Legislative Update - Assembly Judiciary Committee

SB 110 (Rubio): Existing law requires the seller of real property to make certain disclosures to the prospective buyer about the proximity of the property to natural hazard zones designated under the Public Resources Code.  This non-controversial bill would expand those disclosures by requiring an expert report commonly used to fulfill the natural hazard disclosure requirements to include a specified Notice of Mining Operation if the property is within one mile of a mining operation.

SB 110 passed the committee with a vote of 9-0.

SB 458 (Corbett): Existing law prohibits a lender from receiving a judgment for a deficiency after a short sale on a first mortgage or deed of trust.  This bill would expand that anti-deficiency protection for mortgages or deeds of trust other than the first, provided that the holder of the mortgage or deed of trust consents to the short sale.  The bill would also restate the current prohibition to clarify that the provisions do not impact multiple collateral loans.

SB 458 passed the committee with a vote of 9-0.

SB 459 (Corbett):
This bill would prohibit the willful misclassification of an employee as an independent contractor and would provide for civil penalties for a violation.  In addition, in order to inform persons whose rights are affected by misclassification, the bill requires employers to provide to independent contractors a form developed by the Employment Development Department (EDD) regarding the factors affecting and significance of being classified an independent contractor.  This bill would require employers to maintain for two years a record of all independent contractors hired by the employer.  Finally, to combat the use of unscrupulous consultants, the bill provides that a person who knowingly advises another person for money or other valuable consideration to treat a worker as an independent contractor to avoid employee status for the worker shall be jointly and severally liable with the employer if the worker is not found to be an independent contractor, with specified exemptions.

Supporters believe these steps will help address the serious problem of employee misclassification.  The bill is opposed by business interests who argue that the bill unfairly exposes them to potential liability because the classification of employees is an uncertain undertaking that is not controlled by a single objective test.  They also contend that the standard for willfulness under the bill is too low.  Opponents also object to the form requirement, contending that it is burdensome and unnecessary.

SB 459 passed the committee with a vote of 6-3.

SB 474 (Evans):
This bill would revise the rights and obligations of construction project owners, contractors and subcontractors regarding claims for negligence and other misconduct.  The bill would extend to commercial construction contracts the prohibitions against indemnification that currently exist for residential construction contracts.  It would also prohibit construction contracts requiring indemnity, insurance, or defense obligations by a subcontractor for the active negligence or willful misconduct of a general contractor, his agents, or other subcontractors.  In addition, the bill would apply to commercial construction contracts an option similar to existing law regarding residential contracts by which a subcontractor, after receiving claim information from the general contractor, may defend the claim or pay its portion of the claim.  The bill would also clarify that a public agency is prohibited from shifting its liability for its active negligence to a contractor, subcontractor, or materials supplier, and that a project owner, not acting as a project manager, general contractor, or materials supplier, is prohibited from shifting liability for its active negligence to a contractor, subcontractor, or materials supplier.

SB 474 is supported by a wide range of subcontractor associations, and by some public agencies, but continues to be strongly opposed by general contractors and property owners, despite the author's proposed amendments.  Opponents argue that the bill immunizes subcontractors for their own wrongdoing and unfairly shifts liability to general contractors and owners.  Any shift in responsibility, opponents argues, is unnecessary because existing practices and relationships have been satisfactory, and because insurance is readily available and affordable for subcontractors in commercial construction.  Prior opposition by public agencies is believed to be removed by the author's proposed amendments.

SB 474 passed the committee with a vote of 6-3.

SB 563 (Committee on Transportation & Housing): This bill would make a number of changes to existing requirements for noticing and conducting a board of directors meeting, and taking actions outside of a noticed meeting, in a common interest development (CID).

SB 563 passed the committee with a vote of 9-0.

SB 713 (Calderon): This bill would enact the Life Insurance Proceeds Disclosure Act of 2011, to establish disclosure standards for payment of life insurance benefits to a beneficiary by means of a retained asset account.  The disclosures required by the bill are consistent with a set of disclosures recently recommended by the National Association of Insurance Commissioners for adoption in all fifty states.

SB 713 passed the committee with a vote of 9-0.

SB 757 (Lieu):
This bill would close this perceived loophole by requiring that every policy or certificate for health insurance that is marketed, issued, or delivered to a resident of California, regardless of the situs of the contract or master group policy holder must offer or provide coverage for a registered domestic partner that is equal to the coverage provided to the spouse of an employee, insured, or policyholder, regardless of the sexual orientation or gender of the spouse or domestic partner, consistently with existing law.

SB 757 passed the committee with a vote of 6-3.