New 2014 Laws May Affect Your Business

The New Year rings in a host of new laws that impact licensed contractors. Following is a summary of major changes to contractor laws, effective January 1, 2014.

Fraudulent Use of License – CSLB can now take administrative action against any licensed or unlicensed contractor who commits violations related to the fraudulent use of a contractor license. Senate Bill 261 added §7114.2 to the Business and Professions Code (B&P Code).

Qualifiers – CSLB is now able to discipline a qualifier and the licensed entity they are qualifying when the qualifier is not actively involved in the construction activities of the license they are representing. In addition to administrative penalties, the individual falsely serving as a qualifier on the license can be charged with a misdemeanor, and be sentenced to serve up to six months in jail, and pay a fine from $3,000-$5,000, or both, if convicted. SB 262 amended §7068.1 of the B&P Code.

Incomplete License Renewal – This new law, created by SB 822, gives a break to CSLB licensees who submit an incomplete renewal application on or before the license expiration date. The application will be sent back by CSLB with an explanation, and the applicant will now have 30 days to correct and resubmit the renewal without a renewal delinquency fee. The law amends §7026.1, §7065.3, §7114, and §7141 of the B&P Code.

Fire Protection Systems – Licensed C-36 Plumbing contractors now will be allowed to install residential fire protection systems for one- or two-family homes. The law created by AB 433 will stay in effect until January 1, 2017. The law amends §7026.12 and §7057 of, and repeals §7026.13 of the B&P Code.

Excavations – Regional Notification Centers will be required, through AB 811, to compile information provided by operators and excavators regarding facility incidents and make that information available in annual reports and on their websites. The law amends §4216.6 of the Government Code relating to excavations.

Limited Liability Companies – Contractors licensed as a limited liability company (LLC) will be allowed to obtain statutorily required liability insurance from a surplus line insurer. AB 1236 amended B&P Code §7071.19.

Bidding Practices – Contractors making public works project bids or offers must list each subcontractor license number on those documents. AB 44 amended §4104 of the Public Contract Code.

Public-Private Partnership Agreements – Local governments' public-private partnership agreements for fee-producing infrastructure projects must include performance bonds and payment bonds. AB 164 amended §5956.6 of the Government Code.

Prevailing Wage Law – Charter cities that don't require contractors to comply with the state's prevailing wage law on any public works contract cannot receive nor use state funding or state assistance for those construction projects. SB 7 added §1782 to the Labor Code.

Water-Conserving Devices – Permit applicants for all building alterations or improvements to single-family residential real estate must replace all non-water-conserving plumbing fixtures with water-saving fixtures as a condition of receiving final permit approval from a local building department. Also, SB 407 requires that all noncompliant plumbing fixtures in any multifamily residential real property and commercial residential real property must be replaced with water-saving fixtures when specified renovations are made. The new law adds §1102.155 to, and Article 1.4 (commencing with §1101.1) to Chapter 2 of Title 4 of Division 2 of, the Civil Code, relating to water conservation.