SBCA Weekly Newsletter 01/16/13

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WEEKLY NEWSLETTER January 16, 2013 Volume 19 Issue 03 Santa Barbara Contractors Association Celebrating 65 Years of Service to the Community In This Issue CSLB Catches Dozen Unlicensed Operators in Camarillo Undercover Sting Page 1 SBCA Builder Breakfast Page 3 Q & A for Contractors Page 12 Prompt Payment Penalties Overview Page 17 Safety Expo Page 20 Tailgate Safety Topic Page 24 SBCA Online Planroom Report Page 28 SB City Building Permits Page 33 South County Building Permits Page 34 North County Building Permits Page 47 We protect the people who build California. Will my supplies be here on time? Am I going to get this bid? We understand those on the job in California have more on their mind than workers’ compensation insurance. So let us put your mind at ease: you can count on the strength and stability of State Fund. We’ve never pulled out of the market due to an economic downturn, and we never will. Visit statefundca.com today to learn about the 6% discount on premiums we offer eligible SBCA members. Your individual business may be eligible for even more discounts. Thanks for reading…we’ll let you get back to work. Together, we’ll help keep California working. www.statefundca.com Ask for SBCA Group #821 CSLB Catches Dozen Unlicensed Operators in Camarillo Undercover Sting All must appear in Superior Court to face illegal contracting, advertising charges jail and/or up to $5,000 in fines. A second con- viction results in 90 days to one year in county jail, plus as much as $5,000 in fines. A third conviction also has a mandatory 90-day jail sentence and fines of up to $10,000. A large amount of cash was discovered on several of those arrested, which is not un- common for those who operate in the un- derground economy where paying workers under the table is their illegal way of keeping wages lower, and avoiding required taxes and insurance. Eleven also face an additional misdemeanor charge of illegal advertising (Business and Professions Code section 7027.1). State law requires that contractors include their license number in all print, broadcast, and online advertisements. Those without a license can advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor. “Many consumers don’t realize the risk they take when hiring someone who isn’t prop- erly licensed to work, whether the project is for their home or a commercial property,” said CSLB Registrar Steve Sands. “They think they’re saving money, but many end up pay- ing more in the long run.” SACRAMENTO — In its ongoing battle against the underground economy, the Contractors State License Board (CSLB), along with the Ventura County District Attorney’s Office and Camarillo Police Department, conducted an undercover sting at a commercial property in Camarillo on November 28 and 29, 2012, where 12 individuals were arrested and given notices to appear (NTAs) in Superior Court. During the operation, CSLB investigators posed as property owners who were seeking painting, floor covering, and concrete im- provements, as well as tree removal services. Suspect leads were gathered from advertise- ments in local newspapers and pamphlets, business cards and fliers, and online bulletin board sites, such as craigslist. Individuals who bid more than $500 for the work were arrest- ed and ordered to appear in Ventura County Superior Court on January 14 and 15, 2013, to face misdemeanor charges. Eleven of the 12 were charged with contract- ing without a license (Business and Profes- sions Code section 7028). In California, all home improvement jobs totaling $500 or more in combined labor and material costs must be performed by CSLB-licensed contrac- tors. First-conviction penalties for contracting without a license include up to six months in One individual was issued a Stop Order for not having the proper workers’ compensation in- surance for his employee. Job site activity is halted when CSLB investigators issue a Stop Order to a contractor – licensed or unlicensed – who does not have workers’ compensation insurance coverage for employees. Failure to comply with a Stop Order can result in misde- meanor charges and penalties, including 60 days in jail and/or up to $10,000 in fines. If someone is hurt while working on the own- ers’ property, the owner may be liable. “Don’t take a contractor’s word that they have proper coverage,” Sands said. “Check with the bidder’s workers’ compensation insurance company to make sure the policy is still valid and covers all the workers.”

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SBCA Weekly Newsletter 01/16/13

Transcript of SBCA Weekly Newsletter 01/16/13

WEEKLY NEWSLETTER January 16, 2013 Volume 19 Issue 03

Santa Barbara Contractors Association Celebrating 65 Years of Service to the Community

In This IssueCSLB Catches Dozen UnlicensedOperators in Camarillo Undercover Sting Page 1SBCA Builder Breakfast Page 3Q & A for Contractors Page 12Prompt Payment Penalties Overview Page 17Safety Expo Page 20Tailgate Safety Topic Page 24SBCA Online Planroom Report Page 28SB City Building Permits Page 33South County Building Permits Page 34North County Building Permits Page 47

We protect the people who build California.

Will my supplies be here on time? Am I going to get this bid? We understand those on the job in California have more on their mind than workers’ compensation insurance. So let us put your mind

at ease: you can count on the strength and stability of State Fund. We’ve never pulled out of the market due to an economic downturn, and we never will. Visit statefundca.com today to learn about

the 6% discount on premiums we offer eligible SBCA members. Your individual business may be

eligible for even more discounts. Thanks for reading…we’ll let you get back to work.

Together, we’ll help keep California working.www.statefundca.comAsk for SBCA Group #821

CSLB Catches Dozen Unlicensed Operators in Camarillo Undercover StingAll must appear in Superior Court to face illegal

contracting, advertising chargesjail and/or up to $5,000 in fines. A second con-viction results in 90 days to one year in county jail, plus as much as $5,000 in fines. A third conviction also has a mandatory 90-day jail sentence and fines of up to $10,000.

A large amount of cash was discovered on several of those arrested, which is not un-common for those who operate in the un-derground economy where paying workers under the table is their illegal way of keeping wages lower, and avoiding required taxes and insurance.

Eleven also face an additional misdemeanor charge of illegal advertising (Business and Professions Code section 7027.1). State law requires that contractors include their license number in all print, broadcast, and online advertisements. Those without a license can advertise to perform jobs valued at less than $500, but the ad must state that they are not a licensed contractor.

“Many consumers don’t realize the risk they take when hiring someone who isn’t prop-erly licensed to work, whether the project is for their home or a commercial property,” said CSLB Registrar Steve Sands. “They think they’re saving money, but many end up pay-ing more in the long run.”

SACRAMENTO — In its ongoing battle against the underground economy, the Contractors State License Board (CSLB), along with the Ventura County District Attorney’s Office and Camarillo Police Department, conducted an undercover sting at a commercial property in Camarillo on November 28 and 29, 2012, where 12 individuals were arrested and given notices to appear (NTAs) in Superior Court.

During the operation, CSLB investigators posed as property owners who were seeking painting, floor covering, and concrete im-provements, as well as tree removal services. Suspect leads were gathered from advertise-ments in local newspapers and pamphlets, business cards and fliers, and online bulletin board sites, such as craigslist. Individuals who bid more than $500 for the work were arrest-ed and ordered to appear in Ventura County Superior Court on January 14 and 15, 2013, to face misdemeanor charges.

Eleven of the 12 were charged with contract-ing without a license (Business and Profes-sions Code section 7028). In California, all home improvement jobs totaling $500 or more in combined labor and material costs must be performed by CSLB-licensed contrac-tors. First-conviction penalties for contracting without a license include up to six months in

One individual was issued a Stop Order for not having the proper workers’ compensation in-surance for his employee. Job site activity is halted when CSLB investigators issue a Stop Order to a contractor – licensed or unlicensed – who does not have workers’ compensation insurance coverage for employees. Failure to comply with a Stop Order can result in misde-meanor charges and penalties, including 60 days in jail and/or up to $10,000 in fines.

If someone is hurt while working on the own-ers’ property, the owner may be liable. “Don’t take a contractor’s word that they have proper coverage,” Sands said. “Check with the bidder’s workers’ compensation insurance company to make sure the policy is still valid and covers all the workers.”

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

JANUARY 2013Built Green OrientationJanuary 3, 2013 from 9:00am to 10:00amLocation: Built Green Resource Center,914 A Santa Barbara Street

SBCA Board of Directors MeetingJanuary 8, 2013 from 5:00pm to 7:00pmLocation: SBCA, 914 A Santa Barbara Street

SBCA Lunch & Learn with Magid MasonryJanuary 16, 2013 from 12:00pm to 1:30pmLocation: SBCA, 914 A Santa Barbara Street

Employee or Independent Contractor Tax SeminarPresented by EDDJanuary 18, 2013 from 9:00am to 12:00pmLocation: EDD, 4820 McGrath St, #200, Ventura

Federal/State Basic Payroll Tax SeminarPresented by EDDJanuary 25, 2013 from 9:00am to 3:00pmLocation: EDD, 4820 McGrath St, #200, Ventura

SBCA Builder BreakfastJanuary 30, 2013 from 8:30am to 9:30amLocation: SBCA, 914 A Santa Barbara Street

Santa Barbara Contractors Association Calendar Highlights

FEBRUARY 2013SBCA Board of Directors MeetingFebruary 5, 2013 from 5:00pm to 7:00pmLocation: SBCA, 914 A Santa Barbara Street

SBCA Online Planroom Demo & TrainingFebruary 6, 2013 from 10:00am to 11:00amLocation: SBCA, 914 A Santa Barbara Street

Built Green OrientationFebruary 7, 2013 from 9:00am to 10:00amLocation: Built Green Resource Center,914 A Santa Barbara Street

State Payroll Tax WorkshopPresented by EDDFebruary 8, 2013 from 9:00am to 1:00pm Location: EDD, 4820 McGrath St, #200, Ventura

1st Aid CPR Training & CertificationInstructor, Justin Haagen, Safety MattersFebruary 19, 2013 from 8:00am to 2:00pmLocation: SBCA, 914 A Santa Barbara Street

State Labor Law & Payroll tax SeminarPresented by EDDFebruary 19, 2013 from 9:00am to 3:00pm Location: EDD, 4820 McGrath St, #200, Ventura

Prevailing Wage SeminarPresented by Monte TenEyck, Naomi Dewey, Rick HeldweinFebruary 26, 2013 from 9:00am to 12:00pmLocation: SBCA, 914 A Santa Barbara Street

SBCA Builder BreakfastFebruary 27, 2013 from 8:30am to 9:30amLocation: SBCA, 914 A Santa Barbara Street

MARCH 2013SBCA Board of Directors MeetingMarch 5, 2013 from 5:00pm to 7:00pmLocation: SBCA, 914 A Santa Barbara Street

SBCA Online Planroom Demo & TrainingMarch 6, 2013 from 10:00am to 11:00amLocation: SBCA, 914 A Santa Barbara Street

Built Green OrientationMarch 7, 2013 from 9:00am to 10:00amLocation: Built Green Resource Center,914 A Santa Barbara Street

State Safety ExpoMarch 26 - 28, 2013 from 7:00am to 6:00pmLocation: Cosumnes River College,Sacramento

SBCA Membership Tip Get the most out of your membership!

We offer monthly networking events such so you can connect with members and stay in touch with the industry. Join us for a Builder Breakfast, Taco Tuesday, Golf Tournament or other special event to meet

friends and colleagues, and make new connections. Call us today at 805.884.1100!

www.sbcontractors.org

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

REGISTRATION

Company

Attendee Name(s)

SBCA & Built Green Members - $15

PAYMENT Enclosed is my check for $ (payable to SBCA)

Visa/MasterCard/AmEx $

Name on Card Card Number Expiration Date Security Code Email Phone Cardholders Signature

REMITTANCE OR QUESTIONS - Payment must accompany form -

Santa Barbara Contractors AssociationP. O. Box 23409, Santa Barbara, CA 93121

805.884.1100 phone 805.884.1108 faxwww.sbcontractors.org [email protected]

Prevailing Wage Law, Compliance and Critical Updates

Learn from the best! A must for owners, estimators, project man-agers and o�ce administrators.

Critical updatesPrevailing wage hot topicsCompliance 101Ideas that can give you the real advantage.

Presented by:Monte TenEyck, CLU, ChFC, TenEyck Financial

Financial Consultant

Naomi R. Dewey, Esq., Hardin & Co�n LLPEmployment Law for Employers

Rick Heldwein, Soares, Sandall, Bernacchi & PetrovichCerti�ed Public Accountant

Date:January 30, 2013

Time: 8:30am to 9:30am

Location:Santa Barbara Contractors Association 914 A Santa Barbara StreetSanta Barbara

Cost:$15 SBCA & Built Green Members

Wednesday January 30, 2013

Builder Breakfast

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Building a new home takes commitment, teamwork and dependability. At

American Riviera Bank, our commitment to our customers and to providing

construction financing has never stopped – not many banks can say that!

Whether helping rebuild after the fires or helping you build your dream

home, the community can depend on us to be with them through thick

and thin. We want to be part of your team so call us today to learn more!

Feel good about your bank1033 Anacapa Street | Santa Barbara, CA 93101

Phone (805) 965-5942 | AmericanRivieraBank.com

Randall Barnes, Signal Construction, Stephen Wiley, City Attorney, Eusebio Cordova, VP Construction Lending, and Bill Wolf, Paci�c Architects

Commitment to Local Construction

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

HAYWARDSO YOU CAN BUILD...SMARTER

Building in the Central Coast Since 1919

Windows • Doors • Cabinets

Come Visit Our New Showroom Located At:417 Rose Avenue

Santa Barbara, CA805.965.7772

www.haywarddesigncenter.com

Hayward is a family-owned and operated business since 1919. We set a high stan-dard for customer service, quality and unparalleled value. Our knowledgeable, experience staff can help you identify the perfect windows, doors and cabinets for your project. Lift and slides, bi-folds, large framed openings are our specialty.

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

State Compensation Insurance Fund is not a branch of the State of California.

We protect the peoplewho build California.

Will my supplies be here on time? Am I going to get this bid? We understand those on the job in California have more on their mind than workers’

compensation insurance. So let us put your mind at ease: you cancount on the strength and stability of State Fund. We’ve never pulled

out of the market due to an economic downturn, and we never will. Visit statefundca.com today to learn about the 6% discount on premiums we

o�er eligible GSBE members. Your individual business may be eligible for even more discounts. Thanks for reading…we’ll let you get back to work.

Together, we’ll help keep California working.statefundca.com

Member of Golden State Builders Exchanges

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Over 45 years combined inspection experience.Quality Inspections / Fast Turnaround

[email protected]

State Compensation Insurance Fund is not a branch of the State of California.

We protect the peoplewho build California.

Will my supplies be here on time? Am I going to get this bid? We understand those on the job in California have more on their mind than workers’

compensation insurance. So let us put your mind at ease: you cancount on the strength and stability of State Fund. We’ve never pulled

out of the market due to an economic downturn, and we never will. Visit statefundca.com today to learn about the 6% discount on premiums we

o�er eligible GSBE members. Your individual business may be eligible for even more discounts. Thanks for reading…we’ll let you get back to work.

Together, we’ll help keep California working.statefundca.com

Member of Golden State Builders Exchanges

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Sierra Pacific Industries is a third-generation, family-owned and operated forest products company based in north-ern California. With nearly 1.9 million acres of forestland in California and Washington, Si-erra Pacific is the largest pri-vate forestland owner in North America.

Sierra Pacific operates 12 saw-mills, 8 cogeneration facilities and 4 wood remanufacturing/millwork plants in California and Washington, as well as one of the fastest growing wood win-dow companies in the West-ern United States. We employ nearly 3,400 people.

At Sierra Pacific, we believe that healthy trees, cool clean water and enduring wildlife habitat are the natural result of sound for-est management practices. Our forest harvesting philosophy is based on extensive scientific research. We have undertaken exhaustive planning to guar-antee that we meet or exceed the environmental protection standards of the Sustainable Forestry Initiative® (SFI) and forestry regulations in California and Washington - the highest standards in the world.

From our Forest To your Home

SIERRA PACIFIC WINDOWSHIGH QUALITY WOODEN WINDOWS

SUSTAINABLY GROWN, FAMILY OWNED & PROUDLY MADE IN CALIFORNIA

PLEASE VISIT OUR SANTA BARBARA SHOWROOM LOCATED AT:

516 EAST GUTIERREZ STREET, SUITE EPH: 805.963.6528

www.sierrapacificwindows.com

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Law Offices of Barton C. Merrill Trial Attorney and Counselor at Law

_______________________________________________________________

Specializing in Construction Law __________________________________________

Construction Litigation, including Mechanic’s Liens & Stop Notices Administrative Hearings before CalOSHA and the CSLB

Corporation & Partnership Agreements Contract Drafting & Review

_______________________________________________________________

Since 1989 Barton Merrill has represented contractors & design professionals in the Tri-Counties with all phases of construction.

_______________________________________________________________

225 E. Carrillo St., Suite 305 Santa Barbara, CA, 93101

(805) 750-0910 – Tel. (805) 564-8281 – FAX

[email protected]

FREE INITIAL CONSULTATION FOR SBCA MEMBERS

PRICE, POSTEL & PARMA LLP Counselors at Law

A Tradition of Service and Excellence Since 1852

_____________________________________________________________

Santa Barbara's Full Service Law Firm Specializing in All Aspects of

Construction and Surety Law, Public and Private Work, Contract and Project Planning,

Pre-Litigation Planning and Resolution of Construction Disputes, Mechanic Liens, Stop Notices and Bond Claims, Labor and Employment Law, Incorporations and Partnerships,

Business and Tax Law, Real Estate, Land Use and Environmental, Insurance Disputes

SPECIAL RATES FOR SBCA MEMBERS

_________________________________________

J. Terry Schwartz, Esq. ([email protected]); Christopher E. Haskell, Esq. ([email protected]) 200 East Carrillo Street, Suite 400, Santa Barbara, CA 93101; (805) 962-0011; Fax (805) 965-3978 www.ppplaw.com

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Expanding Our Office On the Central CoastPhilip E. Vega, President of Contractors & Developers Bonding is proud to announce the appointment of Myrna Smith, as Associate Vice President. She will be joining Jadon Smith, Vice President, and Manager of the new office in Pismo Beach.Contractors & Developers Bonding specializes in providing surety bonds to contractors and other surety clients. The largest independently owned, surety only broker in the western states, C&D bonding has over 80 years combined surety experience.

Let us know how we can assist with your surety bond needs

575 Price Street, #207 Pismo Beach, CA 93449 805-343-7434 www.cndbonding.com

Here to Assist with Your Surety Bond Needs

Myrna Smith, Associate Vice PresidentJadon Smith, Vice President

Now in Pismo Beach!

CONSTRUCTIONLAWSPECIALISTS

H&C HARDIN & COFFIN, LLP

Lawsuits, Arbitrations, Mediation Construction Defect Claims Contract, Business, and Nonpayment Disputes Construction Contract Consultation Mechanic’s Liens, Stop Notices, Attachment Payment & Performance Bonds Jobsite Accidents / Personal Injury Claims Insurance Coverage Analysis

For an appointment, please contact us at:

805-963-3301No charge for initial consultation to SBCA members

HARDIN & COFFIN, LLP

ATTORNEYS AT LAW

www.hardincoffin.com FAX: 805-963-7372

EMAIL: [email protected] 1531 Chapala, Suite 1

Santa Barbara, CA 93101 PLEASE CONTACT: Rick Hardin or Mark Coffin

CONSTRUCTIONLAWSPECIALISTS

H&C HARDIN & COFFIN, LLP

Lawsuits, Arbitrations, Mediation Construction Defect Claims Contract, Business, and Nonpayment Disputes Construction Contract Consultation Mechanic’s Liens, Stop Notices, Attachment Payment & Performance Bonds Jobsite Accidents / Personal Injury Claims Insurance Coverage Analysis

For an appointment, please contact us at:

805-963-3301No charge for initial consultation to SBCA members

HARDIN & COFFIN, LLP

ATTORNEYS AT LAW

www.hardincoffin.com FAX: 805-963-7372

EMAIL: [email protected] 1531 Chapala, Suite 1

Santa Barbara, CA 93101 PLEASE CONTACT: Rick Hardin or Mark Coffin

CONSTRUCTIONLAWSPECIALISTS

H&C HARDIN & COFFIN, LLP

Lawsuits, Arbitrations, Mediation Construction Defect Claims Contract, Business, and Nonpayment Disputes Construction Contract Consultation Mechanic’s Liens, Stop Notices, Attachment Payment & Performance Bonds Jobsite Accidents / Personal Injury Claims Insurance Coverage Analysis

For an appointment, please contact us at:

805-963-3301No charge for initial consultation to SBCA members

HARDIN & COFFIN, LLP

ATTORNEYS AT LAW

www.hardincoffin.com FAX: 805-963-7372

EMAIL: [email protected] 1531 Chapala, Suite 1

Santa Barbara, CA 93101 PLEASE CONTACT: Rick Hardin or Mark Coffin

CONSTRUCTION LAW SPECIALISTSCONSTRUCTIONLAWSPECIALISTS

H&C HARDIN & COFFIN, LLP

Lawsuits, Arbitrations, Mediation Construction Defect Claims Contract, Business, and Nonpayment Disputes Construction Contract Consultation Mechanic’s Liens, Stop Notices, Attachment Payment & Performance Bonds Jobsite Accidents / Personal Injury Claims Insurance Coverage Analysis

For an appointment, please contact us at:

805-963-3301No charge for initial consultation to SBCA members

HARDIN & COFFIN, LLP

ATTORNEYS AT LAW

www.hardincoffin.com FAX: 805-963-7372

EMAIL: [email protected] 1531 Chapala, Suite 1

Santa Barbara, CA 93101 PLEASE CONTACT: Rick Hardin or Mark Coffin

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

GOT BUILDING

PLANS.NEED BIDS?

NEW CONSTRUCTION REMODEL ADDITIONRESIDENTIAL COMMERCIAL

Learn how to use the SBCA Online Planroom for your construction project. Submit digital plans at NO COST TO YOU. Get access to contractors, and receive bids on your plans. Call SBCA staff for sup-port 884-1100 or email [email protected]. [email protected]

Established 1948

914 A Santa Barbara Street

805.884.1100

www.sbcontractors.org

Santa Barbara, CA

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Capitol Connection Q & A for ContractorsBy Shauna Krause, President, Capitol Services, Inc.

If you are reading this now and are unlicensed, a resolution to become a licensed contractor is a good choice in 2013. While most of us have been working to make (and keep!) New Year’s resolutions, the CSLB has been hard at work implementing new laws and regulations for con-tractors…

First, contractors should be aware that employ-ee-reporting laws have been strengthened by the passage of Assembly Bill 1794. The new law, which took effect January 1, 2013, authorizes the Employment Development Department (EDD) to share new-hire employee information with agencies in the state’s Joint Enforcement Strike Force on the Underground Economy (of which the CSLB is a member) and the State Compensa-tion Insurance Fund. This new practice of infor-mation sharing among state offices will ensure that employers are accurately reporting their employee payroll to their insurance carrier for establishing their Worker’s Compensation pre-mium.

Contractors are currently required to carry ad-equate Worker’s Comp insurance for employees or submit an exemption or Certificate of Self-Insurance. However, a CSLB study revealed that nearly half of licensed contractors either claim an exemption based on having no employees or maintain a minimum policy under which no em-ployees are reported to their insurance carrier.

“This landmark legislation benefits consumers, contractors, and employees,” said CSLB Registrar

Steve Sands. “When employers properly report and insure employees, consumers are protected by Workers’ Compensation insurance coverage if an accident occurs on their property, businesses pay less in insurance premiums, and employees are eligible for unemployment insurance when they’re properly listed on the payroll.”

Next up, Assembly Bill 2237, sponsored by the CSLB, more clearly defines the term “consultant” as it relates to building and construction work. The new law states that anyone who provides or oversees bids for construction, arranges for sub-contractor work and schedules, and/or has over-sight for a project is, in fact, acting in the capac-ity of a contractor and must be state-licensed. In California, a state contractor license is required for any project that is $500 or more in combined labor and material costs.

Another CSLB-sponsored bill strengthens en-forcement authority over contractors who vio-late state contracting laws. AB 2554 amends Business and Professions Code sections 7011.4 and 7106.5 to enable the CSLB Enforcement di-vision and its representatives to issue notices to appear in court related to disciplinary actions against a license.

Several other laws affecting consumers, contrac-tors, and the construction industry took effect as the new calendar arrived:

AB 2219 indefinitely extends the requirement that all C-39 Roofing contractors obtain workers’

compensation insurance coverage, even if they certify that they have no employees. The bill also extends, indefinitely, the requirement that insur-ers conduct annual audits, and requires that these audits be conducted in person to verify the accuracy of the reported number of employees.

AB 2114 enacts new construction permit re-quirements for swimming pools, spas, or public wading pools.

AB 2339 requires state regulators and those in-volved in the heat pump and geothermal heat-ing and cooling industries to evaluate policies and develop infrastructure for wider use of these technologies.

SB 1576 allows the CSLB to take administrative action if a licensee files a false complaint again another licensee.

For a complete list of the new and revised laws affecting State Contracting Practices, please visit our website at www.cutredtape.com or call with any questions.

While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email [email protected], or write us at Capitol Services, Inc., 1225 8th St. Ste. 580, Sac-ramento, CA 95814. Research past columns at www.cutredtape.com.

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

www.builtgreensb.org

C A N YO U R P ROJ EC T B EB U I L T G R E E N ?

Built Green Santa Barbara is an environmenal building program that distinguishes and promotes resource efficient design and construction. Enroll your construction project today!

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Interested in a career in the building trades? There is a critical shortage of construction workers. Over 1 million new jobs will be created nationally in the next seven years, with 2,500 of them in Santa Barbara and Ventura in the next three years. California construction workers earn an average of $24 an hour and journey-level workers earn $70,000-plus a year!

Spring 2013

CT 111 Beginning Constr Trades M: 6-9 pm (16 wks) Wake Center (Beg. 1/28/13)

Beg. Const. Lab Sat: 8:00-1:00pm (16 wks) Wake Center

CT 113 Roof Framing M: 6-9pm (16 wks) Wake Center (Beg. 1/28/13)

CT 115 Intermediate Finish Carpentry Th: 6-9pm (16 wks) Wake Center (Beg. 1/31/13)

CT 118 Measuring and Calculating Th: 6-9pm (16 wks) Wake Center (Beg. 1/31/13)

CT 124 Weatherization Sat: 1:15-5:20pm (16 wks) Wake Center (Beg. 2/2/13)

CT 127 Sustainability Audit W: 5-9pm (16 wks) Wake Center (Beg. 1/30/13)

CT 130 Contractors License Prep W: 4:45-5:45pm + Online 2 hrs (16 wks) WC (Beg. 1/30/13)

CT 290 Work Experience in Construction Trades T:4:45-5:45 WC (Beg. 1/29/13)

CT 121 Blueprint Reading for Electricians T: 6-9pm (16 wks) Wake Center (Beg. 1/29/13)

CT 194 Intro to Natl Electrical Code M:6-9pm (16 wks) Rod Bond Training Center,

Buellton (Beg. 1/28/13)

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

AND RAIN GUTTERS

“We think of Quality and Service first.”Owned and Operated for 25 Years by Jack Martin

FREE ESTIMATE AND EVALUATION

Expert in Leak RepairsReroof Specialists

Tile / SlateComposition Shingles

Single Ply (PVC)Full Maintenance Department

Aluminum / Copper Gutters 5“ Ogee Seamless and

6” Half Round Seamless

LIABILITY INSUREDLic. 674-048

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

[email protected]

(805) 683-1848Fax: 805.964.6653

Lic. #559076

GEOTECHNICAL SERVICESSoils Engineering Reports, Slope Stability

Foundation Forensics, Liquefaction AnalysisENVIRONMENTAL SERVICES

Percolation Testing, Septic FieldsEnvironmental Site Assessment

GEOLOGIC SERVICESEngineering Geology Reports

Fault and Landslide Investigation, Bluff SetbackSPECIAL INSPECTION

Welding, High Strength Bolt, FireproofingEpoxy, Concrete, Masonry, URM Retrofit

CONSTRUCTION INSPECTIONGrading and Testing Observation, CalTrans Certified

Footing and Foundation ObservationLABORATORY AND DRILLING SERVICES

In-House Laboratory Testing, andTract-Mounted CME Drill Rig

Federal and California Certified Small Business

Katz

Moses

Calles Construction&

Lic. # 955924

Foreman - $63.96/hr*• Finish Carpenter - $55.77/hr*• Journeyman Carpenter - $46.80/hr*• Level 2 Apprentice Carpenter - $39.77/hr*•

Level 1 Apprentice Carpenter - $37.29/hr*• Level 2 Laborer - $33.53/hr*• Level 1 Laborer - $27.80/hr*•

*Includes wage, tax, insurance, and overhead and profit mark up.

Skilled Tradesmen for Hire - Labor Rates:

Hard BidTrue cost plus 16%

Labor BudgetBuy your own lumber and save

Labor SupportBeef up your crew and deliver quality, on time

[email protected] www.constructionsb.com

framing finish carpentry demo concrete

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Prompt Payment Penalties Overview

By Bruce D. Rudman, Abdulaziz, Grossbart & Rudman

There have been a few cases in the past few years that affect the Prompt Pay Laws. The cases re-ally do not support the application of prompt pay penalties except where there is absolutely no dis-pute over the unpaid amount due or the work. We often hear of contractors claiming they are enti-tled to 24% on unpaid balances because of these laws and usually their position is contrary to the law. Thus, we thought it was important to give an overview of where these laws are today. For most projects, California requires the Owner of the project to pay the direct contractor progress payments within a statutory period (usually 30 days of the receipt of the demand for payment), unless there is a good faith dispute. The direct contractor is then required to pay its subcontrac-tors no later than seven days (previously ten days) after receipt of said progress payment. In the event of a good faith dispute between the owner and direct contractor or the direct contractor and subcontractor, the person making the payment is allowed to withhold 150% of the disputed amount, and must pay the undisputed amount or the person wrongfully withholding payment will be subject to a two percent (2%) penalty, per month, to be applied to any improperly withheld amounts, and the prevailing party is also entitled to attorneys fees and costs upon prevailing in a court action. Now, there have been three cases in the past five years that touch on these penalties, and in two cases, make the statute irrelevant. Knowing about these cases can allow you to change your dealings so you do not take yourself out of the right to penalties when you are wrongfully un-paid, or if you are the one withholding payment, you will know your rights to do so. First, the use of the term “good faith dispute” often arises. In an appellate case decided in April 2011, FEI Enterprises, Inc. v. Yoon, the court dealt with the issue of what constitutes a “good faith dis-pute” and more particularly, how it is determined if it was truly a good faith dispute. This question is vital, if the amount is withheld in good faith, then there can be no application of Prompt Pay penal-ties. The case at issue discussed nonpayment of a subcontractor under Business and Professions Code section 7108.5. That statute does not define what a “good faith dispute” is, and the parties in the FEI case had a difference of opinion as to its interpretation. The Court of Appeal determined that while “good faith” could be examined in two ways, for this analysis only one made sense. The first examination was the “subjective” test, look-ing at the state of mind or belief of the individual withholding the money. The second view is an “objective” test, which looks at whether any rea-

sonable person would objectively find the with-holding in good faith. It was decided that the Legislature’s intent was for a “good faith dispute” to be interpreted by objective means rather than any individual’s own beliefs. In reality, it would be impossible to diffuse one’s statement of their rea-son for withholding if it was entirely subjective. In the case at issue, the court felt that objectively, there was a basis for the withholding and there-fore the direct contractor did have a “good faith dispute” and no Prompt Pay penalties were to be awarded to FEI. Now, in two other cases, the Courts essentially took all of the teeth out of the statutes in two cir-cumstances which are somewhat common in the industry. In Martin Brothers Construction, Inc. v. Thompson Pacific Construction, Inc., a subcontractor sought prompt pay penalties on unpaid retention where there was absolutely no dispute over the objec-tion, but where the direct contractor had disputed entitlement to change orders. In this case, which seems to be an abomination of the purpose of al-lowing one to withhold money, because 150% of the amount of change orders was disputed, that sum could be withheld from retention due to the subcontractor. In our opinion, this certainly was not the intent of the Legislature in creating these laws. If the subcontractor had improperly performed work, 150% of the cost to correct that work should be able to be withheld. But, where the only dispute is whether it is entitled to addi-tional compensation, it seems absurd to say that the retention can be withheld pending the reso-lution of the change order dispute. But, that is the law decided by the Court of Appeal. Thus, if you want to argue about change orders, know that the person withholding your payment will not be liable for prompt pay penalties if they hold reten-tion hostage during the dispute. In the last of these three cases, the court ad-

dressed what a payment was called. A prior case had already indicated that one could not collect prompt pay penalties un-der the statute for unpaid retention where there was no retention held under the contract. That case seemed misplaced when the payment certainly was for unpaid progress. It did seem like the wrong stat-ute was applied in that case. But, that was not the issue in the case of Murray’s Iron Works, Inc. v.

Boyce, decided in January of 2008. In this case, there were just two payments to be made by the owner - a down payment and a final payment. The court held that a final payment, even though it was necessarily for progress of the work, was not a progress payment such that the penalties would apply. In Murray’s, the owner withheld funds from the final payment in the same manner as a progress payment because there was a dispute as to whether the correct material was used to finish ornamental railings. The jury determined that the contractor properly performed, and that prompt pay penalties should be awarded. The trial court thus awarded the contractor the full amount of its requested contract damages, prompt payment penalties, and attorney’s fees and costs under the Prompt Payment statute. Although the Prompt Pay statute does not define “progress payments,” the Court of Appeal held that “a payment made after construction is com-pleted is not a progress payment...” Based upon this illogical ruling, we strongly recommend that all construction contracts call for multiple prog-ress payments, and not payment in full on com-pletion. Again, it is very important for those in the con-struction industry to be aware of the interpreta-tion of the prompt payment laws to be sure they are protected.

Abdulaziz, Grossbart & Rudman provides this in-formation as a service to its friends and clients. This is of a general nature and is not intended to be a substitute for legal advice. Since laws are ever changing, please contact an attorney before us-ing any of the information contained within this Newsletter. Contact Abdulaziz, Grossbart & Rud-man at: P.O. Box 15458, North Hollywood, Cali-fornia 91606, (818) 760-2000; [email protected], www.agrlaw.com.

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

M E M B E R B E N E F I T SReferrals•Online Planroom•Safety Program•Networking Events•Weekly Newsletter•Government Affairs•Get Industry Updates•Educational Seminars•Annual Golf Tournament•Built Green Santa Barbara•Online Membership Listing•Annual Membership Directory•Advertise Directly to Construction •Industry in Weekly NewsletterNew Member Bio - Introduce •Your Business in the NewsletterGroup Insurance Programs •for Workers Comp, Auto, and Employee Benefits

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Members $75 Per Person — $65 for Groups of 10 or More $95 Per Person — $85 for Groups of 10 or More

Mark your calendars for the 2013 Annual Safety Expo . Three days of a ses-sion-packed curriculum on equipment training and certification, compliance, management, general safety and mechanical and technical workshops.

The 2013 Safety Expo Features: Keynote Presentations: Opening Keynote by Dr. John Howard , NIOSH,

“Aging Workers at Higher Risk of Death and Severe Injury;” “Crisis Manage-ment—Preparing for the Unexpected” Fred Walter, Esq., Walter & Prince LLP and Kevin Thompson, Reporter for Cal/OSHA Reporter, California Con-struction Safety Solutions.”

Safety Innovation Awards; Partnership Marketplace Exhibitors; Networking Opportunities

This conference provides you with opportunities to develop safety competen-cies through seminars and workshops - it will also help your company cut costs while preventing injuries and is recognized for its commitment to safety. This will help your company stay in the forefront of safety initiatives by exposing you to the latest updates on regulatory issues. Don't miss out on this unique educational experience—the Expo offers the cost of this training event at below industry pricing; not per session or per day, but for all three days.

Follow us on www.sacsafetyexpo.com which will provide updates on Expo presenters, topics, exhibitors, sponsorship, advertising, Innovation Award entries, announcements and registration! 2013 Safety Expo, contact Heidi Hughes, Event Director, [email protected] or Jim Neely, Safety Director, [email protected] or call 916-442-8991.

21

SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

PHONE (805) 965-1926 FAX (805) 963-6071

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

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SANTA BARBARA CONTRACTORS ASSOCIATIONWEEKLY NEWSLETTER January 16, 2013

Board of Directors 2013

John HolehousePresident

Jack Martin1st Vice President

Paulo Sitolini2nd Vice President

Dan GeorgeTreasurer

Peter NovakParliamentarian

Patrick Foster

David James

Jon Kenney

Brian Larkowski

William Mace

Mark Magid

Robert Mislang

Rodney Utt

Executive DirectorKarin [email protected]

Administrative AssistantApril [email protected]

Santa Barbara Contractors Association914 A Santa Barbara StreetP. O. Box 23409Santa Barbara, CA 93121805.884.1100 Phone805.884.1108 Faxinfo@sbcontractors.orgwww.sbcontractors.orgwww.builtgreensb.org

The Santa Barbara Contractors Association Newsletter is published weekly by the Santa Barbara Contractors Association, Inc. Edito-rial and advertising offices are located at 914 A Santa Barbara Street, P.O. Box 23409, Santa Barbara, CA 93121. Office 805-884-1100, Fax 805-884-1108, Email [email protected]. A subscription is included in the annual membership dues. The newsletter is distrib-uted to more than 600 local businesses and agencies. Articles appearing in this news-letter are presented as a public service and may not reflect the opinion of the publisher, its board of directors or its members. Please send comments regarding the newsletter to [email protected].