The CLASC will produce recommendations for legislation to be considered in the 2019 session that will address an array of issues impacting Arizona contractors.

Background

In its original form, SB 1271 sought to put an end to overreaching indemnity clauses that hold contractors responsible for the negligence of others. Existing law, which has been on the books for over 20 years, prohibits this unfair practice in public projects, and SB 1271 would have mirrored that law in private projects.

The introduced version of SB 1271 included a legislative intent clause that clearly explained the objective of the original bill, which has been included below for your reference.

SB 1271, however, was opposed by a number of organizations, including the Homebuilders Association of Central Arizona, Arizona Public Service Company, the Phoenix Chamber of Commerce, and the Intel Corporation.

In light of this opposition, the bill’s sponsor, Senator Karen Fann, and proponents of SB 1271 agreed to amend the bill to form the Construction Liability Apportionment Study Committee – or the CLASC.

The CLASC

The CLASC will be comprised of six legislators - three members of the Arizona State Senate and three members of the Arizona House of Representatives. The CLASC will hold public hearings over the summer, and is statutorily required to produce recommendations to the Governor, the President of the Senate and the Speaker of the House to address the following:

  • The use of an indemnity provision in construction contracts
  • The allocation of liability based on degrees of fault
  • The assignment of financial responsibility to negligent parties
  • The opportunity to address and remedy alleged construction defects prior to litigation
  • The frequency of construction defect litigation
  • The affordability of insurance costs associated with construction claims

SB 1271 also allows the CLASC to conduct fact-finding tours and take testimony from those who can assist the CLASC in producing its recommendations. The CLASC’s final recommendations must be submitted by December 15, 2018.

Solutions for Arizona Contractors - Large and Small

Through the CLASC’s efforts, Senator Karen Fann and proponents of SB 1271 will work to identify consensus solutions that will benefit Arizona contractors, large and small.

By closely studying the issues and working with stakeholders to solve these problems, we are confident that the CLASC will produce the recommendations necessary to help ensure fairness between general contractors and subcontractors, create an economic climate that promotes safety, foster the availability and affordability of insurance, and reduce frivolous construction claims.

We will continue to provide you with updates on the CLASC’s progress over the coming months. Please be sure to refer back to the Arizonan’s for Fair Contracting website for updates.

Resources

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