LEGAL ISSUES


SB 465 Has Major Impact on State’s Construction Industry


By Eric Firstman, Meyers Nave O


n January 1, 2017, Senate Bill 465, as signed by Governor Jerry Brown, became law in


response to the June 2015 apartment balcony collapse in Berkeley, California that killed six students and injured seven more. Te law’s purpose and its


immediate and long-term impacts on the construction industry can best be understood in the context of the press release issued by its co-author, State Senator Jerry Hill. Te release states that the new law “ensures that state agencies tasked with overseeing the construction industry are taking appro-


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responsibility or qualifications of the claimant.


What about claims by subcontractors? If a subcontractor or lower-tiered subcontractor (e.g.,


second-tier subcontractor) has a claim, the direct contractor may present such claim on behalf of the subcontractor or lower-tiered subcontractor to the public entity. A subcon- tractor may request in writing, either on its own behalf or on behalf of a lower-tiered subcontractor, that a direct contractor present a claim for work that was performed by the subcontractor or a lower-tiered subcontractor on behalf of the subcontractor. Within 45 days of receipt of the request, the contractor shall notify the subcontractor in writing as to whether the direct contractor presented the claim to the public entity and, if the direct contractor did not present the claim, provide the subcontractor with a statement of the reasons for not having done so. 


Garret Murai is a partner and construction attorney at


Wendel, Rosen, Black & Dean LLP in Oakland, California. He is also the editor of the firm’s California Construction Law Blog which can be found at www.calconstructionlawblog.com.


www.AGC-CA.org


priate steps to identify bad actors and improve building standards.” For the construction industry, it


is especially important to understand that SB 465, and its focus on “bad actors” and improving the building code, passed unanimously in the Assembly and Senate. As a result, the construction industry should take compliance very seriously and actively participate in the working group studies that the law mandates be completed by January 1, 2018. Te purpose of these working group studies is to assess: (1) potential changes in related building codes and (2) possible self-reporting of judgments, arbitration awards and settlement payments of


negligent construction claims and other issues relevant to contractor licensing status. We examine a few of the key


impacts in this article.


Impact #1: Self-Reporting Convictions and Multi-Agency Reporting of Actions Against Contractors


Beginning January 1, 2017, licensed


contractors must self-report, in writing and within 90 days of their first knowledge, to the Contractors’ State License Board (CSLB) any conviction of the licensee for any felony or any other crime that is “substantially related to the qualifications, functions,


In uncertain times... lie the greatest opportunities.


Wendel Rosen’s construction attorneys help bring clarity to the rapid changes–in technology, project delivery systems and risk management–that are shaping the industry. Today’s construction companies need an innovative legal team that can offer a clear vision. We bring things into focus.


See what we’re talking about, visit: www.calconstructionlawblog.com


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