Legislative Report 2006

AGC Government Affairs
& Legislative Report 2006
Chair’s Report
2006 was a landmark year for AGC and the construction industry.
AGC scored many victories in the final year of the 2005-2006 Legislative Session.
We scored an even bigger victory at the polls in November, with the passage of
Propositions 1A through 1E which included the massive $37 billion infrastructure
package placed on the ballot by the Governor and Legislature. The voter’s
approval of these five measures will have a lasting impact on our industry for
years to come. Now, the voters and political leaders will be looking to AGC and
others in the industry, to meet the challenge to construct the hundreds of highway,
flood control, housing, and school projects that will be made available
to bid over throughout the next several years.
Governor Schwarzenegger was re-elected and 51 legislators who will start the 2007-2008 Legislative
Session will be new to the legislative seats they will fill. Out of the 38 new members in the Assembly,
only 3 have had previous legislative experience, and out of the 13 new members in the Senate, 12 have
previously served in the Assembly. A continuing challenge for AGC will be to familiarize themselves
with the new legislators and to educate them on the many issues that will be facing our industry in the
future.
I am privileged to have served as your Legislative Chair for the last three years. I am pleased to “pass
the gavel” to David Colon who will oversee AGC’s legislative activities during the 2007-2008 Session of
the Legislature.
I want to thank the many contractors and associate members who give their time to serve on the
Legislative Committee. Without their input, it would be nearly impossible to take positions and work on
issues presented by the hundreds of bills introduced each year that impacts our industry.
Last but not least, I want to thank the AGC staff and in particular our three Legislative Advocates: Dave
Ackerman, Jamie Khan, and Paul Gladfelty for their exemplary job done during my tenure as your chair.
Sincerely,
Chuck Fletcher
Legislative Chair
AGC Government Affairs & Legislative Report 2006
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2006 Legislative Session
AGC had to wait until 30 days after the Legislature had adjourned - and until the last hours Governor
Schwarzenegger had to review bills sent to him by the Legislature – to declare all our legislative
victories for 2006.
AGC scored our final victories when Governor Schwarzenegger recorded his veto messages for the 2006
Legislative Session on the evening of September 30th.
2006 has been a long and intense legislative year by any standards. It began with non-stop negotiations
on the massive $222 billion infrastructure building program proposed by the Governor in January,
ending with actions taken by the Governor on legislation in the final hours he had to sign or veto bills.
Infrastructure Package Landmark 2006 Accomplishment
On November 7th, 2006, voters cast their ballots and approved the largest infrastructure package ever to
go before the public. Five propositions – one constitutional amendment and four separate bond measures
– will raise $37 billion for transportation, housing, school, and flood and levee construction. Proposition
1A also provides iron-clad protections for $1.4 billion in annual revenues generated by the passage of
Proposition 42 in 2000. Propositions 1A and 1B led in the voting by gaining approval by margins of
78% and 68% respectively.
The Governor and the Legislature, in a rare show of bipartisanship, agreed to place the infrastructure
package on the November ballot. Both Republican and Democratic leaders campaigned with the
Governor in support of the package. AGC worked closely with Governor Schwarzenegger and Senate
pro-Tem Don Perata on details of the package which further facilitated the bipartisan agreement.
AGC and its members led the construction industry in raising funds for the campaign by raising over $4
million to finance the hundreds of radio and television ads necessary to convey the importance of
infrastructure to the California lifestyle and
economy. In addition, AGC and its members
participated in countless campaign appearances
with the Governor and Senator Perata to push
for passage of the important bond measures.
Now, the major challenge is to keep faith with
the electorate and build the promised
infrastructure as quickly as possible. This will
be a major challenge for AGC and the industry.
Major Legislative Issues Decided in 2006
The infrastructure package may have been the
most visible action taken by the Governor and
the Legislature, but the Legislature also
presided over a thousand of other bills that had
significant impacts on the construction industry.
Several bills that received particular attention
from AGC included the following.
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Assembly Speaker Fabian Nunez, Senate Pro Tempore Don Perata, Dave Ackerman,
AGC Advocate, and Governor Schwarzenegger.
AGC Government Affairs & Legislative Report 2006
Construction Defect
AGC adopted a position last year to continue to oppose attempts by a segment of the subcontractor
industry to eliminate Type I indemnity agreements in commercial construction contracts. In 2005, the
subcontractor community passed legislation to eliminate Type I agreements as part of an overall effort to
provide insurance availability for commercial construction. AGC successfully excluded commercial
construction from application of this legislation.
In 2006 AGC was successful in sidetracking
SB 1581 (Dunn), which was sponsored by
the American Subcontractor’s Association
(ASA) and authored by Orange County
Senator Joe Dunn. It was ASA’s intension to
use this legislation to prohibit these types of
clauses in commercial contracts. AGC has
agreed to participate in meetings with other
construction organizations to attempt to craft
a proposal that can be supported by all
construction industry groups next year.
Apprenticeship Legislation
AB 2929 (Laird) was introduced to
standardize the criteria for new and
expanding apprenticeship programs. This
Governor Schwarzenegger, with Dave McCosker from Independent Construction,
measure was sponsored by the State Building
Russell Snyder, AGC East Bay District Manager and Assemblyman Guy Houston.
Trades with the assistance of the Division of
Apprenticeship Standards assisted in
developing some of the language. Although the final version of AB 2929 was close to addressing AGC
concerns, it still would have had a negative impact on programs such as the one being administered by
AGC San Diego. AGC was successful in convincing Governor Schwarzenegger to veto AB 2929 due to
an effective letter writing campaign that resulted in over a hundred letters being sent to the Governor
asking for a veto.
Worker’s Compensation Increases
One of Governor Schwarzenegger’s earliest victories was his reform of California’s costly worker’s
compensation system. In subsequent years, there have been attempts to dismantle the reforms. This year,
Governor Schwarzenegger vetoed SB 815 (Perata), a bill strongly opposed by AGC that would have
significantly increased permanent disability benefits under the worker’s compensation system, as well as
related changes which would have increased costs to the employer in the form of increased premiums.
AGC waged a letter writing campaign asking the Governor for a veto of SB 815. As reflected in his veto
message, the Governor responded by agreeing with several of AGC’s arguments.
AGC Government Affairs & Legislative Report 2006
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AGC Supported Legislation Signed into Law
AGC supported 15 bills that were approved by the Legislature and signed into law by the Governor.
Design-Build
There were over a dozen different bills introduced in the 2005-2006 Legislative Session dealing with
design-build, but only two of the measures were approved and
signed into law. AB 372 (Nation) continues design-build
contract authority for transit districts, and SB 535 (Runner)
extends design-build authority to the city of Victorville. Both
of these bills use the standard design-build authority language
that pre-existed in current statute. Efforts to extend designbuild authority to Caltrans work, or to specific highway
projects, were not approved. It is anticipated that several new
design-build legislative proposals will be introduced in the
Legislature in 2007, including a transportation authorization
proposal sponsored by the Governor’s Office through
Caltrans.
Excavation Projects
AB 463 (Tran) – Allows the use of power assisted equipment
Matich, Matich Corporation greets Governor
for excavating. AGC supported AB 463 which was sponsored Stephen
Schwarzenegger at an Inland Empire event.
by the Engineering Contractors Association. New technology
has been developed that utilizes power suction excavation
equipment which was not allowed to be used on public works projects without this legislation.
SB 1359 (Torlakson) – Establishes safeguards and protections for contractors who perform underground
excavation work. AGC is a member of the Underground Alliance, which worked with Senator Tom
Torlakson in developing and supporting this legislation. SB 1359 resulted from the aftermath of a fatal
excavation accident in Contra Costa County where contractors following utility markings of underground
facilities, ruptured an underground aviation fuel line, resulting in an explosion that killed several
construction workers. A bend in the line was not noted by the surface markings. SB 1359 requires
utilities to meet with the contractor prior to the start of excavation when high voltage or high pressure
fuel lines are within 10 feet of the planned excavation.
SB 1605 (Margett) – Makes clarifications in the laws governing underground excavations. This bill,
supported by AGC, clarifies when a contractor must notify a public agency when the contractor discovers
changed soil conditions from when the project was put out to bid.
Public-Private Partnerships
AB 521 (Runner) & AB 1467 (Nunez) – Authorize Caltrans and the Transportation Commission to
contract for Public Private Partnerships for transportation projects. These two bills were part of the
infrastructure bond package and will focus primarily on “goods movement” projects funded in
Proposition 1B that will generate fees or tolls as part of their operations. There has been very limited use
of public/private partnerships in California where private sector capital is invested in public works
projects in anticipation of a return on investment. Other states and nations are beginning to partner with
private investment firms to construct public works projects that otherwise would not have sufficient
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AGC Government Affairs & Legislative Report 2006
public monies to make the projects viable. Candidates for the limited number of projects authorized by
AB 521 and AB 1467 include truck toll lanes, which provide ingress and egress from California ports,
and carpool toll lanes.
Infrastructure Projects
AB 1039 (Nunez) – Exempts certain highway, levee, and bridge projects from having to be approved
through the California Environmental Quality Act. This legislation is a companion to the infrastructure
bond acts that were approved on the November ballot and will streamline the environmental review that
must be done on each project.
SB 463 (Ducheny) – Restructures the franchise agreement for the State Route 125 toll road project. SB
463 extends the franchise agreement for State Route 125 for an additional 10 years so that the toll road
project will “pencil out” due to project cost impacts. Without SB 463, the project and AGC contractors
working on it, may have been ordered to stop work.
SB 1282 (Ducheny) – Establishes guidelines for a California-Mexico border infrastructure program.
Specifically, SB 1282, exempts federal transportation funds targeted for border infrastructure programs
from being counted toward San Diego County’s transportation budget allocation, thereby protecting other
transportation funds designated for San Diego projects.
SB 1838 (Perata) – Provides for timely review of hospital plans and specifications to expedite
construction approvals. AGC supported SB 1838 to provide tools to expedite State review of hospital
construction projects before the projects can be put out to bid. Currently the Office of Statewide Health
Planning and Development (OSHPD) is understaffed and cannot provide timely review of hospital plans
prior to bidding for construction contracts. SB 1838 exempts certain types of projects from OSHPD
review in order to expedite construction.
Public Bidding Process
AB 1986 (De La Torre) – Prohibits the California State University from using a foundation or auxiliary
organization to circumvent the public bidding process.
AB 2372 (Pavely) – Penalizes any public agency who violates the California Uniform Construction Cost
Accounting Act in order to raise their force account limits.
These two bills were supported by AGC and sponsored by the
Construction Industry Force Account Council (CIFAC) to curtail
certain public agencies from attempting to circumvent the
competitive bidding process or to violate the Uniform Construction
Cost Accounting Act.
John Hakel, with Senator Dick Ackerman, Assemblyman
Van Tran, Supervisor Chris Norby, Senator-elect Lou Correa,
and Newly-elected Supervisor John Moorlach.
AB 2362 (Horton) – Limits job order contracting to be used by the
LA Unified School District. As introduced, AB 2362 would have
expanded job order contracting authority from use by the Los
Angeles Unified School District to allow any school district in
California to use the process. AGC worked with the Los Angeles
Unified School District to develop guidelines for using job order
AGC Government Affairs & Legislative Report 2006
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contracting and was opposed to expanding authority at this time to all school districts statewide. AB
2362 was amended by the author to limit application only to the Los Angeles district.
Career and Vocational Education
One of the main objectives of the AGC’s Career and Vocational Education community is to have high
school vocational classes able to be transferable and recognized by all colleges. SB 825 (Maldonado),
strongly supported by AGC, would have helped to establish such standards; unfortunately, this measure
was stalled in the Assembly. Instead, the Career & Vocational Education groups supported SB 1543
(Alarcon) which requires colleges to accept vocational education classes at high schools as electives.
AB 368 (Evans) was also signed into law and will require the Department of Education to develop and
maintain a registry of career technical education equipment that is listed for sale and to allow other
school access to purchase such equipment. Without this registry, necessary and valuable training
equipment would continue to be disposed of or lost.
Contractor’s License Law
The Contractor’s State License Board (CSLB) sponsored a number of bills to protect the consumer
community. One such measure was AB 2897 (Daucher) which was supported by AGC and signed into
law. This measure will increase the penalties on a contractor whose construction license was revoked
from working in an ownership or supervisorial position in any other construction company.
Earlier this year, the AGC raised concerns to the CSLB about the time it took to get a license because of
the new fingerprint check requirement. The CSLB has been meeting with the Attorney General’s office
and has instituted measures to improve their current processing time.
AGC Successfully Requests Governor’s Vetoes
Opposing legislation that is viewed as having a negative
impact on the construction industry is always an important part
of AGC’s legislative program. 2006 was no different, as
Governor Schwarzenegger vetoed 10 bills that were opposed
by AGC during the legislative session. AGC made formal veto
requests on each of the bills that are mentioned in the section
below.
Employer-Employee Relations
AB 1884 (Chu) – Would have given striking workers
unemployment benefits. This bill is not a new issue, and
periodically shows up in the Legislature. It is contrary to the
fundamental role of unemployment insurance which is to be
unemployment through “no fault of your own,” with a strike
being a voluntary action.
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Lisa Miller with Shellmaker and Wayne Lindholm from Hensel
Phelps.
AGC Government Affairs & Legislative Report 2006
AB 2555 (Oropeza) – Would have increased penalties on employers for “gender pay inequity claims,”
and was virtually identical to her previous bill which was vetoed. AGC joined with the California
Chamber of Commerce Employer Coalition in opposition to this bill which was vetoed again by the
Governor.
SB 832 (Perata) – Would have created a Public Benefit Trust Fund for punitive damages. AGC opposed
this bill along with the California Chamber of Commerce and others on the basis that creating such a
fund is a disincentive to providing future punitive damage reforms which still need to take place.
Meal and Rest Periods
AB 2593 (Keene) – Would have provided flexibility for the timing of meal periods only for the
unionized transportation industry employers, in essence, United Parcel Services (UPS) who sponsored
the bill. A coalition of employers including AGC expressed concern that this type of statutory
clarification would be beneficial to all industries and this measure would set a damaging precedent.
Although AB 2593 received support from the Legislature, the Governor vetoed this bill based on our
concerns. AGC and other industries will be working with the administration to reach some type of
legislative solution for next year. This issue is further complicated for construction since the Beardon vs.
Borax case decided earlier this year to invalidate the collective bargaining agreement exemption
contained in Wage Order 16.
General Construction
AB 1020 (Hancock) – Would have subjected all transportation projects to a review as to whether they
are “growth inducing” before they can be approved. AB 1020 was sponsored by several environmental
organizations in an attempt to require transportation projects, including those authorized and funded by
the infrastructure bonds, to be reviewed as to their “growth inducing” impact before they could be
funded. AGC strongly requested a veto on this bill which was viewed as a tool to stop construction of
projects that certain interest groups may not support.
AB 2992 (Evans) – Would have mandated the California State University to pre-qualify all mechanical
contractors and required a prime to use subcontractors from this list. AGC strongly opposed AB 2992
throughout the legislative process and worked closely with the California State University to secure a
veto on this poorly crafted piece of legislation. If AB 2992 had been enacted, it would have been nearly
impossible to easily bid a CSU project while having to select subcontractors from a limited prequalification list mandated by the University.
SB 1523 (Alarcon) – Would have made it more difficult to construct “big-box” stores by requiring a
local economic impact report on every project. AGC joined with business property and development
groups to request a veto on this legislation which was targeted at throwing a “roadblock” in the way of
approval for construction of “big box” stores such as Home Depot, Ikea, and others.
Attorney General Fees
SB 1489 (Ducheny) – Would have broadened the Attorney General’s rights to recover attorney’s fees and
litigation costs in civil actions. This was a hard fought battle with the Attorney General’s office. The bill
failed in the Assembly, only to be resurrected in another version. AGC, along with many others in the
AGC Government Affairs & Legislative Report 2006
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The Ninth Annual AGC Legislative Day
was again a very successful event for those
who attended starting with the reception
the night before for Senate President Pro
Tem Don Perata (D-Oakland). The
Senator spoke about the negotiations which
lead to the successful passage of the
Infrastructure Bond measures, and he
thanked AGC and others for their help.
Ninth Annual
Legislative Day
Proves
Successful
The first item on the Legislative Day
program was a “Town Hall” style
discussion between the Assembly
Minority Leader, George Plescia (R-San
Diego) and Assembly member John
Laird, Chair, Assembly Budget
Committee (D-Santa Cruz). Both agreed
that it is rare but very productive when
Republicans and Democrats are able to
reach some common ground and work
together as they did on the Infrastructure
bonds. Both Assembly members played
critical roles in getting their Republican
and Democratic colleagues to agree on the
November bond package.
Dan Dunmoyer, Deputy Chief of Staff to
Governor Schwarzenegger, provided the
AGC members with some insight as to the
Governor’s vision and the Governor’s
support of the infrastructure bonds. As
always, officials from the Labor Agency
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AGC Government Affairs & Legislative Report 2006
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draw a lot of audience participation, and this
year was no different with questions about
prevailing wage and labor compliance
programs being asked of the Acting Labor
Commissioner, Bob Jones.
1)
2)
3)
4)
The AGC members were all very entertained
by the Luncheon Speaker, Greg Lucas
from the San Francisco Chronicle who
started his talk with the Chronicle motto—
“If it’s news, its news to us”. As AGC
members left for their legislative meetings at
the Capitol after lunch, they all had smiles
on their faces as they tried in vain to
remember a line from Greg’s speech.
There were three issues for AGC members
to promote: 1) Support for the
Infrastructure Bonds on the November
ballot, 2) Support for AB 143 (Nunez) the
Design-Build bill, and 3) Support for Career
Technical Education legislation and funding.
The feedback from those who met with their
legislators was very helpful in identifying
areas that require legislative advocate follow
up.
Capping off the day was the stop at
Gallagher’s Bar and Grill which gave
everyone an opportunity to wind down and
share their legislative stories and
experiences.
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Senator Don Perata (D-Oakland) with Jamie Khan and Dave Ackerman, AGC
Advocates, at the Esquire Grill reception.
Assemblymember John Laird (D-Santa Cruz), Chair, Assembly Budget Committee,
starts off the “town hall” discussion.
Assembly Minority Leader George Plescia (R-San Diego) with Stephen Matich - Matich
Corp.
Tom Holsman, CEO of AGC, with Dan Dunmoyer, Deputy Chief of Staff to Governor
Schwarzeneggar, John Daley, Jr.- Daley Corporation and Steve Blois - Blois
Construction.
AGC President Mark Lindquist - M.A.Lindquist Company, Inc. with Acting Labor
Commissioner Bob Jones.
AGC Luncheon Speaker, Greg Lucas, political reporter for the San Francisco Chronicle.
Ken Coate - Inland Surety Bonds and Insurance Services, meets with Kurt Schuparra,
Consultant to Assemblymember Canciamilla, along with AGC Legislative Chairman
Chuck Fletcher - MCE Corp., Brian Stopper - R&L Brosamer and John Pray - Gordon &
Rees.
Tom Henle - Jones, Henle & Schnuck, Wayne Lindholm - Hensel Phelps Construction
Co., Assemblymember Lyn Daucher (R-Brea), Dan McGrew - Griffith Company,
Michelle Loveall - First Regional Bank, and John Hakel, AGC.
Donn Sawyer - W.M. Lyles Co., Mrs. Sawyer, Gary Rohman - Ecco Equipment
Corporation, Kim Agee-Olivias - Agee Construction Corporation, Marshall Agee - Agee
Construction Corporation, Assemblymember Mike Villines (R-Clovis), and Matt Teixeira
- W.M. Lyles Co.
Dave Jenkins - AGC, Terri Jackson - Jardine Lloyd Thompson, LLC, Tim Truax - Cox
Castle, David Colon - NK David Corporation, Charles Gale - Metropolitan Water District,
and Assemblymember Betty Karnette (D-Long Beach).
Bob Roginson - Atkinson, Andelson, Lota, Ruud & Romo, Tom Brickley Brickley
Environmental, Lee Haven - Granite Construction, Assemblymember Russ Bough (RBeaumont), Ken Coate - Inland Surety Bonds and Insurance Services, and John
Douglas - Granite Construction Company.
Ed Wylie - C.E. Wylie Construction Co., Jeff Scheidel - Scheidel Contracting &
Engineering, Inc., John Daley Jr. - Daley Corporation, and Christina Gomez-Holben - St.
Thomas Enterprises meet with Assemblymember Lori Saldana (D-San Diego).
Assemblymember Roger Niello (R-Fair Oaks) meets with David Ruff - McDonough
Holland & Allen, Jeff Reed - Valley Slurry Seal Company, Rich Piombo - Ford
Construction Co., Inc., Bob Hall - J.R. Roberts Corporation, and Bill Keegan - AGC.
Frank Schipper - Frank Schipper Construction Co., Steve Bois - Boise Construction,
Randy Douglas - Tierra Construction, and Jamie Khan finish off their day by relaxing at
Gallaghers.
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AGC Government Affairs &
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business community, felt that the provisions contained in SB 1489 were too broad and thus created
incentives for the Attorney General’s office to litigate.
AGC Successfully Opposes Legislation
Many of the bills opposed by AGC during the legislative process are “killed.” These bills are either
dropped by the author in the face of opposition; amended to address the problems we outline and our
opposition is removed; or the bill is defeated in a legislative committee or in a full vote by either house
of the Legislature. The following legislation was opposed by AGC and was “killed” during the
legislative process.
Employer-Employee Relations
AB 2371 (Levine) - Would have invalidated arbitration agreements between employers and employees
for employment practices covered by the Fair Employment and Housing Act (FEHA). AGC joined the
California Chamber of Commerce in arguing that the bill unnecessarily restricted the flexibility of using
arbitration as an alternative to addressing employment issues through more expensive court proceedings.
The bill was stopped on the Assembly floor by a very narrow margin.
General Construction
AB 2621 (Strickland) – Would have eliminated the sales tax on gasoline and undermined Proposition
42. AGC testified against this proposal that would have eliminated the funding source for Proposition 42
projects, eliminating nearly $1.4 billion of transportation funding annually. The bill was killed in its first
committee hearing in the Assembly.
SB 764 (Lowenthal) – Would have shut down construction at the Los Angeles and Long Beach ports
unless the ports were able to show a net reduction in emissions - regardless of expansion. AGC
contractors perform a majority of the construction work at the ports of Los Angeles and Long Beach and
SB 764 would have placed all of those contracts in jeopardy. AGC and others convinced Senator
Lowenthal to drop SB 764, but the Senator will be continuing to work on issues dealing with air
pollution at the two ports.
SB 1161 (Alarcon) – Would have given unlimited authority for design-sequencing construction and
established specific pre-qualification requirements for bidding contractors. This legislation was
sponsored by the Professional Engineers in California Government (PECG) as an alternative to designbuild, which they opposed. AGC opposed the legislation and the author decided not to pursue the bill
during the final month of the legislative session.
SB 1456 (Lowenthal) – Would have allowed school districts to bid construction projects on a “best
value” determination on a process determined by the school district. AGC joined forces with the
Laborers Union to express opposition to this legislation that would have allowed all school districts to
circumvent the lowest responsible bidder process in awarding school construction projects. Senator
Lowenthal quickly decided to drop the proposed legislation.
AB 411 (Yee) – Would have made it more difficult for prime contractors to withhold retention. AGC
opposed several versions of this bill, sponsored by subcontractor organizations, which would have made
it more difficult for a prime contractor to hold retention amounts in public works contracts when the
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AGC Government Affairs & Legislative Report 2006
quality of work was in dispute. In consideration of our opposition, the author decided not to pursue the
legislation.
AB 2833 (Runner) - Would have increased the force account limits and allowed school districts to selfperform any construction work of up to $50,000. AGC joined with the Force Account Council (CIFAC)
to defeat this legislation and convince the author to drop the bill prior to the first committee hearing.
Worksite Safety
SB 46 (Alarcon) - Was amended to respond to the Bricklayers concern over silica dust caused by dry
cutting of masonry material. The bill directed the Cal OSHA Standards Board to adopt the conditions in
the bill which would effectively prevent any dry cutting to occur. AGC was strongly opposed to this
measure and worked with the author on an agreement to allow the Cal OSHA Standards Board to
convene an Advisory Committee on this issue and develop an appropriate regulation with industry and
employee input. Senator Alarcon agreed and he dropped the bill on the last day of session. AGC
continues to work with the Cal OSHA Board on this regulation.
SB 655 (Ortiz) - Attempted to create a new task force which
would develop project control mitigation measures to combat
the effects of naturally occurring asbestos. These measures
would be applicable to homebuilding, farming, and road
building. AGC joined with other industry groups to oppose this
measure which was stopped on the Assembly floor.
Other Priority Legislation
Legislation sponsored by AGC that would require preliminary
notice requirements by subcontractors prior to filing payment
bond claims did not pass and will be considered in 2007,
following additional meetings with all subcontractor groups.
The Governor signed two bills that were opposed by AGC:
Tim Roberts from Monterey Mechanical and Tim Belcher from
Underwater Resources work the phones in support of
Propositions 1A and 1B.
SB 667 (Migden) - Allows the University of California San
Francisco campus to conduct a demonstration program for the
next five years to award construction contracts based on a “best
value” determination that considers contractor qualifications rather than just the low bid. AGC was
concerned that SB 667 would establish a precedent that would be sought by many other public agencies
in an effort to circumvent the low bidder contract award process and lead to favoritism in public contract
awards.
AGC contractors will now be working with the University of California as the process provided for in
SB 667 is implemented on a pilot project basis.
AB 32 (Nunez) - Establishes reporting and reduction targets for greenhouse gas emissions. This bill was
opposed by virtually every business group in California, including AGC. The program will be
administered by the State Air Resources Board and it is unclear how the new law will impact
construction equipment.
AGC Government Affairs & Legislative Report 2006
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An Active “Grassroots” Program
The AGC of California started their grassroots program in the Orange County District with an event held
at The Clubhouse in April. The Orange County AGC members are great supporters of these activities and
over 75 members of the district were there. This event also attracts a substantial amount of state
representatives and local officials. Those who attended included, Senate Minority Leader, Senator Dick
Ackerman, Assemblywoman Mimi Walters, newly-elected Assemblymember Jose Solario, newlyelected Senator Lou Correa, Supervisor Chris Norby and newly-elected Supervisor John Moorlach.
These grassroots luncheon events provide AGC members with an opportunity to informally discuss a
variety of topics with their legislative and local representatives. After the lunch, John Hakel led a very
lively question and answer session dealing with bond funding and other construction related issues.
On June 13th, the AGC hosted a reception in honor of Senator Don Perata as the Outstanding Legislator
of the Year. This event was attended by AGC members from around the state as well as members from
the Delta-Sierra District. Senator Perata spoke about the bi-partisan support which led to their $37
Billion Infrastructure Bond package being placed on the
November ballot.
The final activity of the year was held in Walnut Creek where
members of the East Bay District had an opportunity to listen
to Assemblymember Guy Houston who provided them with
an update of the legislative activities of interest to the
construction industry.
Busy Year for AGC PACs
The 2006 election year was very busy for the AGC Candidate
PAC since all statewide officers were up for election as well
as the entire Assembly and half of the Senate. Of the 80
Assembly seats, AGC was involved in at least 40 races. AGC
also supported 14 candidates out of the 20 Senate races.
Locally, AGC supported 5 candidates from various districts.
AGC was very supportive and actively campaigned for the
Governor both through the PAC as well as through individual
AGC member contributions.
Senator Dick Ackerman, Jamie Khan, AGC Advocate and Tom
Henle from Jones, Henle & Schunck.
Participation in the various campaign fundraising activities puts a heavy burden on the AGC PAC.
Therefore, this year, the PAC board decided to raffle a Ford Hybrid Escape in order to raise money for
the PAC. Dave McCosker rose to the occasion and singled handedly contacted people both north and
south to reach the goal of over $90,000. In fact, the total funds brought in from the raffle amounted to
$97,800. At a time when everyone was trying to raise money for various campaigns, the McCosker
fundraising expertise again exceeded all expectations.
The AGC Issues PAC was also very involved this year in supporting Propositions 1B - 1E, as well as
Proposition 1A which guaranteed that all transportation gas tax monies would be earmarked for road
construction. The AGC Issues PAC raised and contributed over $350,000. There were also a number of
individual companies who contributed directly to these campaigns which were all successful. AGC
members should all be very proud of their successes in 2006.
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AGC Government Affairs & Legislative Report 2006
Associated General Contractors
2006 Enacted Legislation
You may obtain copies of any of these bills online at www.leginfo.ca.gov
AB 32 (Nunez) Chapter 488 Air Pollution:
Greenhouse Gasses
This bill requires CARB to adopt regulations to
require the reporting and verification of statewide
greenhouse gas emissions and to monitor and
enforce compliance. By 2020, CARB is required to
adopt emission limits equivalent to the statewide
greenhouse gas levels in 1990.
AB 368 (Evans) Chapter 408 Technical
Education: equipment: sales
This bill requires the State Department of
Education to develop and maintain a registry of
career technical education equipment that is listed
for sale and will be accessible to school districts
via the Internet. The bill also requires the
equipment listed in the registry to be offered for
sale to other school districts.
AB 372 (Nation) Chapter 262 Transit designbuild contracts
This bill extends the authorization for transit
districts to use design-build authority until
January 1, 2011. It requires a transit operator to
select the design-build entity, for non-rail transit
projects that exceed $2.5 million, based on either
the lowest responsible bidder or best value and
would authorize the design-build method of
procurement for a capital maintenance or
capacity-enhancing rail project with projects
costs of $25 million or more.
AB 463 (Tran) Chapter 263 Subsurface
installations: excavation.
This bill allows a contractor to use vacuum
excavation devices, power-operated or powerdriven, and excavating or boring equipment if it is
mutually agreeable to the operator(s) of the
subsurface installation and the excavator.
AGC Government Affairs & Legislative Report 2006
AB 521 (Runner, Sharon) Chapter 542
Transportation facilities: public-private
partnerships
This bill provides that the Legislature has 60
legislative days to act after submittal of a
negotiated lease agreement for a public-private
partnership project. Unless both houses reject the
agreement, the agreement will be deemed
approved.
AB 573 (Wolk) Chapter 455 Design
professionals: indemnity
This bill essentially eliminates Type I indemnity
agreements between public entities and design
professionals.
AB 713 (Torrico) Chapter 44 Safe, Reliable
High-Speed Passenger Train Bond Act for the
21st Century
This bill moved the $9.8 billion bond measure to
provide funding for high-speed rail from the
November 2006 ballot to the 2008 November
General Election.
AB 881 (Emmerson) Chapter 38 Worker’s
compensation: roofers
This bill requires until January 1, 2011, that, as of
January 1, 2007, the registrar of contractors
remove the C-39 roofing classification from a
license if the contractor fails to comply with the
above requirement.
AB 1039 (Nunez) Chapter 31 Government:
environment: bonds: transportation
This bill is a companion statute passed as part of
the infrastructure bond package that exempts
specified levee and highway and bridge seismic
retrofit projects from review under the California
Environmental Quality Act.
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AB 1467 (Nunez) Chapter 32 Transportation
projects: facilities: public-private partnerships
AB 2372 (Pavley) Chapter 192 Public Projects:
sanction for noncompliance
This bill was enacted as part of the infrastructure
package and will allow Caltrans and local agencies
to enter into public-private partnership agreements
allowing private capital to be invested in
transportation projects.
This bill establishes penalties for any public
agency that violates the provisions of the Uniform
Construction Cost Accounting Act. Any agency
found in violation, would be prohibited from using
the Cost Accounting Act bidding procedures for a
period of 5 years
AB 1986 (De La Torre) Chapter 346 Public
contracts: California State University: auxiliary
organizations
AB 2419 (Wyland) Chapter 778 School
facilities: new construction and modernization:
career technical education facilities
This bill prevents the California State University from
circumventing the Public Contract Code by using a
private foundation to bid public work on any campus.
This bill requires the career technical education
advisory committee of a school district, in
conjunction with an application of the district for
funding of any construction or modernization
project, to provide written confirmation that the
need for vocational and career technical facilities
is being adequately met within the district.
AB 2068 (Nava) Chapter 819 Worker’s
Compensation: designation of physician
This bill will delete the April 30, 2007, repeal date
and the limit on the maximum percentage of
employees that may designate a personal physician.
AB 2456 (Nakanishi) Chapter 122 Contractors:
licenses
AB 2160 (Lieu) Chapter 742 State buildings: green
building
This bill requires the Department of General Services
to define a life cycle cost analysis model to be used
with respect to certain state building design and
construction decisions. It will require the State Energy
Commission to consult with various state entities to
identify and develop appropriate financing and
project delivery mechanisms to facilitate state
building energy and resource efficient projects.
AB 2330 (Arambula) Chapter 232 Small
businesses: Office of Small Business Advocate
This bill requires the Office of Small Business
Advocate to commission a study of the costs of state
regulations on small businesses that would examine
successful models from other states on identifying
regulatory costs and developing potential alternative
approaches.
AB 2362 (Horton, Jerome) Chapter 570 Public
contracts: job order contracting: school districts
This bill extends the authorization for the Los Angeles
Unified School District to use job order contracting
authority until December 1, 2012.
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This bill prohibits a qualifying person and
personnel of record of a licensee whose license
has been suspended for this purpose from serving
in any capacity that is subject to licensure under
the Contractors’ State License Law other than a
nonsupervising bona fide employee, until the
covered debts are satisfied.
AB 2520 (Committee on Transportation)
Chapter 574 Transportation
This bill authorizes the Santa Clara Valley
Transportation Authority to purchase tunnel
boring machines by competitive negotiation. Any
work performed by the machines would be let by
competitive bid under the Public Contract Code.
AB 2641 (Coto) Chapter 863 Native American
human remains
This bill requires that the identified descendents
make recommendations or preferences for
treatment within 48 hours of being granted access
to the site. Upon discovery of human remains, the
bill also requires the landowner to ensure that the
AGC Government Affairs & Legislative Report 2006
immediate vicinity is not damaged or disturbed until
specific conditions are met
SB 667 (Migden) Chapter 367 Public contracts:
competitive bidding: University of California
AB 2861 (Ridley-Thomas) Chapter 477 Lead
Abatement
This bill allows the University of California to use
a “best value” alternative contract award process
rather than using the procedures in the Public
Contract Act. This authority will only be allowed
to be used at the University of California San
Francisco campus.
A violation of a regulation deemed prohibited by a
local hazardous waste enforcement agency is subject
to a fine of no more than $1,000. This bill makes a
2nd or subsequent violation a misdemeanor
punishable by a fine not to exceed $5,000,
imprisonment for no more than 6 months in the
county jail, or both a fine and imprisonment.
AB 2897 (Daucher) Chapter 171 Contractors:
revoked licenses
This bill increases the penalty for individuals whose
contractors’ license has been revoked by the
Contractors State License Board (CSLB) but who
subsequently become associated with a licensee of
another construction company. A revoked licensee is
allowed to work in the construction industry but only
as a bona fide non-supervisory employee and not in
an ownership or management capacity.
SB 369 (Simitian) Chapter 300 Solid Waste: tire
recycling: rubberized asphalt concrete
This bill revises the eligibility qualifications for
public works grants that use rubberized asphalt. It
requires that the project use at least 1,250 tons of
rubberized asphalt concrete. The bill also requires
the California Integrated Waste Management Board
to annually calculate the amount of a grant, based on
the amount of rubberized asphalt concrete used on a
project, and would increase the maximum amount of
grant money that can be awarded to $250,000.
SB 463 (Ducheny) Chapter 446 Toll roads: State
Highway Route 125
This bill restructures and extends the franchise
agreement governing the State Route 125 toll road.
SB 535 (Runner) Chapter 244 Design-build
contracts: City of Victorville
This bill adds the City of Victorville to the list of cities
that are allowed to use the design-build method of
public works procurement.
AGC Government Affairs & Legislative Report 2006
SB 1359 (Torlakson) Chapter 651 Undergroud
excavations
This bill, strongly supported by AGC, requires the
owner of underground utilities to meet with the
excavation contractor prior to the commencement
of work when the excavation will occur within 10
feet of a high voltage cable or hazardous fuel line.
SB 1543 (Alarcon) Chapter 669 High school
curriculum: high school coursework
requirements
This bill allows standards-aligned and
academically rigorous coursework in career and
technical education (CTE) to be used by high
school students as a “general elective” credit for
admissions to California’s publicly funded
university systems.
B 1605 (Margett) Chapter 183 Public
contracts: public works
This bill specifies that a contractor notify the
local public entity in writing of any subsurface or
latent physical conditions that differ from the
conditions indicated by information about the site
made available to bidders prior to the deadline
for submitting bids.
SB 1659 (Cox) Chapter 678 Hospital seismic
retrofit
This bill authorizes the Office of Statewide Health
Planning to permit electronic submission of plans.
SB 1661 (Cox) Chapter 679 Health facilities:
seismic safety: contruction
This bill authorizes the Office of Statewide Health
Planning to grant an additional extension of up to
2 years, of the January 1, 2013, deadline to meet
seismic safety retrofit requirements.
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SB 1690 (Romero) Chapter 519
Unemployment insurance
SB 1838 (Perata) Chapter 693 Health facilities:
construction plans
This bill authorizes the Employment Training
Panel to allocate funds for training in job related
vocational skills to increase the productivity and
extend retention of training workers in seasonal
industries.
This bill expedites the approval of hospital
construction plans by the Office of Statewide Health
Planning.
This report is intended to provide general information regarding current legislative matters
and not legal advice. The summaries are provided without assurance that they describe all facets
of each enacted bill. There may be other enacted bills which impact your business
or there may be sections of these bills not specifically referenced in the summary.
Members are encouraged to request copies of bills of interests
from DGA Associates.
Dave Ackerman
Jamie Khan
Paul Gladfelty
AGC Legislative Office
DGA Associates 980 Ninth Street, Suite 1580 Sacramento, CA 95814
(916) 444-9601 / Fax (916) 444-7841
E-mail: [email protected]
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AGC Government Affairs & Legislative Report 2006
AGC GOVERNMENT AFFAIRS & LEGISLATIVE REPORT 2006
ASSOCIATED GENERAL CONTRACTORS OF CALIFORNIA, INC.