation be filed within the duration of the warranty.
AB 243, amending Business and Professions Code §7091
– John Foust
Contractor's License Bond Amounts Raised to $12,500
Business and Professions Code §7071.6 was amended to raise the amount of contractor licenses bonds to $12,500 from $10,000. Similarly, §7071.9 was amended to require that a qualifying individual who is not the proprietor, a general partner or a joint licensee to file a bond of $12,500, up from $7,500.
The definition of specialty contractor in §7058 was amended to remove the requirement for a specialty license to set up or remove roadway construction zones to perform lane closures, flagging or traffic diversions on a roadway.
Section 101.7 was added to the Business and Professions Code. It requires boards (including the Contractors State License Board, California Architects Board and Board for Professional Engineers and Land Surveyors) to meet at least three times a year and authorizes the director of consumer affairs to exempt any board from the meeting requirement upon a showing of good cause and to call a special meeting of the board when a board is not fulfilling its duties.
SB 1047, amending Business and Professions Code §§7058, 7071.6, 7071.9 and adding §101.7
– Brienne Wesolek
Landscape Contractors May Contract for Certain Outdoor Cooking Centers and Fireplaces
Contractor licensing laws were amended to authorize landscape contractors to contract to construct outdoor cooking centers and outdoor fireplaces as part of residential landscape projects. The outdoor fireplace may not adjoin a dwelling. Construction work on an outdoor cooking center or fireplace that is outside the scope of the landscape contractor classification must be performed by a general building contractor or an appropriately licensed specialty contractor.
AB 711, amending Business and Professions Code §7027.5
Contractor Disclosure Requirements Modified; New Statutes of Limitation
Home improvement contracts must include a statement that any down payment must be the lesser of $1,000 or 10 percent of the contract price; if the contract calls for progress payments, the contract must provide the details in a schedule of progress payments; and the contract must disclose that it is against the law to collect payment for work not yet completed.
A contractor who furnishes a performance and payment bond, lien and completion bond, a bond equivalent or a joint control approved by CSLB covering full performance and payment, however, does not need to include the down payment statement, the progress payment details or the progress payment disclosure.
If an unlicensed contractor performs contracts in violation of the contractor licensing laws, an indictment or information may be brought against the contractor within four years from the date of the contract or within four years from the date that the buyer first made payments if the contract is oral. If a licensed contractor violates the same provisions, an indictment or information may be brought against the contractor within two years from the date of the contract or within two years from the date that the buyer first make payments if the contract is oral.
AB 244, amending Business and Professions Code §§7159, 7159.5 and 7159.14
– Peter K. Zweighaft
Contractor Address Requirements Lengthened
Business and Professions Code §7083.1 titled "Address of Record" has been modified to change the time period for which an licensee must maintain a current address with the registrar from three years to five years after expiration or cancellation of a license.
AB 936, amending Business and Profession Code §§7069, 7083.1, 7153.1
– Aaron R. Gruber
Persons Holding Licenses Must Comply with Civil Rights Act of 2007
Under existing law, persons holding licenses governed by the Business and Professions Code are subject to disciplinary action for refusing and aiding or inciting another licensee to refuse to perform licensed services because of a prospective recipient's race, color, sex, religion, ancestry, disability, marital status or national origin.
The prohibition was extended to discrimination by licensees on the basis of disability, medical condition, marital status and sexual orientation.
AB 14, amending the Business and Professions Code, Civil Code, Code of Civil Procedure, Corporations Code, Education Code, Elections Code, Government Code, Health and Safety Code, Public Contract Code, Public Resources Code, Public Utilities Code, Revenue and Taxation Code, and Welfare and Institutions Code
– John Foust
Fictitious Business Requirements Modified
Requirements applicable to registrants for new fictitious business names have modified in an effort to clarify them. The existing fictitious business names law requires everyone in business under a fictitious name to file a fictitious business name statement containing specific data with the county clerk where the business operates. The clerks could charge specified filing and other fees associated with the statement. Under existing law, this statement was to be published in a newspaper circulating within this same county where the business operates. Existing law made it a crime to file or publish any false information in these statements.
The amendments create statement signing options for husbands and wives as well as for domestic partners. A registrant may file the statement in a county other than that in which the business's activity is transacted and requires only that the publication occur in the same county where the statement is filed. The fees county clerks may charge for fictitious business name statements have been specified. Criminal penalties for violating the statute are expanded.
AB 1670, amending 13 sections of the Business and Professions Code
ENVIRONMENT
Smog-Check Program Expanded to Include Some Diesel Vehicles
Beginning January 1, 2010, the smog-check program administered by the Department of Consumer Affairs and the State Air Resources Board will include diesel-powered vehicles manufactured after the 1997 model-year that have a gross vehicle weight rating of less than 8,501 pounds. These vehicles now are exempt from the biennial smog-check requirements.
The law provides for smog-check testing of diesel vehicles and requires that on-board diagnostic testing be completed.
AB 1488, amending, repealing and adding §§44010.5, 44011 and 44012 of the Health and Safety Code
Penalties Increased for Illegal Dumping
Courts now are required to impose an additional fine on defendants found guilty of littering and illegal dumping. The defendant must pay an additional $100 for infractions and $200 for misdemeanors in addition to the penalties for littering and illegal dumping. Funds collected under the new law are to be paid to the city or county where the violation occurred to be used for its illegal dumping enforcement program.
AB 679, adding §1202.51 to the Penal Code
– Peter K. Zweighaft
Penalties for the Treatment or Storage of Hazardous Waste Expanded
Existing law authorizes the imposition of civil/administrative penalties for the intentional or negligent disposal of hazardous waste at an unauthorized site. The Health and Safety Code was amended to extend the reach of this law so that it includes imposition of a civil/administrative penalty on a person who intentionally or negligently treats or stores a hazardous waste regardless of the person's intentions. However, the bill exempts a person from civil liability for illegal disposal, treatment or storage if that person has taken reasonable steps to determine that the transporter is registered or the facility is authorized to accept the hazardous waste being offered.
AB 1371, amending Health and Safety Code §§25189 and 25189.2
Stricter Water Efficiency Standards Enacted for Water Closets and Urinals
The Health and Safety Code has been amended to set stricter water efficiency standards for water closets and urinals. The amended sections preserve parts of the former code, including the maximum average usage of 1.6 gallons per flush for water closets and 1 gallon for urinals, while removing the exception for "blowout water closets" and updating performance, testing and labeling requirements to revised American Society of Mechanical Engineers standards. The amendment further clarifies that the ASME standard will be the sole marking and labeling requirement for sales in California. Compliance with the standard must be certified by an American National Standards Institute-accredited third-party certification agency.
The amendment also requires that by January 1, 2014, all units must meet higher efficiency standards (1.28 gallons for water closets and 0.5 gallons for urinals), subject to exceptions for institutional toilets and blow-out urinals.
The amendment retains exemptions for 1) units determined by city or county ordinance to require greater flow for public health reasons; 2) installations that would require modification of the components of a plumbing system located beneath a finished wall or surface; and 3) units located at historical sites for which compliant and historically appropriate replacements are not available.
The amendment requires manufacturers selling units in California to increase the percentage of high-efficiency models that they offer in the state (as a function of the total number of models that the manufacturer offers in the state) on an annual basis and as reported by January 30 of the relevant year: 50 percent in 2010, 67 percent in 2011, 75 percent in 2012, 85 percent in 2013 and 100 percent in 2014.
The amendment does not pre-empt the power of cities, counties or districts to enact additional or more restrictive measures. But, it also does not create new powers for such governmental entities.
The provision remains operative until January 1, 2014, or until the California Building Standards Commission includes standards in the Building Standards Code that conform to the amended section, whichever date is later.
The amendment also establishes requirements for nonwater-supplied urinals and adds §18944.11. It mandates that state agencies consider adopting or proposing building standards for nonwater-supplied urinals for submission to the California Building Standards Commission.
AB 715, amending Health and Safety Code §17921 and adding Health and Safety Code §18944.11
Condominium Projects May Use Recycled Water for Flushing Toilets and Urinals
Prior law generally authorized public agencies to require the use of recycled water for toilet and urinal flushing in structures if certain requirements were met, but the term "structures" as defined by the statute did not include condominiums. The law has been amended to include condominium projects. Before recycled water can be used, the agency delivering the recycled water to the condominium project must file a report with the appropriate regional water quality control board and receive written approval from the California Department of Public Health.
AB 1406, amending §13553 of the Water Code
EMPLOYMENT
Prevailing Wage Requirements Clarified for Public Works Projects
Labor Code §1773.9's requirements for prevailing wages on public works have been amended. The former law required contractors and subcontractors on public works projects to pay their workers the general prevailing rate for per diem wages for the locality in which the work was performed. The per diem wage rate includes both an hourly wage and a payment for employee benefits and is determined by the Director of Industrial Relations by reference to collective bargaining agreements, data from unions and employer associations, and other sources.
Section 1773.9, as amended, provides that whenever the prevailing wage determination contains a predetermined change based on a rate established by a collective bargaining agreement but does not specify how the change will be allocated between hourly wages and employee benefits, contractors and subcontractors may make their own allocation for up to 60 days after the DIR publishes the allocation without being subject to liability under the prevailing wage law.
SB 929, amending Labor Code §1773.9
Workers Granted Time Off When Military Spouses Are on Leave
Section 395.10 was added to the Military and Veterans Code. It requires employers with 25 or more employees to provide up to 10 days of unpaid leave to employees who are spouses of qualified military service members while the service member is home on leave.
A "qualified" service member is defined as member of the U.S. armed forces, National Guard or Reserves deployed during a period of military conflict to a combat theater or zone.
Employees are eligible for leave provided they work an average of at least 20 hours a week. Employees must provide notice of their intent to take the leave within two days of receiving official notice that their spouses will be coming home. They also must provide copies of official documentation certifying that the spouse will be home during the days for which leave is requested. The taking of military spousal leave under this law does not affect an employee's eligibility for other types of leaves or his or her rights to other employee benefits provided by law.
While the bill only expressly covers "spouses," the California Domestic Partnership Act at Family Code §297.5 extends the same rights and privileges of spouses to couples registered with the state as domestic partners.
AB 392, adding Military and Veterans Code §395.10
Earned Income Tax Credit Notice Requirements Enacted
Revenue and Taxation Code §19850, et seq. was amended to require all employers covered by the Unemployment Insurance Law to provide employees with a special notice of their potential eligibility for the federal Earned Income Tax Credit. Revenue and Taxation Code §19854 provides the exact language of the notice, and a sample notice may be downloaded from the Employment Development Department's Web site. The notice must be either hand-delivered or mailed to employees within one week of the date employees are provided with their annual wage summaries, e.g., IRS Form W-2 or Form 1099. The employer's posting of the notice on the Internet or an electronic bulletin board or sending it through office mail will not satisfy the notice requirement.
AB 650, amending Revenue and Taxation Code §§9850, et seq.
State and Federal Minimum Wage Rates Increased
The minimum wage in California increased from $7.50 to $8 an hour effective January 1. On July 24, 2008, the federal minimum wage will increase from $5.85 to $6.55 per hour.
The increase in California's minimum wage rate impacts numerous other wage rates and overtime-exempt classifications under state laws.
– Clark T. Thiel
IRS Standard Mileage Reimbursement Rate Increased
The Internal Revenue Service increased optional standard mileage rates used to calculate deductible costs of operating a vehicle for business purposes from 48.5 cents to 50.5 cents a mile. This increase is significant for California employers because Labor Code §2802 requires that employees be reimbursed for all work-related expenses, including travel expenses, necessarily incurred in the course of performing their jobs. The California Division of Labor Standards Enforcement has issued proposed regulations interpreting §2802. The proposed regulations, which have not yet been adopted, provide that the IRS mileage rate is a reasonable rate which employers may use to reimburse employees for vehicle expenses they incur in connection with work.
– Clark T. Thiel
MISCELLANEOUS
State Senate Solves Age-Old Mystery: Manufactured or Mobile Home?
Senate Bill 538 provides definitions and clarity regarding the differences between manufactured housing and mobile homes. Both manufactured homes and mobile homes are structures that: 1) are transportable in one or more sections; 2) are 8 feet or more in width or 40 feet or more in length in transportable mode or 320 or more square feet when assembled; and 3) built on a permanent chassis and designed to be used as a single-dwelling with or without a foundation when connected to the required utilities.
A manufactured home is a structure built on or after June 15, 1976. A mobile home is a structure built before June 15, 1976. The clarification will not effect any substantive change but is intended to relieve confusion among consumers, enforcement agencies, lenders and others in the housing industry.
The bill also added a definition for "multifamily manufactured home."
It provides that the definition for the C-47 manufactured housing contractor's license shall include mobile home, manufactured home and multifamily manufactured home.
SB 538, amending §§ 18000, 18007, 18008 and 18008.7 of and the heading for Part 2 (commencing with §18000) of Division 13 of the Health and Safety Code
Second Week of April Is Proclaimed California Architecture Week
In an effort to urge all Californians to become aware of architecture, architectural design and the architects who help to shape the built and natural environments and create livable communities, the second week of April was proclaimed California Architecture Week. The week is intended to celebrate the more than 20,000 licensed architects practicing in California
SCR 43
– Brienne Wesolek
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