BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 2335
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: nakanishi
VERSION: 4/14/08
Analysis by: Mark Stivers FISCAL: no
Hearing date: June 10, 2008
SUBJECT:
Building permit applications
DESCRIPTION:
This bill replaces the existing statutory forms related to
building permits with revised and consolidated forms.
ANALYSIS:
Current law declares an urgent and statewide public interest in
assuring that building contractors comply with the Contractors
License Law and provide workers' compensation insurance and that
property owners are informed about and protected from fraudulent
representations, liability for worker's injuries, liability for
material and labor costs unpaid by contractors, licensing
requirements, and employer's tax liabilities when improving
their property as owner-builders.
If a city or county requires a building permit for the
construction, alteration, improvement, demolition, or repair of
any building or structure, current law requires that the city or
county use specified forms to collect information on the project
as well as specified declarations from the applicant and, if the
work is being done without a licensed contractor, from the
property owner. These forms and declarations include:
A Building Project Identification form, which contains
information about the property, the applicant, the owner, the
architect or engineer, and the contractor.
The Licensed Contractor Declaration, which certifies that a
contractor has a valid license.
AB 2335 (NAKANISHI) Page 2
The Owner-Builder Declaration, which certifies that the owner
is doing or overseeing the work himself or herself and is
therefore exempt from the Contractors License Law.
The Workers' Compensation Declaration, which certifies that
the applicant complies with workers' compensation requirements
or is exempt.
The Construction Lending Agency form, which names the
construction lending agency for the performance of the work.
The Owner-Builder Information form, which informs
owner-builders about the risks and liabilities they assume by
getting permits in their names.
The Owner-Builder Verification, which verifies that an
Owner-Builder Declaration is in fact correct and was signed by
the property owner.
This bill replaces the existing statutory forms related to
building permits with substantially similar forms that are
revised and consolidated. Specifically, the bill:
Repeals existing sections of law containing the Building
Project Identification form, the Licensed Contractor
Declaration, the Owner-Builder Declaration, the Worker's
Compensation Declaration, the Construction Lending Agency
form, the Owner-Builder Information form, and the
Owner-Builder Verification.
Adds a new section of law specifying the contents of a Permit
Application, which shall contain a Building Project
Identification form, a Licensed Contractor Declaration, an
Owner-Builder Declaration, a Worker's Compensation
Declaration, a Declaration Regarding Construction Lending
Agency, and an Authorization of Agent to Act on Property
Owner's Behalf. The new section also contains a Notice to
Property Owner and an Owner's Acknowledgement and Verification
of Information form.
Requires an individual who executes an Owner-Builder
Declaration, at the time of execution, to document the
identity of and verify the signature of the property owner, as
opposed to verifying identity at the time the Owner-Builder
Information form is given to the applicant.
Revises the various forms and makes the following substantive
changes:
? Deletes from the Building Project Identification form
AB 2335 (NAKANISHI) Page 3
the name of the contractor and the portion to be filled out
by the permitting agency related to the assessor's parcel
number, permit number and date, and the value of the work.
? Adds to the Owner-Builder Declaration an acknowledgement
that an owner-builder may not sell a structure that he or
she built unless it has been constructed in its entirety by
licensed contractors or the owner-builder used the
structure as a personal residence for at least one year
prior to the completion of the permitted work.
? Requires that the Workers' Compensation Declaration
include the expiration date of the policy and the name and
phone number of the insurance agent.
? Clarifies that a certificate of consent to self-insure
for workers' compensation must be issued by the Director of
Industrial Relations.
? Creates a new Authorization of Agent to Act on Property
Owner's Behalf that must be signed by the property owner if
the Permit Application or Owner-Builder Declaration has
been executed by a person other than the property owner.
? Requires that the Notice to Property Owner appear on the
official letterhead of the permitting agency.
? Requires a property owner to initial each individual
paragraph of the Owner's Acknowledgement and Verification
of Information form.
? Adds language to the Owner's Acknowledgement and
Verification of Information form stating that the property
owner may be held liable and subject to serious financial
risk for any injuries sustained by an unlicensed person and
his or her employees while working on the property and that
a homeowner's insurance policy may not provide coverage for
such injuries.
? Adds language to the Owner's Acknowledgement and
Verification of Information form stating that an
owner-builder cannot legally build single-family
residential structures with the intent to sell, unless all
work is performed by licensed subcontractors and the number
of structures does not exceed four within any calendar
year, or all of the work is performed under contract with a
licensed general building contractor.
? Adds language to the Owner's Acknowledgement and
Verification of Information form requiring the property
owner to notify the permitting agency of any additions,
deletions, or changes to information on the form.
? Adds language to the Owner's Acknowledgement and
Verification of Information form stating that the
Contractor State License Board may not be able to assist a
AB 2335 (NAKANISHI) Page 4
property owner with any financial loss sustained as a
result of work by an unlicensed contractor and that the
property owner may be held liable for damages if an
unlicensed contractor or employee is injured while working
on the property.
COMMENTS:
1.Purpose of the bill . According to the author, the current
statutes relating to building permit applications and the
corresponding declarations are redundant and confusing to
applicants, property owners, and building officials alike. As
a result, applicants and property owners tend to sign the
forms hastily without comprehending their full meaning or
significance, thereby frustrating the intent of the forms to
communicate the potential legal and financial liability
intrinsic to owner-builder construction permits. This bill is
intended to place all of the various forms into one section of
law and revise them by using direct language to more clearly
communicate their message.
2.Technical amendments .
On page 6, line 30 after "completed" insert
"by the property owner"
On page 7, strike line 1 and insert "Excluding
the Notice to Property Owner, for"
On page 7, line 2 after "responsible" insert
"for executing"
On page 8, line strike lines 21-22 and insert
"(c) When the Owner-Builder Declaration in subdivision
(a) is executed, a"
On page 9, line 23 before "I" insert "As an
Owner-Builder,"
On page 9, line 26 strike "I will check with
my insurance agent." and insert "I am willfully acting
as an Owner-Builder and am aware of the limits of my
insurance coverage for injuries to workers on my
property."
On page 9, lines 33-34 strike "if someone will
actually be responsible for performing the
construction,"
On page 10, strike lines 32-33 and insert "for
in my name and understand that that I am the party
legally and financially responsible for proposed
construction activity at the following address:"
AB 2335 (NAKANISHI) Page 5
On page 10, line 36 after "legally" insert
"and financially"
On page 10, line 37 strike "including legal
and financial liability,"
On page 10, lines 38-39 strike "governing
Owner-Contractors or Owner-Employers" and insert "that
govern Owner-Builders as well as 'employers'".
3. Chaptering conflict . This bill has a chaptering
conflict with SB 1691 (Lowenthal), which relates to mechanics
liens. If both bills continue to move, the author will need
to take chaptering amendments while the bill is still in the
Senate.
Assembly Votes:
Floor: 76-0
Trans: 7-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 4, 2008)
SUPPORT: California Building Officials (sponsor)
Contractors State License Board (sponsor)
California Spa and Pool Industry Education
Council
California State Association of Counties
Solano County Board of Supervisors
OPPOSED: None received.