Articles Posted in Construction Generally

The Texas Commission of Licensing and Regulation’s (Commission) recently amended the existing rules governing air conditioning and refrigeration contractor applicable codes, 16 Tex. Admin. Code, Chapter 75, § 75.110. Revised Section 75.110 states:

“(a) The commission adopts the following as the applicable codes as referenced in the Act and this chapter: (1) 2009 edition of the Uniform Mechanical Code; and (2) 2009 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.
(b) The 2009 codes will be in effect through December 31, 2014. All air conditioning and refrigeration work permitted or started prior to January 1, 2015, may be completed in accordance with the 2009 code editions.
(c) The commission adopts the following as the applicable codes as referenced in the Act and this chapter: (1) 2012 edition of the Uniform Mechanical Code; and (2) 2012 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.
(d) The 2012 codes will be effective January 1, 2015.” (Emphases added).

The Texas Department of Licensing and Regulation (Department) drafted and distributed the proposed rules to persons internal and external to the agency and published them in the April 11, 2014, issue of the Texas Register (39 Tex. Reg. 2735). Prior to the deadline for public comments (May 12, 2014), the Department received four public comments regarding the proposed rules. The public comments and the Department’s response to the public comments are available in its Justification for Administrative Rule Adoption.

The Department also recently lowered the number of hours of instruction on state laws and rules required annually from 2 hours to 1 hour, effective for licenses that expire on or after June 1, 2014. The total number of continuing education hours required annually, however, will remain at 8 hours. The other 7 hours of instruction must be courses taken in one or more of the following subjects: (1) Texas Occupations Code, Chapter 1302, Air Conditioning and Refrigeration Contractors; (2) Title 16, Texas Administrative Code, Chapter 75, Air Conditioning and Refrigeration Administrative Rules; (3) The International Mechanical Code, the Uniform Mechanical Code, or other applicable codes; (4) Ethics; (5) Business practices; or (6) Technical requirements. Continuing education courses must be completed within the term of the license being renewed. The continuing education courses must have been taken within the term of the license to be renewed, e.g., if the license expires on December 15, 2013, the continuing education courses must have been taken between December 15, 2012 and December 15, 2013.

Additional Source: Texas Department of Licensing and Regulation, Justification for Administrative Rule Adoption, Air Condition and Refrigeration Contractors; Texas Department of Licensing and Regulation, Air Conditioning and Refrigeration Contractors Continuing Education

The practice of including an arbitration provision in all types of contracts has become quite common. Including such a provision in a contract should, however, always be a considered choice, based on sound advice, to avoid any misunderstandings about the breadth, scope and consequences of including such a provision. Yesterday, Pillsbury attorney Ray Sweigart published his client advisory titled About that English Law and Arbitration Clause: Consider enforcement implications before signing. In the Advisory, he discusses the practice, in international commercial contracts, parties with no operations or other relationship to England or the United Kingdom specifying English law as controlling, with a clause providing for arbitration of disputes in London. In Cruz City v Unitech & Ors, [2014] EWHC 3131 (Comm), the English High Court was faced with a dispute over enforcement of an arbitral award between a Mauritian claimant and an Indian defendant. Noting the English law policy that judgments of the English court and English arbitration awards should be complied with, and under the principles set out in Masri v Consolidated Contractors International (UK) Ltd (No 2), [2008] EWCA Civ 303, the court held that it was appropriate to enforce an arbitral award by the appointment of receivers over the foreign defendant’s assets.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Ray Sweigart, the author of this blog.

The Joint Board of Licensure and Certification, State of New Hampshire compiled a list of the most common electrical installation deficiencies in the State of New Hampshire in 2014, formatted to the 2014 edition of the National Electrical Code (NFPA 70-2014) as follows:

• Use of electrical equipment without following the manufacturer’s instructions, including installation and securing of expansion fittings in runs of Rigid Polyvinyl Chloride (PVC) Conduit and improper tightening of electrical connections
• Inadequate clearances: working space, clear spaces, headroom and dedicated equipment space
• Improper sealing of underground raceways
• Improper grounding of electrode system
• Bonding of metal water piping in the vicinity of separately derived systems
• Wireways and consideration of 310.15(B)(3)(a)
• Improper use of NM cable in other structures permitted to be Types III, IV or V construction
• Improper installation of exposed vertical risers from fixed equipment
• Improper use of Flexible Cords and Cables, Article 400
• Failure to use weather-resistant outdoor receptacles
• Inadequate mounting height of switches
• Failure to use proper methods for circuit directories and circuit Identification
• Improper connection of septic pumps
• Failure to comply with signage requirements
• Lack of separation of Emergency System Conductors from other conductors
• Misunderstanding of the requirements for the installation of branch circuits supplying emergency lighting

Additional Source: Electrical Licensing Concerns And Commonly Found Installation Deficiencies in the State of New Hampshire 2014

On October 13, 2004, California Governor Edmund G. Brown Jr. appointed Susan Granzella of Sacramento as a new (public) member of the California Contractors State License Board. Prior to the appointment, according to the Governor, Granzella “held several positions at Visa Inc. from 1996 to 2014, including senior director and vice president for technical documentation and audit and compliance coordination for global development.” The CSLB further noted that, in the latter role, Granzella “oversaw Visa’s technical writing and publishing efforts, distributing content internationally to banks and processors, and managed staff in both the United States and India.” Registrar of Contractors Steve Sands swore in Ganzella on October 21, 2014, and her term continues through June 1, 2016. With Granzella’s appointment, there remains only one vacancy on the 15-member Board. Congratulations and welcome!

Additional Information: CSLB, Industry Bulletin # 14-16 (Oct. 22, 2014).

The New Hampshire Electrician’s Board has confirmed that the 2014 National Electrical Code (NEC) will become effective January 1, 2015 and, moreover, that all exams will be on the 2014 NEC starting on October 1, 2014. All New Hampshire licensed master and journeyman electricians will also be required to complete an “approved” 15-hour course on the 2014 NEC between January 1, 2014 and December 31, 2014 regardless of the licensee’s renewal date. See R.S.A. § 319-C:6-c. Each master and journeyman license without verification of the required 2014 NEC continuing education by January 1, 2015 will be invalid until proof of the course is received, and invalid licenses will be treated the same as a lapsed license and subject to the applicable laws for performing electrical installations without being licensed. See id.

Additional Source: State of New Hampshire Electricians’ Board; ECC, Adoption of 2014 edition of National Electrical Code®

The Nevada State Contractors Board, at its meeting scheduled for October 23, 2014, at 8:45 a.m. by video conference at two of the Board’s offices, is expected to discuss, in its Executive Session, proposed amendments to Nevada Administrative Code § 624.170 concerning remodel of high rise buildings for possible action.

Currently, NAC § 624.170 addresses Class B general building contractor subclassifications and the work authorized for persons licensed in the respective subclassifications:

1.  PREMANUFACTURED HOUSING (subclassification B-1): The fitting, assembling, placement and installing of premanufactured units, modular parts and their appurtenances for the erection of residential buildings which do not extend more than three stories above the ground.
2.  RESIDENTIAL AND SMALL COMMERCIAL (subclassification B-2): The construction and remodeling of houses and other structures which support, shelter or enclose persons or animals or other chattels, and which do not extend more than three stories above the ground and one story below the ground.
3.  SPECULATIVE BUILDING (subclassification B-3): The construction upon property owned by the contractor of structures for sale or speculation.
4.  SERVICE STATIONS (subclassification B-4): The construction of structures and installation of equipment used to perform service upon vehicles.
5.  PREFABRICATED STEEL STRUCTURES (subclassification B-5): The construction with prefabricated steel of structures to be used for the support, shelter or enclosure of persons or animals or other chattels.

Nevada State Contractors Board Office Locations:

2310 Corporate Circle, Suite 200
Henderson, Nevada 89074
9670 Gateway Drive, Suite 100 Reno, Nevada 89521

Additional Source: Nevada State Contractors Board Notice of Meeting (Oct. 23, 2014).

Effective January 1, 2015, Senate Bill 193, signed into law on July 11, 2014 by Alaska Governor Sean Parnell, increases the required construction contractor bonding amounts as follows:

“…(1) general contractor shall be $25,000;
(2) general contractor with a residential contractor endorsement under AS 08.18.025 who performs exclusively residential work shall be $20,000;
(3) mechanical or specialty contractor or home inspector shall be $10,000; or (4) contractor whose work on one project with an aggregate contract price of $10,000 or less, including all labor, materials, and other items, when the work is not part of a larger or major operation or otherwise divided into contracts of less than $10,000 to evade a higher bonding requirement, shall be $5,000.”

Under the amended law, in lieu of a surety bond, the license applicant may file with the Commissioner a cash deposit or other negotiable security acceptable to the Commissioner in the amount of the required bond.

Additional Source: Alaska Department of Commerce, Community, and Economic Development, New Legislation Affecting Licensure in Alaska

Today, Pillsbury attorneys Matthew Burke and Craig Becker published their client advisory titled Court of Appeal Holds Transfer Tax Applies to Legal Entity Changes in Ownership. The Advisory discusses the 2nd District Court of Appeal decision in 926 North Ardmore Avenue, LLC v. County of Los Angeles. The Court of Appeal held that Proposition 13 changes in ownership prompted by transfers of legal entity interests should also be characterized as “realty sold,” resulting in the imposition of realty transfer taxes under the California Documentary Transfer Tax Act in cases even where no real property interests are transferred at all.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Matthew Burke or Craig Becker, the authors of this blog.

Governor Edmund G. Brown Jr. declared the drought in California a state of emergency on January 1, 2014 and directed state officials to take all necessary actions to prepare for these drought conditions. In response, the California Contractors State License Board (CSLB), is doing its part, began expediting applications for C-57 Well Drilling Contractors and encouraging Class “A” General Engineering Contractors that are authorized to perform water supply projects (but not well drilling unless they possess a C-57 Well Drilling classification) to add the C-57 classification to their license. More recently, the CSLB voiced its concern that there may be “price gouging” “occurring in some California counties where the drought has taken a serious toll on individual residential water wells,” identifying by name Tulare and Kern counties. It reminds all contractors and, in particular, C-57 Well Drilling and C-61/D-21 Machinery and Pumps contractors to make sure the prices they are charging are within legal guidelines following the declaration of a state of emergency.

The CSLB cautions that “[t]he marketplace demand for drilling services is not justification for raising prices for the same services that would have been charged prior to the declared state of emergency.” It cites to Subdivision (a) of California Penal Code § 396, which states, in part: “While the pricing of consumer goods and services is generally best left to the marketplace under ordinary conditions, when a declared state of emergency results in abnormal disruptions of the market, the public interest requires that excessive and unjustified increases in the prices of essential consumer goods and services be prohibited.”

With specific respect to contractors, Subdivision (c) of Penal Code § 396 states:

“Upon the proclamation of a state of emergency resulting from an earthquake, flood, fire, riot, or storm declared by the President of the United States or the Governor, or upon the declaration of a local emergency resulting from an earthquake, flood, fire, riot, or storm by the executive officer of any county, city, or city and county, and for a period of 180 days following that declaration, it is unlawful for a contractor to sell or offer to sell any repair or reconstruction services or any services used in emergency cleanup for a price of more than 10 percent above the price charged by that person for those services immediately prior to the proclamation of emergency. However, a greater price increase is not unlawful if that person can prove that the increase in price was directly attributable to additional costs imposed on it by the supplier of the goods, or directly attributable to additional costs for labor or materials used to provide the services, provided that in those situations where the increase in price is attributable to the additional costs imposed by the contractor’s supplier or additional costs of providing the service during the state of emergency, the price represents no more than 10 percent above the total of the cost to the contractor plus the markup customarily applied by the contractor for that good or service in the usual course of business immediately prior to the onset of the state of emergency” (emphasis added).

A violation of Penal Code § 396 is a misdemeanor and could result in county jail imprisonment for up to one year or by a $10,000 fine, or both. Such a violation would also constitute an unlawful business practice and unfair competition under California Business & Professions Code §§ 17200 et seq. and could result in additional civil penalties.

Additional Resource: California Expediting Well Drilling Licenses During Drought