HomeMy WebLinkAboutItem 21 - Ordinance Amendment No. 2023-02: License Requirements of Contractors & Subcontractors Planning and Building Agency
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Item # 21
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
April 18, 2023
TOPIC: Ordinance Amendment No. 2023-02: License Requirements of Contractors and
Subcontractors
AGENDA TITLE
First Reading of an Ordinance to Amend Section 8-6 of the Santa Ana Municipal Code
(SAMC) Pertaining to License Requirements of Contractors and Subcontractors to
Include the Collection and Disclosure of Information Regarding Pending or Prior
Enforcement Actions for any State or Federal Labor Violations
RECOMMENDED ACTION
Conduct a first reading of Ordinance Amendment No. 2023-02 – An ordinance of the
City Council of the City of Santa Ana amending Section 8-6 of the Santa Ana Municipal
Code (SAMC) pertaining to license requirements of contractors and subcontractors to
include the collection and disclosure of information regarding pending or prior
enforcement actions for any state or federal labor violations.
EXECUTIVE SUMMARY AND DISCUSSION
At the regular meeting of March 7, 2023, the City Council discussed a goal of promoting
transparency pertaining to fair labor and business practices by contractors in the
construction industry. The City Council discussed and provided policy directions and
directed staff to draft an ordinance to achieve the following objectives:
1. Require the disclosure of information regarding pending or prior enforcement
actions for any state or federal labor violations in addition to information currently
being required pertaining licensing and insurance information; and
2. Apply the new disclosure requirement only to projects involving 20 or more
residential units or 20,000 or more square feet of commercial and industrial
development.
The existing Section 8-6 (License requirements of contractors and subcontractors) of
the SAMC requires the applicant of a building permit to provide verification of workers'
compensation insurance, state contractor license and license category, City business
license, and federal tax identification number for contractors and subcontractors working
on a construction project within the City. The draft ordinance amends these
requirements to include the disclosure of any pending or final adverse determinations
for state or federal labor code violations and any paid penalties to a government agency
related to the provisions of the California Labor Code within the prior five-year period.
The additional disclosures are applicable only to projects consisting of 20 or more
residential units, or 20,000 or more square feet of commercial or industrial development.
Ordinance Amendment No. 2023-02: License Requirements of Contractors and
Subcontractors
April 18, 2023
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As directed by the City Council, the draft ordinance establishes practical thresholds for
when the information must be provided to not burden small projects and a reasonable
applicable time period to promote and incentivize corrective labor practices and
compliance with labor regulations.
ENVIRONMENTAL IMPACT
Pursuant to the California Environmental Quality Act (“CEQA”) and the CEQA
Guidelines as amended, the adoption of this Ordinance is exempt from CEQA review
pursuant to sections 15060(c)(2) and 15060(c)(3) of the State CEQA Guidelines
because it will not result in a direct or reasonably foreseeable indirect physical change
in the environment, as there is no possibility it will have a significant effect on the
environment, and it is not a “project,” as defined in Section 15378 of the CEQA
Guidelines.
FISCAL IMPACT
There is no direct fiscal impact associated with this action.
EXHIBIT(S)
1. Ordinance
Submitted By: Minh Thai, Executive Director of Planning and Building Agency
Kathryn Downs, Executive Director of Finance and Management
Services
Approved By: Kristine Ridge, City Manager
Ordinance No. NS-XXX
Page 1 of 4
ORDINANCE NO. NS-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AMENDING SANTA ANA MUNICIPAL CODE
SECTION 8-6 RELATING TO LICENSE REQUIREMENTS
OF CONTRACTORS AND SUBCONTRACTORS
WHEREAS, Section 8-6 of the Santa Ana Municipal Code provides that no person
shall be issued a permit to perform work requiring a permit under the Code unless they
are a licensed contractor or a representative thereof, among other things; and
WHEREAS, Section 8-6 further provides that at the time of permit issuance, the
permit applicant must submit a list of all subcontractors and furnish for each subcontractor
verification of workers’ compensation insurance, state contractor license and license
category, city business license, and federal tax identification number; and
WHEREAS, the City wishes to expand the scope of these disclosures to include for
each subcontractor any pending or final determinations for state or federal labor code
violations within the prior 5 years, and make the same disclosures applicable only to
projects involving 20 or more residential dwelling units or 20,000 or more square feet of
commercial or industrial development; and
WHEREAS, these added disclosures are intended to recognize and promote the
value of fair labor and business practices in these types of projects.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA,
CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. The recitals above are each incorporated by reference and adopted
as findings by the City Council.
Section 2. Section 8-6 (License requirements of contractors and
subcontractors) of Article I of Chapter 8 of the Santa Ana Municipal Code (Buildings and
Structures) is hereby amended to read in its entirety as follows (new language underlined,
deleted language in strikeout for tracking purposes only).
Sec. 8-6. License requirements of contractors and subcontractors.
(a) No person shall be issued a permit to perform work requiring a permit under
this Code, unless they are:
(1) A licensed contractor;
(2) An employee, agent or authorized representative of a licensed contractor;
(3) A representative of an electronically subscribed service acting on behalf of
a licensed contractor; or
Ordinance No. NS-XXX
Page 2 of 4
(4) The property owner performing their own work;
(5) An employee of the owner, provided that the owner shows evidence of
workers’ compensation insurance required by state and city law, and their federal tax
identification number.
(b) A person applying for a permit under this code to perform work on a project
consisting of 20 or more residential dwelling units or 20,000 or more square feet of
commercial or industrial development shall submit the following information at the time of
permit issuance and prior to commencement of work:
(b) At the time of permit issuance, the applicant shall submit
(1) a list of all subcontractors and provide verification of each subcontractor's
workers' compensation insurance, state contractor license and license category, city
business license and federal tax identification number. No person shall contract or
subcontract construction work without a valid contractor's license pursuant to applicable
provisions of the state business and professions code.
(2) a disclosure of any pending or final determinations pertaining to state or
federal labor code violations and any penalties paid to a government agency related to
the provisions of the California Labor Code within the prior 5 years for all subcontractors.
(c) In the event that the applicant cannot provide a list of valid subcontractors
and the information required above upon permit application, the applicant shall provide to
the city, within a reasonable period of time after issuance of each permit but prior to
commencement of any work pursuant to said permit, all information required by
subsection (b). Failure to provide valid and current subcontractor listings prior to
commencing work shall result in one or more of the following:
(1) Issuance of a Stop Work Order; and
(12) Revocation of any permit issued by the city; and
(23) The permit applicant paying a penalty for default to the city in an amount
equal to the original permit fee for each violation in order to defray city costs of
enforcement of this section prior to the issuance of any new permit.
(d) The information required by subsection (b) shall be required at the time
when any new contractor or subcontractor is added to the permit.
(e) Any work performed prior to satisfying the requirements of this section shall
be deemed performed without the required permits.
Section 3. The City Council finds and determines that this Ordinance is not
subject to the California Environmental Quality Act (CEQA) pursuant to Sections
Ordinance No. NS-XXX
Page 3 of 4
15060(c)(2) and 15060(c)(3) of the State CEQA Guidelines because it will not result in a
direct or reasonably foreseeable indirect physical change in the environment, as there is
no possibility it will have a significant effect on the environment, and it is not a “project,”
as defined in Section 15378 of the CEQA Guidelines.
Section 4. If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this ordinance. The City Council of the City of Santa Ana hereby declares that
it would have adopted this ordinance and each section, subsection, sentence, clause,
phrase or portion thereof irrespective of the fact that any one or more sections,
subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Section 5. This Ordinance shall become effective thirty (30) days after its
adoption.
Section 6. The Clerk of the Council shall certify the adoption of this ordinance
and shall cause the same to be published as required by law.
ADOPTED this _______ day of ___________, 2023.
_________________________
Valerie Amezcua
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By:_________________________
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers ______________________________________
NOES: Councilmembers _______________________________________
ABSTAIN: Councilmembers _______________________________________
NOT PRESENT: Councilmembers _______________________________________
Ordinance No. NS-XXX
Page 4 of 4
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Jennifer L. Hall, City Clerk, do hereby attest to and certify the attached Ordinance No.
NS-____________ to be the original ordinance adopted by the City Council of the City of
Santa Ana on _______________, and that said ordinance was published in accordance
with the Charter of the City of Santa Ana.
Date: ________________ ____________________________________
City Clerk
City of Santa Ana