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2016 SUMMARY OF NEW CALIFORNIA LAWS THAT MAY IMPACT THE CONSTRUCTION INDUSTRY

Last year the California legislature passed and the governor approved a large number of new bills which will impact the construction industry. The remainder of this article sets forth a brief summary of a number of the new California construction industry related laws.

Bill Number

What it does

Public Works - Transportation

SB 63

Includes port or harbor infrastructure among the projects that may be financed by an enhanced infrastructure financing district.

SB 64

Requires that the annual report prepared by the California Transportation Commission include specific, action-oriented, and pragmatic recommendations for legislation to improve the transportation system.

Competitive Bidding

AB 1171

Authorizes regional transportation agencies to use the Construction Manager/General Contractor project delivery method to design and construct certain expressways that are not on the state highway system not on the state highway system if: (1) the expressways are developed in accordance with an expenditure plan approved by voters, (2) there is an evaluation of the traditional design-bid-build method of construction and of the Construction Manager/General Contractor method, and (3) the board of the regional transportation agency adopts the method in a public meeting. The bill requires the regional transportation agency to provide a report, containing specified information, to its governing body upon completion of a project using the Construction Manager/General Contractor method.

AB 1358

Effective July 1, 2016 a school district, with the approval of the governing board of the school district, is authorized to procure design-build contracts for public works projects in excess of $1,000,000, awarding the contract to either the low bid or the best value.

AB 1431

Extends authorization for "job order contracting", previously authorized only for the Los Angeles Unified School District, to all school districts in California until January 1, 2022 if the school district has entered into a project labor agreement or agreements that will apply to all public works in excess of $25,000 undertaken by the school district through at least December 31, 2021, regardless of what contracting procedure is used to award that work.

AB 1185

Authorizes the Los Angeles Unified School District, until December 31, 2020, to use "best value" procurement instead of traditional "lowest responsible bidder" for projects over $1,000,000. The district must report to the Legislature during and at end of the pilot program. "Best value" means a procurement process whereby the selected bidder may be selected on the basis of objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications. By January 1, 2020, at least 60 percent of the skilled journeypersons on the job, whether for the direct contractor or subcontractors at every tier, must be graduates of an approved apprenticeship program.

AB 566

Any lease-leaseback contract for school construction entered into after January 1, 2016 must contain requirements to use a skilled workforce by employing at least 30% journeymen who have graduated from approved apprenticeship programs.

Contractors License Law

SB 560

Authorizes the CSLB's enforcement division to enforce the obligation to secure the payment of valid and current workers' compensation insurance. The enforcement division is entitled to free access to work sites and may issue notices to appear in court for failing to have proof of workers compensation insurance on site. Enforcement personnel do not have the power to arrest. Additionally, this law makes it a misdemeanor crime to falsely certify exemption from workers compensation requirements or to employ a worker without having workers compensation insurance in place.

Design/Build

SB 762

Establishes a pilot program to allow the Counties of Alameda, Los Angeles, Riverside, San Bernardino, San Diego, Solano, and Yuba to select a bidder on the basis of best value for construction projects in excess of $1,000,000. "Best value" means a value determined by evaluation of objective criteria that relate to price, features, functions, life-cycle costs, experience, and past performance. A best value determination may involve the selection of the lowest cost proposal meeting the interests of the department and meeting the objectives of the project, selection of the best proposal for a stipulated sum established by the procuring agency, or a tradeoff between price and other specified factors. Bidders must verify specified information under oath. The Counties' boards of supervisors must report to the Legislature about their experiences before January 1, 2020, at which time the program sunsets unless extended by a future bill.

Employer/Employee

AB 304

Clarifies the Healthy Workplaces, Healthy Families Act of 2014 which was enacted on July 1, 2015, and Specifies that the law only applies to an employee who works in California for the same employer for 30 days or more within a year. Also provides that an employer may use a different accrual method, other than providing one hour per every 30 hours works, under specified conditions.

AB 622

Expands the definition of an unlawful employment practice to prohibit an employer from using the E-Verify system at a time or in a manner not required by a specified federal law or not authorized by a federal agency memorandum of understanding to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds. Establishes a civil penalty of $10,000 for an employer for each violation of these provisions.

AB 970

Authorizes the Labor Commissioner to investigate and, upon a request from the local entity, to enforce local laws regarding overtime hours or minimum wage provisions and to issue citations and penalties for violations, except when the local entity has already issued a citation for the same violation.

SB 358

Prohibits an employer from paying any of its employees at wage rates less than those paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility.

AB 1245

Requires an employer with 10 or more employees, beginning on January 1, 2017, to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer.

Prevailing Wages

AB 219

Effective July 1, 2016, expands the application of prevailing wage to include the hauling and delivery of ready-mixed concrete to any state or local public works project.

AB 852

Expands the application of prevailing wage to include construction, alteration, demolition, installation, or repair work done under private contract on a project for a general acute care hospital when the project is paid for with the proceeds of conduit revenue bonds that were issued on or after January 1, 2016.

Public Works

AB 552

Any provision in a public works contract entered into on or after January 1, 2016, that expressly requires a contractor to be responsible for delay damages is not enforceable unless the delay damages have been liquidated to a set amount and identified in the public works contract. This section applies to the state, the Regents of the University of California, a city, charter city, county, charter county, district, public authority, municipal utility, and any other political subdivision or public corporation of the state. It does not apply to CA Departments (Water Resources, General Services, Boating and Waterways, Corrections and Rehabilitation, Military, and Transportation). Contracts may contain separate clauses for separate parts of the work.

The list is not intended to be an all-inclusive list of new construction laws, but rather sets forth the primary construction related new laws. If you are interested in other new laws or want to review the full text of the bills, they can be found on the California Legislative Information page at http://leginfo.legislature.ca.gov.

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