 |
Edited by John W. Ralls
Thelen Reid Brown Raysman & Steiner LLP
DESIGN-BUILD
17 More Counties Allowed to Use Design-Build
Public Contract Code §20133 was amended to allow the following 17 counties to utilize design-build: Butte, El Dorado, Fresno, Kings, Madera, Mariposa, Merced, Monterey, Orange, Placer, San Diego, San Joaquin, San Luis Obispo, Shasta, Siskiyou, Stanislaus and Yuba. Previously, §20133 had allowed only seven counties to utilize design-build: Alameda, Contra Costa, Sacramento, Santa Clara, Solano, Sonoma and Tulare.
The amendment further expands authorization for design-build and best value procurements by lowering the minimum contract cost to $2.5 million. Previously, Public Contract Code §20133 had limited design-build to projects costing more than $10 million and limited best value procurement to projects costing more than $20 million. The authorization for use of design-build and best value was extended until January 1, 2011.
Note: The California Infrastructure Financing Act (Government Code §5956, et seq.) was not amended and still allows alternate project delivery methods for "fee producing infrastructure."
SB 287, amending Public Contract Code §20133
– Laura Kent
Cities in Solano and Yolo Counties Allowed to Use Design-Build
Public Contracts Code §20175.2 allows cities in Solano and Yolo Counties, with the approval of their city councils, to enter into design-build contracts if a four-step process followed. The cities must: (1) prepare a set of documents describing the scope of the project; (2) prepare a request for competitive sealed proposals; (3) develop a standard questionnaire for pre-qualifying design-build firms; and (4) establish a procedure for selecting the design-build firm.
Cities that use design-build must submit a report with specified information to the Legislative Analyst's office before December 1, 2009. Cities that decide not to use design-build may submit an explanation to the Legislative Analyst's office. On or before January 1, 2010, the Legislative Analyst will report to the Legislature on the cities' use of design-build. The report may include recommendations for modifying or extending Public Contracts Code §20175.2, which has a January 1, 2011 sunset provision.
AB 1329, adding Public Contracts Code §20175.2
PUBLIC BIDDING
Contractors Have 5 Working Days to Give Notice of Mistakes in Bids
Public Contract Code §5103 sets forth the procedure a contractor must use when submitting a notice of mistake in bid to a public owner. Section 5103 was amended to provide "five working days," rather than "five days," for the contractor to give such notice.
SB 731, amending Public Contract Code §5103
– John W. Ralls
INDEMNITY ON RESIDENTIAL PROJECTS
Subcontractor Indemnity Obligations on Residential Projects Limited
Civil Code §2782 was amended to limit a subcontractor's obligation to indemnify a developer or developer-affiliated general contractor for construction defects in residential construction projects. This amendment applies only to original construction of individual dwelling units. The amendment does not impact commercial contracts, contracts for condominium conversations or apartment construction contracts. For the projects covered, subcontractors cannot be obligated to defend or indemnify a developer or developer-affiliated general contractor for its negligence or the negligence of its agents or independent contractors. Contrary provisions in contracts signed on or after January 1, 2006, are ineffective.
AB 758, amending Civil Code §2782
RECYCLING
Use of Scrap Tires Required for Road Material
To help reduce the mountains of tires discarded each year, the Legislature enacted Public Resources Code §42703. It requires the Department of Transportation to phase in the use of crumb (recycled) rubber in lieu of other materials to make rubberized-asphalt concrete for state highway construction and repair projects.
On or after January 1, 2007, the statute requires that at least 6.62 pounds of crumb rubber be used for each metric ton of asphalt paving materials used statewide. If the Legislature determines that the cost of asphalt-containing crumb rubber does not exceed the cost of conventional asphalt, the statute increases the use requirements after 2010 to not less than 8.27 pounds and after 2013 to not less than 11.58 pounds. The annual average requirements are to be achieved on a statewide basis and do not require the use of asphalt containing crumb rubber on any particular project or when it is not feasible.
AB 338, adding Public Resources Code §42703
Use of Recycled Concrete Permitted
To encourage use of recycled concrete, Public Resources Code §16002 (a) authorizes the use of recycled concrete materials as long as the user has been "fully informed" that the concrete may contain such materials. Section 16002 (b) defines "fully informed" as "informed of the potential use of recycled materials in a concrete product prior to or at the time of ordering, either orally or in writing, and informed by the delivery receipt as to the recycled ingredients at delivery acceptance." Public Resources Code §16003 prohibits offering, providing or selling recycled concrete to "the Department of Transportation or the Department of General Services for any use, including, but not limited to, any project under its affiliation, contract authority, or oversight responsibility unless specifically requested and approved by the department."
AB 574, adding Public Resources Code Division 12.3 (beginning at §16000)
PAYROLL
Public Works Contractors May Maintain Payroll Records Electronically
Labor Code §1776 was amended to allow public works contractors to comply with payroll recordkeeping requirements by providing computer printouts of electronically maintained payroll records. Section 1776 requires contractors on public works costing more than $1,000 to pay their workers prevailing wages. Contractors must maintain verified payroll records containing specified data. Certified copies of these records must be made available to state inspectors. The amended statute clarifies existing law by stating that computer printouts are an adequate method for providing the required information so long as the printouts satisfy other statutory requirements.
SB 759, amending Labor Code §1776
Full Social Security Numbers Not Allowed on Payroll Checks
Labor Code §226 lists the data that employers must include on semi-monthly itemized statements provided with paychecks. Formerly, §226 required the employee's Social Security number to be listed on the statement. The statute was amended to require employers to use only the last four digits of the employee's Social Security number or an unrelated identification number. The law takes effect immediately as an urgency statute although employer compliance is not required until January 1, 2008.
Largely a clarification of existing law, the amendment requires employers to include the following on the itemized statement:
|  | Gross wages earned.
|
| | Total hours worked unless the employee is entirely salaried and exempt.
|
| | Number of piece rate units earned and any applicable price for those units.
|
| | All deductions ordered in writing by the employee.
|
| | Net wages earned.
|
| | Payment period.
|
| | Employee name and revised identification number.
|
Current and former employees are entitled to inspect or copy records pertaining to them, and employers must allow reasonably practicable access to the records. Employers violate this requirement if they delay an employee access for more than 21 days after receiving an oral or written inspection or copying request. Employers violating the statute are liable for damages up to $4,000 per employee for persistent violations. Employees also may seek injunctive relief to correct employer violations.
SB 101, amending Labor Code §226
BUILDING STANDARDS
Seismic Retrofitting Required for Soft Story Residential Buildings
Previously, seismic retrofitting standards in the Health and Safety Code addressed "unreinforced masonry buildings constructed prior to the adoption of local building codes requiring earthquake resistant designs." In response to the large number of soft story buildings that were destroyed in the Loma Prieta and Northridge earthquakes, as well as predictions that soft story buildings will be responsible for 66 percent of uninhabitable buildings following an event on the Hayward fault, and the fact that many of these buildings are occupied by "the very poor, the very old, and the very young," these statutes all have been amended to specifically add and address "soft story residential buildings."
"Soft story" is defined as wood-frame, multi-unit residential building in which the ground floor portion of the structure contains parking or other similar open floor space. Pursuant to these amendments, local governments now may establish retrofit standards substantially equivalent to a nationally recognized model code in regards to soft story buildings.
The amendments also replaced the term "reconstruction standards" with "seismic retrofit standards."
AB 304, amending Health and Safety Code §§19160, 19161, 19162, 19163, 19163.5, 19165, 19166
LICENSING
Harsher Penalties Enacted for Contracting Without a License and for Qualifier Violations of Worker's Compensation Insurance Requirements
Business and Professions Code §7028 provides that acting as a contractor without a license is a misdemeanor. Previously, repeat offenders, with limited exceptions, could be sent to county jail for not less than 90 days and fined the greater of $4,500 or 20 percent of the contract price under which the unlicensed contractor was performing. Section 7125.4 provides that applicants for a contractor's license and licensees are subject to disciplinary action for violating worker's compensation insurance requirements.
Section 7028 was amended to increase the penalties for third and subsequent convictions for contracting without a license. The offenders shall be fined not less than $4,500 and not more than the greater of either $10,000 or 20 percent of the contract price or imprisoned for not less than 90 days and not more than one year or shall be both fined and imprisoned. Section 7125.4 was amended to make it a misdemeanor for a contractor's license qualifier to violate or to fail to prevent the licensee's violation of worker's compensation insurance requirements.
SB 488, amending Business and Professions Code §§7028, 7125.4
Landscape Contractors Exempted from Some Registration Requirements
Licensed landscape contractors may now design projects that they build themselves or over which they supervise construction. In order for this exemption to apply, the project must be within the scope of the landscape contractor's license. Landscape contractors may not, however, use the title "landscape architect" unless they hold a landscape architecture license.
SB 1113, amending Business and Professions Code §§5641.4, 6714, 7018.5, 7159.4, 7159.5, 7159.6, 7159.10, 7159.11, 7159.12, 7159.13, 7159.14 and amending Civil Code §1689.15
Disassociated Partners, Officers and Employees Must Comply with Arbitration Awards
Business and Professions Code §7122.2 was amended to provide that a disassociated qualifying partner, responsible managing officer or responsible managing employee must comply with an arbitration award rendered as a result of acts or omissions committed while that person acted as the qualifying partner, responsible managing officer or responsible managing employee.
AB 316, amending Business and Professions Code §7122.2
HOME IMPROVEMENT
Additional Requirements Enacted for Residential Service and Repair Contracts
Business and Professions Code §7159.10 was amended to set forth information, notices and disclosures required for Service and Repair Contracts between a contractor or salesperson for a contractor and a homeowner or a tenant. Service and repair contracts are contracts for home improvements, for $750 or less, for which the buyer initiated contact and for which the contractor does not sell goods or provide services beyond the particular problem. Pursuant to § 7159.10, if a Service and Repair Contract does not meet that section's requirements, which include several notifications particular to the nature of the service contract, it must meet §7159's home improvement contract requirements.
Business and Professions Code §7167 was amended to provide penalties when a contract, primarily for construction of a swimming pool, does not substantially comply with §7159.
Similarly, Civil Code §1689.6 was amended to provide that if a Service and Repair Contract does not comply with Business and Professions Code §7159.10 (a), §7159 is applicable, regardless of the contract price. Civil Code §1689.15 was amended to provide that a buyer retains all rights of cancellation applicable to home solicitations until the buyer receives a Service and Repair Contract that meets Business and Professions Code §7159.10's requirements and the licensee commences the project.
Business and Professions Code §7159.12 was repealed. That section related to service repair contract requirements with respect to notices and disclosures, and similar provisions have been added to §7159.10. Business and Professions Code §7159.13 was repealed. That section related to service repair contract requirements with respect to estimates, project descriptions and the right to cancel, and similar provisions have been added to Business and Professions Code §7159.10. Civil Code §1689.7 was amended to refer back to Business and Professions Code §7159.
AB 316, amending Business and Professions Code §§7159.10, 7167; amending Civil Code §§1689.6, 1689.7, 1689.15; repealing Business and Professions Code §§7159.12, 7159.13
WORKS OF IMPROVEMENT
Claimants May Reduce or Release Stop Notices
Civil Code §3262 was amended to provide that existing law does not preclude a stop notice claimant from reducing part of or releasing all of a stop notice. The notice of reduction or release must be in writing and may be served in forms other than those set forth in Civil Code §3262. The amendment also provides that such a stop notice reduction or release:
| | Reduces the owner's obligation to withhold money on account of the stop notice or releases it altogether.
|
| | Releases or reduces the claimant's right to enforce the notice.
|
| | Does not release or reduce any right the claimant may have other than the right to enforce the stop notice.
|
| | Does not preclude a subsequent, timely and proper stop notice.
|
The new stop notice provisions do not state expressly whether they apply to both public and private works, and they make no mention of the effect of a reduced stop notice on lenders' obligation to withhold funds. Given that the provisions are found in a chapter of the Civil Code that covers mechanic's liens, stop notices (public and private) and payment bonds, the new provisions presumably were intended to apply to all stop notices and to lenders.
SB 130, amending Civil Code §3262
NOTARY ACKNOWLEDGMENTS
Acknowledgments Must Follow Exact Language In Civil Code §1189
Previously, notary acknowledgements had to be "substantially similar" to Civil Code §1189's language. With this amendment, notary acknowledgments now must use the section's exact language. The language for the notary acknowledgments in §1189 was not amended.
AB 361, amending Civil Code §1189
– Aaron R. Gruber
LABOR
Independent Third Party Enforcement of State's Labor Compliance Program Required
Current law requires school districts and universities to operate a labor compliance program to ensure that workers on prevailing wage construction projects are paid properly. The Division of Labor Standards Enforcement found that school districts had one of the worst wage compliance records in the public works field. The problem was a result of school districts hiring third party managers to oversee school construction projects, in addition to managing payroll, bidding and, in some instances, labor compliance. Assembly Member Klehs, the bill's sponsor, found evidence that some construction managers falsely certified that correct wages were paid to workers.
Labor Code §1771.7 was amended to require an independent third party to ensure labor compliance and to prohibit contractors on public works projects from self-reviewing the payroll records for their own employees or for employees of their subcontractors. The statute applies only to public contracts financed by the Kindergarten-University Public Education Facilities Bond Act of 2002 and 2004.
AB 414, amending Labor Code §1771.7
EXCAVATORS
Power Equipment Allowed for Subsurface Excavations
California law had required excavators to use hand tools to determine the location of subsurface installations. Government Code §4216.4 was amended to allow excavators to use power-operated, power-driven or vacuum excavation devices to any depth within the approximate location of a subsurface installation. A written agreement between the operator of the subsurface installation and the excavator is required.
Government Code §4216.3 was amended to require operators of subsurface installations to make a reasonable effort to make field markings in conformance with the uniform color code of the American Public Works Association.
SB 140, amending Government Code §§4216.3, 4216.4
PUBLIC WORKS PROJECTS
Master Builder's Risk Insurance Program for State Construction Projects Established
Previously, Government Code §11007 did not authorize purchasing insurance for state construction projects. State property could not be insured against the risk of fire damage or destruction unless expressly authorized by law or by the director of the Department of General Services. Government Code §11007 was amended to authorize the DGS director to establish a master builder's risk insurance program for all state construction projects. A master policy issued for a project must require at least a $25,000 deductible from the contractor.
The new authorization given to the DGS director applies expressly to "all state construction projects" although there are other state agencies and departments that oversee their own projects, such as Caltrans and the University of California.
SB 548, amending Government Code §11007
EMPLOYER SAFETY PRACTICES
Skin Cancer Prevention Policies in the Workplace Encouraged
The Legislature recognized that exposure to ultraviolet rays from sunlight and artificial sources causes 90 percent of skin cancer in the United States and that one in five Americans will develop skin cancer. Given the danger of ultraviolet rays, OSHA, the Center for Disease Control and Prevention, the World Health Organization and the California Department of Health have published guidelines for skin cancer prevention. Accordingly, the Legislature adopted this resolution urging state agencies to advise employers of the importance of skin cancer protection in the workplace and urges employers to enact skin cancer prevention policies for outdoor workers.
SCR 25, adopted non-binding resolution
If you would like to receive legal reports and updates more quickly, by e-mail, click here and fill out the mailing list form.
For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-369-7210 or at jralls@thelen.com or contact your Thelen attorney. For more information about Thelen's Construction and Government Contracts Department, click here.
©2006 Thelen Reid Brown Raysman & Steiner LLP
|
