In the wake of last month’s tragic apartment balcony collapse in Berkeley that killed 6 and seriously injured 7 others, two Northern California state senators have introduced new legislation with the stated goal of improving “construction industry disclosure.” Senate Bill 465 would require contractors to report to the Contractors State License Board (CSLB) if and when they are convicted of a felony “or any other crime substantially related to the qualifications, functions, and duties of a licensed contractor.” The proposed law would also require that every licensed contractor report “any civil action settlement…resulting in a settlement worth $50,000 or more, or a binding arbitration…worth $25,000 or more, resulting from specified acts.” Finally, the law would also require insurance carriers to report any payment of all or a portion of a civil action settlement or binding arbitration award against the contractor.
The bill, supported by the City of Berkeley and various public interest groups, has been touted as a public safety measure that would require the disclosure of criminal convictions and civil suits in cases of construction defects, fraud, negligence and incompetence. The California Building Industry Association and other trade groups oppose the legislation because it is overbroad and fails to take into account the reality of doing business as a contractor in the State of California. Moreover, opponents of SB 465 argue that the required disclosures are not good indicators of whether a contractor is a bad actor or whether a contractor’s license should be considered for revocation because, for example, contractors are often principally liable for others and settle claims even when they are not primarily or directly at fault.
SB 465 is available for viewing here and more information about SB 465 from the San Jose Mercury News can be viewed here. We’ll be keeping a close eye on SB 465 as it progresses through the legislative process.
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