2012 legislation good for service industry
By Doug Walsh
With the 2012 legislative session officially adjourned, SPEC — the California Spa & Pool Industry EducationCouncil — reports that it had another busy and successful legislative year.
The most significant issue to potentiallyaffect the members of SPEC was the threat that the legislature would pass a tax on services. There were two proposalsintroduced in the 2012 legislative session that sought to extend the state sales tax to the service industry, both strongly opposed by SPEC.
The group joined a coalition that activelylobbied the chairman and every member of the Assembly Revenue and Taxation Committee in opposition to these two measures. SPEC also prepared opposition materials that were distributed electronically to all SPEC members.
In addition, opposition materials were distributed at the 2012 Western Pool & Spa Show in Long Beach urging members to contact their legislators in opposition to the bills. Lastly, SPEC lobbyists John and Erin Norwood met with both of the sponsoring legislators to argue for the exclusion of pool maintenance from these bills.
These visits paid a handsome return as Assembly Member Gatto eventually agreed to amend pool maintenance out of his legislation. Subsequent to this amendment, both bills were shelved for this year.
The good news is that, through the efforts of SPEC and other organizations, these two bills were defeated for 2012. The bad news is that this is the third year that public policymakers have seriously been discussing passage of some form of service tax. As California continues to look for more revenue to support state programs and the state continues to evolve into a service economy, pressure will likely continue to mount for the expansion of the state sales tax to services.
In other 2012 action, SPEC sponsored legislation to update the California Virginia Graham Baker Act statute and through this legislation, specifically allow for pools to be designed and built without requiring suction outlets on the bottom of the pool. AB 2114 by Assembly Members Cameron Smyth (R-Santa Clarita) and Jerry Hill (D-South San Francisco), replaces in current law references to “drains, and updates references to anti-entrapment performance standards for swimming pools and spas.
The purpose of the bill is to modernize building codes governing the construction of swimming pool and spas.
One of the principle issues addressed in AB 2114 is the elimination of the terms “drain and “main drain. The term “suction outlet will replace the terms “drain or “main drain everywhere these terms currently appear in statutes governing the construction and maintenance of pools in California.
The bill also eliminates the definition of “main drain in the code and adds a new definition of suction outlet as “a fitting or fixture that conducts water to the circulation pump. Additionally, AB 2114 makes it clear that a public pool can be constructed using alternative methods of conducting water to the circulation pump such as skimmers or perimeter overflow systems so long as such systems comply with the water turnover requirements contained in Title 24.
Also at the top of SPEC’s 2012 agenda was the underground economy, which continues to be a threat to many SPEC members who comply with state licensing, payroll, labor, insurance and consumer protection laws. Those contractors who skirt these laws unfairly compete against licensed contractors. In addition, it is the illegal contractors who often cause issues with consumers that are the basis of unwarranted legislation that can adversely affect legitimate businesses.
One of the issues cited by many in the pool industry for years, has to do with owner builders who hire so called “construction consultants to build or remodel their pools. The consultants have never been required to obtain a license from the Contractor State License Board or comply with regulatory laws contained in the Business and Professions Code.
AB 2237, by Assembly Member Monning (D-Santa Cruz), will remedy the situation beginning Jan. 1, 2013. AB 2237 was supported by SPEC and recently signed into law by Gov. Jerry Brown. This bill specifies that a consultant to a owner or builder for improvement contracts, oral or written, to repair, remodel, alter or add to residential property, must be licensed as a contractor.
This bill also specifies that a consultant who schedules subcontractors: reviews and makes recommendations on bids or the selection of contractors; who provides or oversees a bid; who arranges for and sets up work schedules for contractors and subcontractors; who maintains oversight of a construction project; who is required to be licensed by the Contractors’ State License Board as a contractor.
According to the CSLB, unlicensed contracting is part of California’s estimated annual $60 to $140 billion underground economy.
There were a number of other bills enacted this legislative session with the aim to empower regulatory agencies responsible for enforcing licensing, wage and labor laws to better coordinate and utilize available resources to fight against unlicensed and non-compliant contractors. For a complete list of these and other issues on the SPEC watch list, or visit the organization’s website online at www.calspec.org.