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Caltrans Retentions Waived; More Design-Build Approved; Green Building, Renewables Get a Boost in New California Laws
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April 13, 2009
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Edited by Clark T. Thiel
Howrey LLP
Caltrans Prohibited from Withholding Retention from Progress Payments
Previously, the Department of Transportation (Caltrans) could withhold retention from progress payments to its contractors. New Public Contract Code §7202 prohibits Caltrans from withholding retention from progress payments.
The new statute requires Caltrans to notify “the appropriate policy committees of the Legislature if the state’s best interests are compromised because retention was not withheld” on a project. Public Contract Code §7202 has a sunset date of January 1, 2014.
SB 593, adding Public Contract Code §7202
– Benjamin Heath
Minimum Bid Threshold Increased for Highway Maintenance Projects
Streets and Highway Code §136.6 was amended to increase the minimum bid threshold from $2,500 to $25,000 for Caltrans right-of-way clearance and maintenance projects, such as the removal of mud and snow slides, demolition of derelict buildings and equipment rental. Under the amended law, highway maintenance contracts for $25,000 and less do not require solicitation of bids and are not subject to the State Contract Act.
SB 1613, amending Streets and Highways Code §136.6
– John Foust
DESIGN-BUILD
California Cities Permitted to Enter into Design-Build Contracts
Public Contract Code §20175.2 was amended to allow any California city to utilize design-build contracting on building construction projects costing $1 million or more, subject to a sunset date of January 1, 2016. Cities that had been allowed, by prior legislation, to utilize design-build without a cost floor (Stanton, Victorville, and any city in Solano or Yolo counties) are not subject to the $1 million cost floor until the prior law’s sunset date of January 1, 2011.
Notably, streets, highways, public rail transit, and water resource facilities and infrastructure are specifically excluded from the statutory definition of “project.”
AB 642, amending Public Contract Code §20175.2
– William Hale
Up to 20 Waste and Recycling Projects Can Be Built Using Design-Build Contracts
The Public Contract Code was amended with §§20193-20195 to allow up to 20 waste and recycling projects statewide to be constructed using design-build contracting.
Only certain agencies (cities, counties, cities and counties, and special districts) operating wastewater, solid waste management or water recycling facilities are eligible to utilize design-build and only if the project’s cost exceeds $2.5 million.
Qualified agencies that want to use design-build for a project must apply to the state Office of Planning and Research to obtain approval to be one of the 20 authorized projects.
A sunset provision is incorporated, taking effect on either the Legislative Analyst’s required report back to the Legislature upon completion of the 20 authorized projects or January 1, 2020, whichever is earlier. As with §20175.2, these new statutes were made expressly inapplicable to streets, highways, public rail transit or other types of water resource facilities.
AB 642, adding Public Contract Code §§20193 to 20195
– William Hale
More Transit Projects Allowed to Use Design-Build
Public Contract Code §20209.7 (f) (2) previously required transit operators to award design-build contracts on non-rail transit projects either to the lowest responsible bidder or by using the best value method but only if the project cost exceeded $2.5 million. Public Contract Code §20209.7(f)(3) was added to remove this cost floor for contracts “[f]or the acquisition and installation of technology applications or surveillance equipment designed to enhance safety, disaster preparedness, and homeland security efforts.”
AB 387, amending Public Contract Code §20209.7
– William Hale
Sonoma Valley Health Care District Allowed to Utilize Design-Build Contracting
Health and Safety Code §32132.5 was added to allow the Sonoma Valley Health Care District to utilize design-build contracting for construction of a hospital or health facility building at the Sonoma Valley Hospital. Design-build contracting procedures made available to counties by Public Contract Code §20133 were made applicable to the district.
SB 1699, adding Health and Safety Code §32132.5
– William Hale
SOLAR / RENEWABLE ENERGY
Owners of Solar Collectors Now May Block Solar Shading
Existing law prevents a person who owns or is in control of property from allowing vegetation to shade a neighbor’s solar collector. Vegetation planted before installation of the solar collector is exempt from this requirement.
Amendments to the Public Resources Code allow owners installing solar collectors to provide written notice by certified mail to affected property owners. Under the new laws, a violation is a private nuisance rather than a public nuisance once the owner of the solar collector provides the required written notice.
The amendment also redefines “solar collector” to include a device or structure installed on the ground if it cannot be installed on the roof of the building. It excludes a device or structure that is designed and intended to offset more than the building’s electricity demand.
SB 1399, amending Public Resources Code §§25981, 25982, 25984 and 25985; adding Public Resources Code § 25982.1; repealing and adding Public Resources Code §25983
– Gabriel Dietz
State Must Develop Uniform Criteria for Evaluating Solar Design Plans for Schools
Under existing law, and with only a few exceptions, the Department of General Services is required to supervise the design, construction, and reconstruction or alteration of any school building to ensure compliance with, among other things, California rules, regulations and building standards.
Education Code §17282.5 was amended to require the Division of the State Architect, on or before January 1, 2010, to develop uniform criteria for conducting the pre-approval process of solar design plans, including structural plans and calculations, for school facility projects. The amendment also requires that the criteria include provisions to ensure fire and life safety.
Under the amendment, DGS is required to review a school district’s solar design plan application within 45 calendar days of receipt of a complete application. If DGS requests that the school district revise a submitted application, DGS must act on the revised application within 10 days of receipt.
AB 1062, amending Education Code §17282.5
– Eric Casher
LICENSING AND REGULATION
Contractor’s License Bond Laws Made More Consumer Friendly
The Business and Professions Code was amended to make three changes to the law governing actions on a contractor’s license bond.
First, the jurisdictional limit of Small Claims Court for actions against a surety on a license bond was increased from $4,000 to $6,500.
Second, the class of persons who can bring an action on a bond without having to show willful and deliberate violation of the law was expanded to include a property owner contracting for construction of a single-family dwelling who is damaged as a result of a violation of the licensing law, as long as the property is not intended or offered for sale at the time the damages were incurred.
Third, the statute of limitations for actions on a contractor’s license bond was extended for contractors whose licenses were inactivated, canceled or revoked so that any action against the bond must be brought within two years of the date the license would have expired had the license not been inactivated, canceled or revoked.
SB 1432, amending Business and Professions Code §§7071.5, 7071.10 and 7071.11; amending Code of Civil Procedure §116.220
– John Foust
GREEN CONSTRUCTION
California Green Collar Jobs Council Created
The California Green Collar Jobs Act of 2008 declares that the state long has been a national and international leader on environmental, natural resource, pollution prevention and energy issues. It notes that enactment of laws relating to climate change, renewable energy, energy efficiency and alternative transportation fuels has resulted in billions of dollars of investment capital flowing into the state for research, development and commercialization of new green and clean technologies and is indicative of the rapidly growing economy in this area. The growth of the green economy will bring an increased demand for a highly skilled and well-trained “green collar” workforce.
The California Green Collar Jobs Act of 2008 requires the California Workforce Investment Board to establish a Green Collar Jobs Council made up of representatives from California’s K-12 school and higher education systems, labor unions, the environmental community, workforce development programs, non-governmental organizations, non-profit organizations and private sector industries. The Green Collar Jobs Council is responsible for consulting with those groups and developing a comprehensive array of programs, strategies and resources to address the workforce needs that accompany California's growing green economy and for establishing green job training programs.
AB 3018, amending Unemployment Insurance Code §§15000, et seq.
– Brienne Wesolek
Green Building Standards Emphasized with Special Revolving Fund
All state agencies that adopt or propose adoption of any building standard are required to first submit the building standard for approval to the California Building Standards Commission.
Section 18930.5 was added to the Health and Safety Code and requires the commission to adopt, approve, codify, update and publish green building standards for any occupancy for which no state agency has the authority or expertise to propose green building standards.
New §§18931.6 and 18931.7 require cities and counties to collect a fee from any applicant for a building permit (up to $4 per $100,000 in valuation but not less than $1) and to transmit the fees to the commission for deposit in the Building Standards Administration Special Revolving Fund. This fund must be available to carry out existing laws relating to building standards, with emphasis placed on development, adoption, publication, updating and educational efforts associated with green building standards.
New §18938.3 authorizes the commission and the Department of Housing and Community Development to use, as the basis for the California Building Standards Code, certain model codes adopted by the commission as the basis for the 2007 triennial edition of the California Building Standards Code.
SB 1473, amending Health and Safety Code §§18930.5, 18931.6, 18931.7 and 18938.3
– Brienne Wesolek
SCRAP DEALERS
New Reporting Requirements and Higher Fines for Junk Dealers and Recyclers
Existing law requires junk dealers and recyclers to keep detailed records of all sales and purchases made in the course of their business. Now, junk dealers and recyclers must report the information contained in those records to their city’s chief of police or their county’s sheriff both on a monthly basis and as requested.
Fines for record-keeping violations have increased. The fine for first offenses now is $1,000, for second offenses is $2,000, and for third and subsequent offenses is $4,000. For the third and any subsequent offense, the violator is not only subject to imprisonment for a minimum six months as previously required but also is subject to a court order prohibiting the violator from engaging in the business of junk dealing or recycling for a minimum of one year.
The improper disclosure of these records also is a crime. Any unauthorized disclosure of the information contained in these records is subject to a civil penalty of up to $5,000.
Previously, police could place a hold on property when they had probable cause to believe the property was stolen. Junk dealers and recyclers were responsible for the cost of storing property believed to be stolen. The new law requires that, in addition to storage costs, junk dealers and recyclers must pay the rightful owner of property that was in fact stolen for any reasonable collateral damage resulting from commission of the theft.
AB 844 and SB 447, amending Business and Professions Code §§21606, 21606.5, 21608 and 21609 and adding Business and Professions Code §§21608.3 and 21608.5
– Benjamin Heath
WORKER’S COMPENSATION
Division of Workers’ Compensation Adopts Electronic Filing
Previously, after an employee suffered an occupational injury or illness, an employer was required to file a report with the Division of Labor Statistics and Research. Insured employers were exempted from this obligation, but they were required to file a report with their insurer on a form prescribed by DLSR.
Under the amended law, an insured employer, following an occupational injury or illness to one of its workers, now must file a report with its insurer on a form designated by the Administrative Director of the Division of Workers’ Compensation. Self-insured employers, the state and insurers now must file an electronic report using the DWC’s new Electronic Adjudication Management System (EAMS).
AB 2181, amending Labor Code §6409.1
– Rowan Mason
BUSINESS HELP
Small and Emerging Contractor's Technical Assistance Program Established
To assist the state in meeting its goals for small business participation in state procurement contracts, Government Code §§65054.3 and 14137 were amended to create the Small and Emerging Contractor's Technical Assistance Program (SECTAP).
SECTAP will be administered by Caltrans and provides small and emerging contractors with training and technical assistance necessary to obtain surety bond guarantees from the Small Business Administration.
SECTAP also requires Caltrans to conduct outreach efforts to small contractors throughout state. The legislation seeks to encourage small businesses to participate in infrastructure projects funded by the Infrastructure Bond Act of 2006 by providing them with training in areas that pose particular challenges to smaller contractors, such as the procurement of a surety bond.
Caltrans is authorized to use up to $200,000 of available state funds for the SECTAP program. Caltrans is permitted to charge a fee, not to exceed $50, to program participants. The SECTAP program will remain in existence until at least January 1, 2013.
AB-2376, amending Government Code §65054.3; repealing and adding Government Code §14137
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For more information about the issues covered in this report, please contact Clark Thiel in our San Francisco office at 415-848-4934 or at thielc@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2009 Howrey LLP
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