That certainty was the case with regards to SB 465.
Spurred by a Berkeley balcony collapse that killed six people last summer, state lawmakers sent a bill to Gov. Jerry Brown which he signed that requires contractors to report past felony convictions related to construction to the Contractors State License Board (CSLB). Senators Jerry Hill, D-San Mateo, and Loni Hancock, D-Oakland, introduced SB 465, which also stipulates that the California Building Standards Commission must perform a study on recent exterior elevated structure failures and submit a report with suggestions for improvements to existing building codes.
SB 465 was originally voted down in July 2015, but because of mounting political pressure to do something on the issue, late in the 2016 legislative session, Senators Hill and Hancock revitalized the legislation and added new language that intended to required all CSLB licensees to report judgments, arbitration awards against them, or settlement payments of claims to the CSLB.
The elements of the bill that would require the Commission to investigate existing building standards associated with the construction, inspection, and maintenance of exterior elevated elements (balconies) and make recommendations for changes to the California Building Code and the portion of the bill that would require that licensees report any felonies related to construction to the CSLB were negotiate with industry and were workable. However, the section that would require the CSLB to produce a report on judgments, arbitration awards and settlements involving licensees, regardless of amount, for claims on any alleged construction defects was overly broad and did not recognize the unique circumstances of the litigation environment in the construction industry. Those requirements would not have provided the Board with leads that have any significant chance of identifying bad actors. Instead, it would have only result in a waste of CSLB staff time and resources as the Board would be barraged with nuisance settlements that have no bearing on a contractor’s soundness. In addition, many settlement agreements include confidentiality provisions for good public policy reasons. Yet, SB 465 was to require the CSLB to obtain information regarding this protected information from licensees. This would have required licensees to expose themselves to liability for breach of contract claims or face retaliation from the Board which licenses them. Obviously this was an untenable position for our contractors.
For the reasons stated above, the SCGMA opposed the measure and went hard to work on stopping the bill. That’s where the little change that achieved a big result came to fruition. Based on our opposition, SB 465 was amended to make the judgments, arbitration and settlement reporting requirement portion of the bill a three year voluntary program. In effect, that portion of the bill was neutered. The end result is that a bad bill became a good bill and the issue that the bill was original intended to address was taken care of. A small change to a big bill made all the difference in the world.