September 30, 2016 was the last day for the Governor to sign bills introduced in the two year 2015-2016 session of the California State Legislature. Here is how two bills of interest to firms in the construction industry fared in that session.
SB 465, as amended in response to the Berkeley balcony collapse, would have required contractors to report to the Contractors State License Board any civil litigation settlement of $50,000 or more, or any arbitration award of $25,000 or more, where such settlement or award involved the contractor’s fraud, deceit, misrepresentation, breach of contract, negligence or incompetence in the practice of contracting.
But contractor trade organizations strongly opposed the bill, and SB 465, as ultimately passed and signed by the Governor, was watered down to require the Contractors State License Board to consult with licensees, consumers, and other interested stakeholders in order to prepare a study of judgments, arbitration awards, and settlements that were the result of claims for construction defects for rental residential units and, by January 1, 2018, report to the Legislature the results of the study to determine if the board’s ability to protect the public would be enhanced by regulations requiring contractor licensees to report judgments, arbitration awards, or settlement payments of those claims.
SB 885 would have cut back the defense obligations of design professionals under contractual indemnity clauses. The bill passed in the Senate but died in the Assembly. The chief opponents were cities and other state governmental agencies, especially small special purpose districts.
The two year 2017-2018 legislature session will convene on December 5, 2016, and thousands of new bills will be introduced starting on that date.
Article submitted by:
Richard K. Bauman, Law Offices of Richard K. Bauman
57 Post Street, Suite 710, San Francisco, CA 94104
Tel: 415 982-5230 • Fax: 415 520-2076
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