State Legislation
The legislature considered several interesting hold over issues from 1999 this week that has a direct impact on the construction industry. January 14th was the deadline for Policy Committees to hear a report to Fiscal Committees fiscal bills introduced in their house in 1999. Any of these bills not passed by their house of origin by January 31 are dead for the session. Legislation of note:
AB 1219 (Kuehl) - This bill was being amended right up to the time of the hearing and the actual amendments will not be in print until next week. AB 1219 was originally intended to prevent new development of 200 units or more from taking water from existing users, including agriculture and manufacturers, in drought years. To gain approval of the committee, provisions relating to drought years were removed. The soon to be amended version simply requires local governments to ensure that water for "reasonable needs of the project" is or clearly will be available when the development is built. However, the author stated she intends to somehow amend the bill to require consideration of drought son water supplies. Specific reference to drought year impacts was omitted under intense pressure from opponents, including CBIA and local governments, which contends that the state must provide money and tools to help local government develop water supplies if it imposes such a restriction.
AB 1221 (Dutra) - This bill was passed by the Assembly Housing and Community Development Committee. Sponsored by CBIA, this measure establishes the California Homebuyer Protection and Quality Construction Act of 2000. Specifically, this bill authorizes participating homebuilders to offer home construction warranties as a condition of the sale of multifamily housing units pursuant to which the homebuilder shall be responsible for the correction of any construction defect covered by the warranty. Such warranties shall last for a minimum of 10 years, with the protection under the warranty beginning on the date of the substantial completion of the residential home to which it applies. The warranty may not be cancelled or changed at any time during the term of the warranty. This legislation was introduced to respond to decrease in development of multifamily projects during the last decade that is due largely to the proliferation of baseless lawsuits. The bill was double referred and will be herd next by the Assembly Judiciary committee that is more trial lawyer friendly.
AB 1228 (Davis) - Despite extensive amendments, the Assembly Insurance Committee defeated this proposal to require licensed contractors to carry liability insurance. Sponsored by Licensed Information Services, AB 1288 sought to require all licensed contractors, as a condition of licensure, to file a certificate of liability insurance with the Contractor’s State License Board in the amount of $1 million per occurrence. The bill further imposed an automatic suspension of the contractor’s license upon failure to maintain liability insurance. It also made failure to comply with the law a misdemeanor. The sponsor proposed amendments to lower the policy limits to $100,000 and specify the bill requirements were for liability insurance only, not errors and omissions coverage. Information provided the committee indicated that even at the $100,000 limit, premiums for such coverage average $500. Roofing contractors were the most at over $1200. Several committee members voiced concern that requiring insurance coverage could serve a barrier of entry to many small start-up contractors and that it was the publics’ obligation to inquire whether a contractor being hired was adequately covered by insurance.
Supposedly, there is going to be a loosely formed caucus chaired by Assembly Member Pat Wiggins (D– Santa Rosa) to address urban sprawl. I have not seen anything publicly announced; only a call from an AP reporter doing some background research.
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