BILL NUMBER: AB 2036	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bill Berryhill

                        FEBRUARY 17, 2010

   An act to amend Section 3186 of the Civil Code, relating to works
of improvement.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2036, as introduced, Bill Berryhill. Public works: stop
notices.
   Existing law provides that it is the duty of a public entity, upon
receipt of a stop notice for a public work of improvement, to
withhold from the original contractor, or from any person acting
under his or her authority, money or bonds due or to become due to
that contractor in an amount sufficient to answer the claim stated in
the stop notice and to provide for the public entity's reasonable
cost of any litigation thereunder.
   This bill would require a public entity to promptly tender its
defense to the original contractor in any litigation to enforce the
stop notice, and, if the contractor accepts that tender, the bill
would require the public entity to reduce the amount withheld to the
amount necessary to answer the claim stated in the stop notice.
   Because the bill would impose new duties on local public
officials, the bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 3186 of the Civil Code is amended to read:
   3186.  It shall be the duty of the public entity, upon receipt of
a stop notice pursuant to this chapter, to withhold from the original
contractor, or from any person acting under his or her authority,
money or bonds (where bonds are to be issued in payment for the work
of improvement) due or to become due to that contractor in an amount
sufficient to answer the claim stated in the stop notice and to
provide for the public entity's reasonable cost of any litigation
thereunder.  The public entity shall promptly tender its defense
to the original contractor in any litigation to enforce the stop
notice, and, if the contractor accepts that tender, the public entity
shall reduce the amount withheld to the amount necessary to answer
the claim   stated in the stop notice.  The public
entity may satisfy this duty by refusing to release money held in
escrow pursuant to Section 10263 or 22300 of the Public Contract
Code.
  SEC. 2.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.