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New Laws - 1997

Summary of law changes for the 1996-1997 Legislative Session

This is a summary of the more significant legislation that the Contractors State License Board has followed during the 1996 legislative session. All of the bills in the summary have been signed into law (chaptered), and become effective on January 1, 1997, unless noted. Copies of chaptered bills are available at www.leginfo.ca.gov or by calling (916) 445-2323.

AB 597 by Assembly Member Speier (Chapter 38, Statutes of 1996, Cemeteries) among other things requires the Department of Finance to authorize a loan of $2,559,000 from any special fund or funds under the authority of any board, commission, committee or bureau of the Department of Consumer Affairs, to the Cemetery Fund for the 1995-96 fiscal year. Requires the loan to be repaid no later than January 1, 2001. Code Sections affected: Business and Professions Code Sections 210, 9652, 9652.1. Signed by the Governor May 3, 1996. Urgency Statute Effective May 3, 1996.

AB 734 by Assembly Member Conroy (Chapter 279, Statutes of 1996, Public Contracts: Nonresident Contractors) requires a nonresident contractor to disclose to an awarding agency any and all bid preferences provided to that contractor by the state or country in which it has its principal place of business. Code Sections affected: Public Contract Code Section 6107. Signed by the Governor July 25, 1996.

AB 2334 by Assembly Member Cortese (Chapter 581, Statutes of 1996, Geothermal Heat Exchange Wells) among other things specifies that no person shall undertake to dig, bore, drill, deepen, reperforate, abandon or destroy a geothermal heat exchange well unless the person responsible for that construction, alteration or abandonment possesses a C-57 Water Well Contractor's License. Code Sections affected: Water Code Sections 13700, 13701, 13713, 13750, 13750.5, 13751, 13752, 13800.5. Signed by the Governor September 17, 1996.

AB 2396 by Assembly Member Archie-Hudson (Chapter 985, Statutes of 1996 Home Improvement Contracts) specifies that a change order shall not be enforceable against the person contracting for the work unless it clearly sets forth the scope of work encompassed by the change-order and the price to be charged for the changes. Specifies that failure to comply with these requirements does not preclude the recovery of compensation for work performed based upon quasi contract, quantum meruit, restitution or other similar legal or equitable remedies designed to prevent unjust enrichment. Code Sections affected: Business and Professions Code Section 7159. Signed by the Governor September 27, 1996.

AB 2494 by Assembly Member Margett (Chapter 282, Statutes of 1996, Contractors: Disciplinary Disclosure) revises the contract notice disciplinary disclosure requirementscurrently contained in Business and Professions Code Section 7030 by requiring disclosure of any license suspension or revocationwhich occurred two or more times within an eight year period. Also provides for an exemption from the $2000 cap on civil penalty assessments (contained in Business and Professions Code Section 7099.2), thereby allowing the penalty provisions contained in Section 7030(b)(4) to prevail. (Sponsored by the Contractors State License Board). Code Sections affected: Business and Professions Code Sections 7030, 7030.1, 7099.2. Signed by the Governor July 25, 1996.

AB 2823 by Assembly Member Harvey (Chapter 936, Statutes of 1996 Business Licenses) requires a city or county, before it issues a business license to a person to conduct business as a contractor, to verify that the person is licensed by the Contractors State License Board. Code Sections affected: Business and Professions Code Sections 16000, 16100. Signed by the Governor September 25, 1996.

AB 2958 by Assembly Member Harvey (Chapter 145, Statutes of 1996 Unlicensed Activity, Statute of Limitations): extends the statute of limitations from 3 to 4 years for criminal and administrative action against an unlicensed contractor and clarifies that the complaint must be filed within 4 years from the date of the bid, contract, completion or abandonment of the work whichever occurs last. (Sponsored by the Contractors State License Board). Code Sections affected: Business and Professions Code Sections 7028, 7028.9. Signed by the Governor July 11, 1996.

AB 3305 by Assembly Members Setencich/Speier (Chapter 925, Statutes of 1996 Swimming Pools: Safety: Disclosure) among other things enacts the Swimming Pool Safety Act to establish certain safety standards requiring swimming pool enclosures, safety pool covers or exit alarms. Makes these standards applicable commencing January 1, 1998, to a private, single-family home for which a construction permit for a new swimming pool has been issued on or after January 1, 1998. Requires any person entering into an agreement to build a swimming pool to give the consumer notice of the requirements of this bill. Code Sections affected: Civil Code Section 1102.6; Health and Safety Code Sections 18942, 115920 et. seq. Signed by the Governor September 25, 1996.

AB 3355 by Assembly Member Firestone (Chapter 331, Statutes of 1996 Contractors: Workers' Compensation) clarifies that the filing of a false workers' compensation exemption statement constitutes grounds for disciplinary action. (Sponsored by the Contractors State License Board). Code Section affected: Business and Professions Code Section 7125. Signed by the Governor July 29, 1996.

SB 258 by Senator O'Connell (Chapter 338, Statutes of 1996 Home Inspectors) defines terms related to paid home inspections, establishes a standard of care for home inspectors, and prohibits certain inspections in which the inspector or the inspector's employer has a financial interest. Provides that contractual provisions seeking to waive the statutory duty of care or limit the liability of a home inspector to the cost of the home inspection report are contrary to public policy and are invalid. Provides that the time for commencement of a legal action for breach of duty arising from a home inspection report shall not exceed 4 years from the date of inspection. Code Sections affected: Business and Professions Code Sections 7195 et. seq. Signed by the Governor August 19, 1996.

SB 577 by Senator Rosenthal (Chapter 152, Statutes of 1996 Seismic Gas Shutoff Devices: Water Heaters) replaces references to earthquake sensitive or seismic gas shutoff devices. Requires the State Architect to certify specified gas shutoff devices that are activated by phenomena other than motion. Exempts from its definition of "seismic gas shutoff device" any device installed within a gas distribution system owned or operated by a public utility. Revises the bracing requirements for water heaters to apply to all new and replacement water heaters and all existing residential water heaters and requires any water heater to be secured in accordance with the Uniform Plumbing Code, except when superseded by the California Plumbing Code or local requirements. Code Sections affected: Health and Safety Code Sections 19180 et. seq. Signed by the Governor July 11, 1996. Urgency Statute, Effective July 11, 1996.

SB 1486 by Senator Calderon (Chapter 526, Statutes of 1996 Health and Safety) among other things, provides that certification as an asbestos consultant or site surveillance technician is not required when a licensed contractor or registered asbestos abatement contractor meeting certain training requirements takes no more than 12 bulk samples of suspected asbestos-containing material in connection with a construction project on a residential dwelling for the purpose of bid preparation for asbestos abatement, evaluating exposure to its own employees during construction or asbestos abatement, or determining for its own purposes or for the purpose of communicating whether or not a contract for asbestos abatement has been satisfactorily completed. Prohibits licensed contractors and asbestos abatement contractors from providing professional health and safety services or performing any asbestos risk assessments. Provides that a bid for asbestos abatement may communicate the results and location of sampling for the purpose of asbestos and how the asbestos will be abated. Code Sections affected: Business and Professions Code Sections 7180, 7187. Signed by the Governor September 16, 1996.

SB 1557 by Senator Mountjoy (Chapter 712, Statutes of 1996 Contractors: Building Permits)

  1. Makes a conforming change to Business and Professions Code Section 7028.1 to allow a contractor to bid for the installation or removal of an underground storage tank without certification, provided the actual work is subcontracted to a contractor who is certified.
  2. Amends Business and Professions Code Sections 7108.5 and 7108.6 to specify that the two percent penalty for failure to pay a subcontractor is for the benefit of the subcontractor who has not been paid in accordance with the provisions of those sections.
  3. Amends Health and Safety Code Section 19851 to permit state agencies to order the production of building plans for inspection copying and use in evidentiary, administrative hearings. (Sponsored by the Contractors State License Board).

Code Sections affected: Business and Professions Code Sections 7028.1, 7108.5, 7108.6; Health and Safety Code Section 19851. Signed by the Governor September 21, 1996.

SB 1597 by Senator Hurtt (Chapter 528, Statutes of 1996 Contractors: License Fees) requires the Contractors State License Board, on or before July 1,1997, and biennially thereafter, to reduce the amount of license fees collected in order to generate revenues sufficient to maintain the Board's reserve fund at a level approximately equal to 3 months of annual authorized Board expenditures. States legislative intent that fees not be increased but, instead, that reserve requirements be lowered, thereby triggering lower fees or credits. (Sponsored by the Department of Consumer Affairs on behalf of the Contractors State License Board). Code Sections affected: Business and Professions Code Section 7138.1. Signed by the Governor September 16, 1996. Effective January 1, 1997 (or on or before July 1, 1997).

SB 1748 by the Committee on Housing and Land Use (Chapter 799, Statutes of 1996 Housing and Land Use Omnibus Act of 1996) among other things, this bill provides cities and counties more flexibility in the placement of various declarations on building permits. Code Sections affected: Health and Safety Code Section 19825 (among others). Signed by the Governor September 22, 1996.

SB 1910 by Senator Johannessen (Chapter 501, Statutes of 1996 Administrative Regulations) requires the Office of Administrative Law to make the California Code of Regulations available on the Internet, free of charge, on and after July 1, 1998, and authorizes the office to contract with another state agency or private entity in order to provide the service. Code Sections affected: Government Code Section 11340.1, 11344. Signed by the Governor September 16, 1996. Effective January 1, 1997 (or on or before July 1, 1998).

SB 2002 by Senator Ayala (Chapter 287, Statutes of 1996 Contractors: Licensing Exemptions) exempts from the provisions of the Contractors License Law, an admitted surety insurer whenever that surety insurer engages a contractor to undertake the completion of a contract on which a performance or completion bond was issued by the surety insurer, provided all actual construction work is performed by duly licensed contractors. Code Sections affected: Business and Professions Code Section 7044.2. Signed by the Governor July 25, 1996.

SB 2045 by Senator Rosenthal (Chapter 684, Statutes of 1996 Consumer Protection: Mortgage Brokers) provides that it is an unfair or deceptive act or practice for a mortgage broker or lender directly or indirectly to use a home improvement contractor to negotiate the terms of any loan that is secured, whether in whole or in part, by the residence of a borrower and which is used to finance a home improvement contract or any portion thereof. Specifies that the bill is not to be construed to either authorize or prohibit a home improvement contractor from referring a consumer to a mortgage broker or lender; however, a home improvement contractor may refer a consumer to a mortgage lender or broker if that referral does not violate Section 7157 of the Business and Professions Code or any other provisions of law. A mortgage lender or broker is also permitted to purchase an executed home improvement contract if that purchase does not violate Section 7157 of the Business and Professions Code or any other provision of law. Code Sections affected: Civil Code Section 1770. Signed by the Governor September 20, 1996.

 
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