BILL NUMBER: SBX2 4	CHAPTERED
	BILL TEXT

	CHAPTER  2
	FILED WITH SECRETARY OF STATE  FEBRUARY 20, 2009
	APPROVED BY GOVERNOR  FEBRUARY 20, 2009
	PASSED THE SENATE  FEBRUARY 14, 2009
	PASSED THE ASSEMBLY  FEBRUARY 15, 2009
	AMENDED IN SENATE  FEBRUARY 14, 2009

INTRODUCED BY   Senator Cogdill

                        FEBRUARY 11, 2009

   An act to add Sections 14661.1 and 70391.7 to the Government Code,
to add and repeal Section 20688.6 of, and to add and repeal Chapter
6.5 (commencing with Section 6800) of Part 1 of Division 2 of, the
Public Contract Code, and to amend Section 143 of the Streets and
Highways Code, relating to public contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 4, Cogdill. Public contract: design-build: public private
partnerships.
   (1) Existing law designates the Judicial Council as the entity
having full responsibility, jurisdiction, control, and authority over
trial court facilities for which title is held by the state,
including the acquisition and development of facilities.
   Existing law requires the Department of Corrections and
Rehabilitation to design, construct, or renovate prison housing
units, prison support buildings, and programming space as specified.
   Existing law authorizes the Director of General Services, when
authorized by the Legislature, to use the design-build procurement
process for a specific project to contract and procure state office
facilities, other buildings, structures, and related facilities.
Existing law requires a bidder participating in the process to
provide written declarations, subject to misdemeanor penalties.
   This bill would also authorize the Director of General Services or
the Secretary of the Department of Corrections and Rehabilitation,
as appropriate, to use the design-build procurement process in
contracting and procuring a state office facility or prison facility,
and would authorize the Judicial Council to use that same process in
contracting and procuring a court facility, but would limit this
authorization to 5 total projects, to be approved by the Department
of Finance, as specified. The bill would require the Department of
General Services, the Department of Corrections and Rehabilitation,
and the Judicial Council to submit to the Joint Legislative Budget
Committee, before January 1, 2014, a report containing a description
of each public works project procured through the design-build
process, as specified. The bill would require a bidder participating
in the process to provide written declarations, subject to
misdemeanor penalties, and would thereby impose a state-mandated
local program.
   (2) Existing law sets forth requirements for the solicitation and
evaluation of bids and the awarding of contracts by public entities
for the erection, construction, alteration, repair, or improvement of
any public structure, building, road, or other public improvement.
Existing law also authorizes specified state agencies, cities, and
counties to implement alternative procedures for the awarding of
contracts on a design-build basis. Existing law, until January 1,
2011, authorizes transit operators to enter into a design-build
contract, as defined, according to specified procedures.
   This bill would, until January 1, 2014, allow certain state and
local transportation entities, if authorized by the California
Transportation Commission, to use a design-build process for
contracting on transportation projects, as specified. The bill would
require a transportation entity to implement, or contract with a
third-party to implement, a labor compliance program for design-build
projects, except as specified. The bill would also require these
transportation entities to report to the commission, and the
commission to submit a mid-term and a final report to the
Legislature, regarding the design-build process as specified. The
bill would establish a procedure for submitting bids that includes a
requirement that design-build entities provide a statement of
qualifications submitted to the transportation entity that is
verified under oath. Because a verification under oath is made under
penalty of perjury, the bill would, by requiring a verification,
create a new crime and thereby impose a state-mandated local program.

   (3) Under existing law, any work of grading, clearing, demolition,
or construction undertaken by a redevelopment agency is required to
be done by contract after competitive bidding if the cost of that
work exceeds a specified amount.
   This bill would, until January 1, 2016, authorize a redevelopment
agency, with the approval of its duly constituted board in a public
hearing, to enter into design-build contracts for projects, as
defined, in excess of $1,000,000, in accordance with specified
provisions. This bill would authorize up to 10 design-build
contracts, would require an agency to apply to the State Public Works
Board for authorization to enter a design-build contract, as
provided, and would require the State Public Works Board to notify
the Legislative Analyst's Office when 10 projects have been approved.
This bill would also require an agency using the design-build method
to submit a report to the Legislative Analyst's Office, as provided,
and for the Legislative Analyst to report to the Legislature before
January 1, 2015, on the agency's use of the design-build method, as
provided.
   This bill would require specified information to be verified under
oath, thus imposing a state-mandated local program by expanding the
scope of existing crime.
   (4) Existing law authorizes the Department of Transportation and
regional transportation agencies, as defined, until January 1, 2012,
to enter into comprehensive development lease agreements with public
and private entities, or consortia of those entities, for certain
transportation projects that may charge certain users of those
projects tolls and user fees, subject to various terms and
requirements. Existing law limits the number of projects authorized
pursuant to these provisions to 2 in northern California and 2 in
southern California.
   This bill would extend the authorization for these agreements to
January 1, 2017, and would delete the restriction on the number of
projects that may be undertaken pursuant to these provisions. The
bill would require the projects to be primarily designed to achieve
improved mobility, improved operations or safety, and quantifiable
air quality benefits.
   (5) Existing law requires that the negotiated lease agreements be
submitted to the Legislature for approval or rejection. Under
existing law, the Legislature has 60 legislative days to act after
submittal of the agreement and the agreement is deemed approved
unless both houses of the Legislature concur in the passage of a
resolution rejecting the agreement. Existing law prohibits the
Legislature from amending these lease agreements.
   The bill would eliminate that prohibition and the provision
requiring approval or rejection by the Legislature. The bill would
require that all lease agreements first be submitted to the
California Transportation Commission for approval, then to the
Legislature and the Public Infrastructure Advisory Commission, as
defined, for review, as specified. The bill would also require the
Public Infrastructure Advisory Commission to perform specified acts
and would authorize that commission to charge the department and
regional transportation agencies a fee for specified services.
   (6) Existing law authorizes the department and regional
transportation agencies to utilize various procurement approaches,
including, among other things, acceptance of unsolicited proposals,
as specified.
   This bill would prohibit the department or a regional
transportation agency from awarding a contract to an unsolicited
bidder without receiving at least one other responsible bid.
   (7) Under existing law, for these projects, tolls and user fees
may not be charged to noncommercial vehicles with 3 or fewer axles.
   This bill would eliminate that prohibition.
   (8) Existing law imposes various contract requirements for these
projects, including permitting compensation for a leaseholder for
losses in toll or fee revenues in certain instances if caused by the
construction of supplemental transportation projects, but prohibits
the compensation to exceed the reduction in revenues.
   This bill would prohibit that compensation from exceeding the
difference between the reduction in revenues and the amount necessary
to cover the costs of debt service, as specified. The bill would
additionally require the agreements to include an indemnity
agreement, as specified, and to authorize the contracting entity or
lessee to utilize the design-build method of procurement for
transportation projects, subject to specified conditions. The bill
would also require contracting entities or lessees to have specified
qualifications.
   The bill would authorize the department or the regional
transportation agency, when evaluating a proposal submitted by a
contracting entity or lessee, to award a contract on the basis of the
lowest bid or best value, as defined.
   The bill would provide that the Department of Transportation is
the responsible agency for the performance of certain tasks and the
preparation of certain documents, relative to projects on the state
highway system, where a regional transportation agency is otherwise
the sponsor of the project. The bill would state that the department
may perform those functions with department employees or with
consultants contracted by the department.
   (9) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 14661.1 is added to the Government Code, to
read:
   14661.1.  (a) For purposes of this section, the definitions in
subdivision (a) of Section 13332.19 shall apply. For purposes of
subdivision (a) of Section 13332.19, references to the Department of
General Services shall be deemed to be references to the Department
of General Services or the Department of Corrections and
Rehabilitation, as applicable.
   (b) Notwithstanding any provision of the Public Contract Code or
any other provision of law, when the Legislature appropriates funds
for a specific project, or for any project using funds appropriated
pursuant to Chapter 3.2.1 (commencing with Section 15819.40) or 3.2.2
(commencing with Section 15819.41) of Part 10b of this division, the
Director of General Services or the Secretary of the Department of
Corrections and Rehabilitation, as appropriate, may contract and
procure state office facilities and prison facilities pursuant to
this section.
   (c) Prior to contracting with a design-build entity for the
procurement of a state office facility or prison facility under this
section, the Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation shall:
   (1) Prepare a program setting forth the performance criteria for
the design-build project. The performance criteria shall be prepared
by a design professional duly licensed and registered in the State of
California.
   (2) (A) Establish a competitive prequalification and selection
process for design-build entities, including any subcontractors
listed at the time of bid, that clearly specifies the
prequalification criteria, and states the manner in which the winning
design-build entity will be selected.
   (B) Prequalification shall be limited to consideration of all of
the following criteria:
   (i) Possession of all required licenses, registration, and
credentials in good standing that are required to design and
construct the project.
   (ii) Submission of evidence that establishes that the design-build
entity members have completed, or demonstrated the capability to
complete, projects of similar size, scope, or complexity, and that
proposed key personnel have sufficient experience and training to
competently manage and complete the design and construction of the
project.
   (iii) Submission of a proposed project management plan that
establishes that the design-build entity has the experience,
competence, and capacity needed to effectively complete the project.
   (iv) Submission of evidence that establishes that the design-build
entity has the capacity to obtain all required payment and
performance bonding, liability insurance, and errors and omissions
insurance, as well as a financial statement that assures the
Department of General Services or the Department of Corrections and
Rehabilitation that the design-build entity has the capacity to
complete the project.
   (v) Provision of a declaration certifying that applying members of
the design-build entity have not had a surety company finish work on
any project within the last five years.
   (vi) Provision of information and a declaration providing detail
concerning all of the following:
   (I) Any construction or design claim or litigation totaling more
than five hundred thousand dollars ($500,000) or 5 percent of the
annual value of work performed, whichever is less, settled against
any member of the design-build entity over the last five years.
   (II) Serious violations of the California Occupational Safety and
Health Act of 1973, as provided in Part 1 (commencing with Section
6300) of Division 5 of the Labor Code, settled against any member of
the design-build entity.
   (III) Violations of federal or state law, including, but not
limited to, those laws governing the payment of wages, benefits, or
personal income tax withholding, of Federal Insurance Contributions
Act (FICA) withholding requirements, state disability insurance
withholding, or unemployment insurance payment requirements, settled
against any member of the design-build entity over the last five
years. For purposes of this subclause, only violations by a
design-build member as an employer shall be deemed applicable, unless
it is shown that the design-build entity member, in his or her
capacity as an employer, had knowledge of his or her subcontractor's
violations or failed to comply with the conditions set forth in
subdivision (b) of Section 1775 of the Labor Code.
   (IV) Information required by Section 10162 of the Public Contract
Code.
   (V) Violations of the Contractors' State License Law (Chapter 9
(commencing with Section 7000) of Division 3 of the Business and
Professions Code), excluding alleged violations or complaints.
   (VI) Any conviction of any member of the design-build entity of
submitting a false or fraudulent claim to a public agency over the
last five years.
   (vii) Provision of a declaration that the design-build entity will
comply with all other provisions of law applicable to the project,
including, but not limited to, the requirements of Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the Labor
Code.
   (C) The Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation, when requested by the
design-build entity, shall hold in confidence any information
required by clauses (i) to (vi), inclusive, of subparagraph (B).
   (D) Any declaration required under subparagraph (B) shall state
that reasonable diligence has been used in its preparation and that
it is true and complete to the best of the signer's knowledge. A
person who certifies as true any material matter that he or she knows
to be false is guilty of a misdemeanor and shall be punished by not
more than one year in a county jail, by a fine of not more than five
thousand dollars ($5,000), or by both the fine and imprisonment.
   (3) (A) Determine, as he or she deems in the best interests of the
state, which of the following methods listed in subparagraph (B)
will be used as the process for the winning design-build entity. He
or she shall provide a notification to the State Public Works Board,
regarding the method selected for determining the winning
design-build entity, at least 30 days prior to publicizing the
design-build solicitation package.
   (B) The Director of General Services or the Secretary of the
Department of Corrections and Rehabilitation shall make his or her
determination by choosing one of the following methods:
   (i) A design-build competition based upon performance, price, and
other criteria set forth by the Department of General Services or the
Department of Corrections and Rehabilitation in the design-build
solicitation package. The Department of General Services or the
Department of Corrections and Rehabilitation shall establish
technical criteria and methodology, including price, to evaluate
proposals and shall describe the criteria and methodology in the
design-build solicitation package. Award shall be made to the
design-build entity whose proposal is judged as providing the best
value in meeting the interests of the Department of General Services
or the Department of Corrections and Rehabilitation and meeting the
objectives of the project. A project with an approved budget of ten
million dollars ($10,000,000) or more may be awarded pursuant to this
clause.
   (ii) A design-build competition based upon performance and other
criteria set forth by the Department of General Services or the
Department of Corrections and Rehabilitation in the design-build
solicitation package. Criteria used in this evaluation of proposals
may include, but need not be limited to, items such as proposed
design approach, life-cycle costs, project features, and functions.
However, any criteria and methods used to evaluate proposals shall be
limited to those contained in the design-build solicitation package.
Award shall be made to the design-build entity whose proposal is
judged as providing the best value, for the lowest price, meeting the
interests of the Department of General Services or the Department of
Corrections and Rehabilitation and meeting the objectives of the
project. A project with an approved budget of ten million dollars
($10,000,000) or more may be awarded pursuant to this clause.
   (iii) A design-build competition based upon program requirements
and a detailed scope of work, including any performance criteria and
concept drawings set forth by the Department of General Services or
the Department of Corrections and Rehabilitation in the design-build
solicitation package. Award shall be made on the basis of the lowest
responsible bid. A project with an approved budget of two hundred
fifty thousand dollars ($250,000) or more may be awarded pursuant to
this clause.
   (4) For purposes of this subdivision, the following definitions
shall apply:
   (A) "Best interest of the state" means a design-build process that
is projected by the Director of General Services or the Secretary of
the Department of Corrections and Rehabilitation to reduce the
project delivery schedule and total cost of a project while
maintaining a high level of quality workmanship and materials, when
compared to the traditional design-bid-build process.
   (B) "Best value" means a value determined by objective criteria
that may include, but are not limited to, price, features, functions,
life-cycle costs, experience, and other criteria deemed appropriate
by the Department of General Services or the Department of
Corrections and Rehabilitation.
   (d) The Legislature recognizes that the design-build entity is
charged with performing both design and construction. Because a
design-build contract may be awarded prior to the completion of the
design, it is often impracticable for the design-build entity to list
all subcontractors at the time of the award. As a result, the
subcontractor listing requirements contained in Chapter 4 (commencing
with Section 4100) of Part 1 of Division 2 of the Public Contract
Code can create a conflict with the implementation of the
design-build process by requiring all subcontractors to be listed at
a time when a sufficient set of plans shall not be available. It is
the intent of the Legislature to establish a clear process for the
selection and award of subcontracts entered into pursuant to this
section in a manner that retains protection for subcontractors while
enabling design-build projects to be administered in an efficient
fashion. Therefore, all of the following requirements shall apply to
subcontractors, licensed pursuant to Chapter 9 (commencing with
Section 7000) of Division 3 of the Business and Professions Code,
that are employed on design-build projects undertaken pursuant to
this section:
   (1) The Department of General Services and the Department of
Corrections and Rehabilitation, in each design-build solicitation
package, may identify types of subcontractors, by subcontractor
license classification, that will be listed by the design-build
entity at the time of the bid. In selecting the subcontractors that
will be listed by the design-build entity, the Department of General
Services and the Department of Corrections and Rehabilitation shall
limit the identification to only those license classifications deemed
essential for proper completion of the project. In no event,
however, may the Department of General Services or the Department of
Corrections and Rehabilitation specify more than five licensed
subcontractor classifications. In addition, at its discretion, the
design-build entity may list an additional two subcontractors,
identified by subcontractor license classification, that will perform
design or construction work, or both, on the project. In no event
shall the design-build entity list at the time of bid a total number
of subcontractors that will perform design or construction work, or
both, in a total of more than seven subcontractor license
classifications on a project. All subcontractors that are listed at
the time of bid shall be afforded all of the protection contained in
Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of
the Public Contract Code. All subcontracts that were not listed by
the design-build entity at the time of bid shall be awarded in
accordance with paragraph (2).
   (2) All subcontracts that were not to be performed by the
design-build entity in accordance with paragraph (1) shall be
competitively bid and awarded by the design-build entity, in
accordance with the design-build process set forth by the Department
of General Services or the Department of Corrections and
Rehabilitation in the design-build solicitation package. The
design-build entity shall do all of the following:
   (A) Provide public notice of the availability of work to be
subcontracted in accordance with Section 10140 of the Public Contract
Code.
   (B) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with Section 10141 of the Public
Contract Code.
   (C) As authorized by the Department of General Services or the
Department of Corrections and Rehabilitation, establish reasonable
prequalification criteria and standards, limited in scope to those
detailed in paragraph (2) of subdivision (c).
   (D) Provide that the subcontracted work shall be awarded to the
lowest responsible bidder.
   (e) This section shall not be construed and is not intended to
extend or limit the authority specified in Section 19130.
   (f) Any design-build entity that is selected to design and
construct a project pursuant to this section shall possess or obtain
sufficient bonding consistent with applicable provisions of the
Public Contract Code. Nothing in this section shall prohibit a
general or engineering contractor from being designated the lead
entity on a design-build entity for the purposes of purchasing
necessary bonding to cover the activities of the design-build entity.

   (g) Any payment or performance bond written for the purposes of
this section shall use a bond form developed by the Department of
General Services or the Department of Corrections and Rehabilitation.
In developing the bond form, the Department of General Services or
the Department of Correction and Rehabilitation shall consult with
the surety industry to achieve a bond form that is consistent with
surety industry standards, while protecting the interests of the
state.
   (h) The Department of General Services or the Department of
Corrections and Rehabilitation, as appropriate, shall each submit to
the Joint Legislative Budget Committee, before January 1, 2014, a
report containing a description of each public works project procured
by that department through the design-build process described in
this section that is completed after January 1, 2009, and before
December 1, 2013. The report shall include, but shall not be limited
to, all of the following information:
   (1) The type of project.
   (2) The gross square footage of the project.
   (3) The design-build entity that was awarded the project.
   (4) The estimated and actual project costs.
   (5) An assessment of the prequalification process and criteria.
   (6) An assessment of the effect of any retention on the project
made under the law.
   (7) A description of the method used to award the contract. If the
best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor and
an assessment of the effectiveness of the methodology.
   (i) The authority provided under this section shall be in addition
to the authority provided to the Department of General Services
pursuant to Section 4 of Chapter 252 of the Statutes of 1998, as
amended by Section 3 of Chapter 154 of the Statutes of 2007. The
authority under this section and Section 70391.7 shall apply to a
total of not more than five state office facilities, prison
facilities, or court facilities, which shall be determined pursuant
to this subdivision.
   (1) In order to enter into a contract utilizing the procurement
method authorized under this section, the Director of General
Services or the Secretary of the Department of Corrections and
Rehabilitation shall submit a request to the Department of Finance.
   (2) The Department of Finance shall make a determination whether
to approve or deny a request made pursuant to paragraph (1) if the
design-build project requested will not exceed the five facilities
maximum set forth in this section and Section 70391.7.
   (3) After receiving notification that the Department of Finance
has approved the request and that the Legislature has appropriated
funds for a specific project, the director or secretary may enter
into a design-build contract under this section.
   (j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available under the law.
  SEC. 2.  Section 70391.7 is added to the Government Code, to read:
   70391.7.  (a) For purposes of this section, the definitions in
subdivision (a) of Section 13332.19 shall apply. For purposes of
subdivision (a) of Section 13332.19, references to the Department of
General Services shall be deemed to be references to the Judicial
Council.
   (b) Notwithstanding any provision of the Public Contract Code or
any other law, when the Legislature appropriates funds for a specific
project, the Judicial Council may contract and procure court
facilities pursuant to this section.
   (c) Prior to contracting with a design-build entity for the
procurement of a court facility under this section, the Judicial
Council shall:
   (1) Prepare a program setting forth the performance criteria for
the design-build project. The performance criteria shall be prepared
by a design professional duly licensed and registered in the State of
California.
   (2) (A) Establish a competitive prequalification and selection
process for design-build entities, including any subcontractors
listed at the time of bid, that clearly specifies the
prequalification criteria, and states the manner in which the winning
design-build entity will be selected.
   (B) Prequalification shall be limited to consideration of all of
the following criteria:
   (i) Possession of all required licenses, registration, and
credentials in good standing that are required to design and
construct the project.
   (ii) Submission of evidence that establishes that the design-build
entity members have completed, or demonstrated the capability to
complete, projects of similar size, scope, or complexity, and that
proposed key personnel have sufficient experience and training to
competently manage and complete the design and construction of the
project.
   (iii) Submission of a proposed project management plan that
establishes that the design-build entity has the experience,
competence, and capacity needed to effectively complete the project.
   (iv) Submission of evidence that establishes that the design-build
entity has the capacity to obtain all required payment and
performance bonding, liability insurance, and errors and omissions
insurance, as well as a financial statement that assures the Judicial
Council that the design-build entity has the capacity to complete
the project.
   (v) Provision of a declaration certifying that applying members of
the design-build entity have not had a surety company finish work on
any project within the last five years.
   (vi) Provision of information and a declaration providing detail
concerning all of the following:
   (I) Any construction or design claim or litigation totaling more
than five hundred thousand dollars ($500,000) or 5 percent of the
annual value of work performed, whichever is less, settled against
any member of the design-build entity over the last five years.
   (II) Serious violations of the California Occupational Safety and
Health Act of 1973, as provided in Part 1 (commencing with Section
6300) of Division 5 of the Labor Code, settled against any member of
the design-build entity.
   (III) Violations of federal or state law, including, but not
limited to, those laws governing the payment of wages, benefits, or
personal income tax withholding, or of Federal Insurance
Contributions Act (FICA) withholding requirements, state disability
insurance withholding, or unemployment insurance payment
requirements, settled against any member of the design-build entity
over the last five years. For purposes of this subclause, only
violations by a design-build member as an employer shall be deemed
applicable, unless it is shown that the design-build entity member,
in his or her capacity as an employer, had knowledge of his or her
subcontractor's violations or failed to comply with the conditions
set forth in subdivision (b) of Section 1775 of the Labor Code.
   (IV) Information required by Section 10162 of the Public Contract
Code.
   (V) Violations of the Contractors' State License Law (Chapter 9
(commencing with Section 7000) of Division 3 of the Business and
Professions Code), excluding alleged violations or complaints.
   (VI) Any conviction of any member of the design-build entity of
submitting a false or fraudulent claim to a public agency over the
last five years.
   (vii) Provision of a declaration that the design-build entity will
comply with all other provisions of law applicable to the project,
including, but not limited to, the requirements of Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the Labor
Code.
   (C) The Judicial Council, when requested by the design-build
entity, shall hold in confidence any information required by clauses
(i) to (vi), inclusive, of subparagraph (B).
   (D) Any declaration required under subparagraph (B) shall state
that reasonable diligence has been used in its preparation and that
it is true and complete to the best of the signer's knowledge. A
person who certifies as true any material matter that he or she knows
to be false is guilty of a misdemeanor and shall be punished by not
more than one year in a county jail, by a fine of not more than five
thousand dollars ($5,000), or by both the fine and imprisonment.
   (3) (A) Determine, as the Judicial Council deems in the best
interests of the state, which of the following methods listed in
subparagraph (B) will be used as the process for the winning
design-build entity. The Judicial Council shall provide a
notification to the State Public Works Board, regarding the method
selected for determining the winning design-build entity, at least 30
days prior to publicizing the design-build solicitation package.
   (B) The Judicial Council shall make its determination by choosing
one of the following methods:
   (i) A design-build competition based upon performance, price, and
other criteria set forth by the Judicial Council in the design-build
solicitation package. The Judicial Council shall establish technical
criteria and methodology, including price, to evaluate proposals and
shall describe the criteria and methodology in the design-build
solicitation package. Award shall be made to the design-build entity
whose proposal is judged as providing the best value in meeting the
interests of the Judicial Council and meeting the objectives of the
project. A project with an approved budget of ten million dollars
($10,000,000) or more may be awarded pursuant to this clause.
   (ii) A design-build competition based upon performance and other
criteria set forth by the Judicial Council in the design-build
solicitation package. Criteria used in this evaluation of proposals
may include, but need not be limited to, items such as proposed
design approach, life-cycle costs, project features, and functions.
However, any criteria and methods used to evaluate proposals shall be
limited to those contained in the design-build solicitation package.
Award shall be made to the design-build entity whose proposal is
judged as providing the best value, for the lowest price, meeting the
interests of the Judicial Council and meeting the objectives of the
project. A project with an approved budget of ten million dollars
($10,000,000) or more may be awarded pursuant to this clause.
   (iii) A design-build competition based upon program requirements
and a detailed scope of work, including any performance criteria and
concept drawings set forth by the Judicial Council in the
design-build solicitation package. Award shall be made on the basis
of the lowest responsible bid. A project with an approved budget of
two hundred fifty thousand dollars ($250,000) or more may be awarded
pursuant to this clause.
   (4) For purposes of this subdivision, the following definitions
shall apply:
   (A) "Best interest of the state" means a design-build process that
is projected by the Judicial Council to reduce the project delivery
schedule and total cost of a project while maintaining a high level
of quality workmanship and materials, when compared to the
traditional design-bid-build process.
   (B) "Best value" means a value determined by objective criteria
that may include, but are not limited to, price, features, functions,
life-cycle costs, experience, and other criteria deemed appropriate
by the Judicial Council.
   (d) The Legislature recognizes that the design-build entity is
charged with performing both design and construction. Because a
design-build contract may be awarded prior to the completion of the
design, it is often impracticable for the design-build entity to list
all subcontractors at the time of the award. As a result, the
subcontractor listing requirements contained in Chapter 4 (commencing
with Section 4100) of Part 1 of Division 2 of the Public Contract
Code can create a conflict with the implementation of the
design-build process by requiring all subcontractors to be listed at
a time when a sufficient set of plans may not be available. It is the
intent of the Legislature to establish a clear process for the
selection and award of subcontracts entered into pursuant to this
section in a manner that retains protection for subcontractors while
enabling design-build projects to be administered in an efficient
fashion. Therefore, all of the following requirements shall apply to
subcontractors, licensed pursuant to Chapter 9 (commencing with
Section 7000) of Division 3 of the Business and Professions Code,
that are employed on design-build projects undertaken pursuant to
this section:
   (1) The Judicial Council, in each design-build solicitation
package, may identify types of subcontractors, by subcontractor
license classification, that will be listed by the design-build
entity at the time of the bid. In selecting the subcontractors that
will be listed by the design-build entity, the Judicial Council shall
limit the identification to only those license classifications
deemed essential for proper completion of the project. In no event,
however,                                           may the Judicial
Council specify more than five licensed subcontractor
classifications. In addition, at its discretion, the design-build
entity may list an additional two subcontractors, identified by
subcontractor license classification, that will perform design or
construction work, or both, on the project. In no event shall the
design-build entity list at the time of bid a total number of
subcontractors that will perform design or construction work, or
both, in a total of more than seven subcontractor license
classifications on a project. All subcontractors that are listed at
the time of bid shall be afforded all of the protection contained in
Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of
the Public Contract Code. All subcontracts that were not listed by
the design-build entity at the time of bid shall be awarded in
accordance with paragraph (2).
   (2) All subcontracts that were not to be performed by the
design-build entity in accordance with paragraph (1) shall be
competitively bid and awarded by the design-build entity, in
accordance with the design-build process set forth by the Judicial
Council in the design-build solicitation package. The design-build
entity shall do all of the following:
   (A) Provide public notice of the availability of work to be
subcontracted in accordance with Section 10140 of the Public Contract
Code.
   (B) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with Section 10141 of the Public
Contract Code.
   (C) As authorized by the Judicial Council, establish reasonable
prequalification criteria and standards, limited in scope to those
detailed in paragraph (2) of subdivision (c).
   (D) Provide that the subcontracted work shall be awarded to the
lowest responsible bidder.
   (e) This section shall not be construed and is not intended to
extend or limit the authority specified in Section 19130.
   (f) Any design-build entity that is selected to design and
construct a project pursuant to this section shall possess or obtain
sufficient bonding consistent with applicable provisions of the
Public Contract Code. Nothing in this section shall prohibit a
general or engineering contractor from being designated the lead
entity on a design-build entity for the purposes of purchasing
necessary bonding to cover the activities of the design-build entity.

   (g) Any payment or performance bond written for the purposes of
this section shall use a bond form developed by the Judicial Council.
In developing the bond form, the Judicial Council shall consult with
the surety industry to achieve a bond form that is consistent with
surety industry standards, while protecting the interests of the
state.
   (h) The Judicial Council shall submit to the Joint Legislative
Budget Committee, before January 1, 2014, a report containing a
description of each public works project procured through the
design-build process described in this section that is completed
after January 1, 2009, and before December 1, 2013. The report shall
include, but shall not be limited to, all of the following
information:
   (1) The type of project.
   (2) The gross square footage of the project.
   (3) The design-build entity that was awarded the project.
   (4) The estimated and actual project costs.
   (5) An assessment of the prequalification process and criteria.
   (6) An assessment of the effect of any retention on the project
made under the law.
   (7) A description of the method used to award the contract. If the
best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor and
an assessment of the effectiveness of the methodology.
   (i) The authority under this section and Section 14661.1 shall
apply to a total of not more than five state office facilities,
prison facilities, or court facilities, which shall be determined
pursuant to this subdivision.
   (1) In order to enter into a contract utilizing the procurement
method authorized under this section, the Judicial Council shall
submit a request to the Department of Finance.
   (2) The Department of Finance shall make a determination whether
to approve or deny a request made pursuant to paragraph (1) if the
design-build project requested will not exceed the five facilities
maximum set forth in this section and Section 14661.1.
   (3) After receiving notification that the Department of Finance
has approved the request and that the Legislature has appropriated
funds for a specific project, the Judicial Council may enter into a
design-build contract under this section.
   (j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available under the law.
  SEC. 3.  Chapter 6.5 (commencing with Section 6800) is added to
Part 1 of Division 2 of the Public Contract Code, to read:
      CHAPTER 6.5.  THE DESIGN-BUILD DEMONSTRATION PROGRAM


   6800.  The Legislature hereby finds and declares all of the
following:
   The design-build method of procurement authorized under this
chapter should be evaluated for the purposes of exploring whether the
potential exists for reduced project costs, expedited project
completion, or design features that are not achievable through the
traditional design-bid-build method. A demonstration program will
allow for a careful examination of the benefits and challenges of
design-build contracting on a limited number of projects. This
chapter shall not be deemed to provide a preference for the
design-build method over other procurement methodologies.
   6801.  For purposes of this chapter, the following definitions
apply:
   (a) "Best value" means a value determined by objective criteria,
including, but not limited to, price, features, functions, life cycle
costs, and other criteria deemed appropriate by the transportation
entity.
   (b) "Commission" means the California Transportation Commission.
   (c) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
   (d) "Design-build entity" means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.
   (e) "Design-build team" means the design-build entity itself and
the individuals and other entities identified by the design-build
entity as members of its team.
   (f) "Department" means the Department of Transportation as
established under Part 5 (commencing with Section 14000) of Division
3 of the Government Code.
   (g) "Local transportation entity" means a transportation authority
designated pursuant to Division 19 (commencing with Section 180000)
of the Public Utilities Code, any consolidated agency created
pursuant to Chapter 3 (commencing with Section 132350) of Division
12.7 of the Public Utilities Code, the Santa Clara Valley
Transportation Authority established under Part 12 (commencing with
Section 100000) of Division 10 of the Public Utilities Code, and any
other local or regional transportation entity that is designated by
statute as a regional transportation agency.
   (h) "Transportation entity" means the department or a local
transportation entity.
   6802.  (a) Subject to the limitations of this chapter, a local
transportation entity, if authorized by the commission, may utilize
the design-build method of procurement for up to five projects that
may be for local street or road, bridge, tunnel, or public transit
projects within the jurisdiction of the entity.
   (b) Subject to the limitations of this chapter, the department, if
authorized by the commission, may utilize the design-build method of
procurement for up to 10 state highway, bridge, or tunnel projects.
   6803.  (a) Only 15 design-build projects shall be authorized under
this chapter. The projects selected shall vary in size, type, and
geographical location.
   (b) The commission shall determine whether a transportation entity
may award a design-build contract based on lowest responsible bid or
best value. The commission shall balance the number of
transportation entities that may use the low bid and best value
selection methods in order to ensure that the number of design-build
contracts awarded will enable the commission to determine the costs
and benefits of using each method.
   (c) In order to be eligible for consideration as one of the 15
design-build projects authorized under this chapter, the proposed
project shall be subject to the existing process under the state
transportation improvement program (Chapter 2 (commencing with
Section 14520) of Part 5.3 of Division 3 of Title 2 of the Government
Code), the Highway Safety, Traffic Reduction, Air Quality, and Port
Security Bond Act of 2006 (Chapter 12.49 (commencing with Section
8879.20) of Division 1 of Title 2 of the Government Code), the
traffic congestion relief program (Chapter 4.5 (commencing with
Section 14556) of Part 5.3 of Division 3 of Title 2 of the Government
Code), or the state highway operations and protection program
established pursuant to Section 14526.5 of the Government Code.
   (d) The commission shall establish a peer review committee to
conduct an evaluation of the 15 projects selected to utilize the
design-build method of procurement.
   (e) The commission shall develop guidelines for a standard
organizational conflict-of-interest policy, consistent with
applicable law, regarding the ability of a person or entity, that
performs services for the transportation entity relating to the
solicitation of a design-build project, to submit a proposal as a
design-build entity, or to join a design-build team. This
conflict-of-interest policy shall apply to each transportation entity
entering into design-build contracts authorized under this chapter.
   6804.  (a) For contracts awarded prior to the effective date of
either the regulations adopted by the Department of Industrial
Relations pursuant to subdivision (b) of Section 1771.55 of the Labor
Code or the fees established by the department pursuant to
subdivision (b), a transportation entity authorized to use the
design-build method of procurement shall implement a labor compliance
program, as described in Section 1771.5 of the Labor Code, or it
shall contract with a third party to implement, on the transportation
entity's behalf, a labor compliance program subject to that statute.
This requirement does not apply to a project where the
transportation entity or design-build entity has entered into any
collective bargaining agreement or agreements that bind all of the
contractors performing work on the projects.
   (b) For contracts awarded on or after the effective date of both
the regulations adopted by the Department of Industrial Relations
pursuant to subdivision (b) of Section 1771.55 of the Labor Code and
the fees established by the department pursuant to this subdivision,
the transportation entity shall pay a fee to the department, in an
amount that the department shall establish, and as it may from time
to time amend, sufficient to support the department's costs in
ensuring compliance with and enforcing prevailing wage requirements
on the project, and labor compliance enforcement as set forth in
subdivision (b) of Section 1771.55 of the Labor Code. All fees
collected pursuant to this subdivision shall be deposited in the
State Public Works Enforcement Fund, created by 1771.3 of the Labor
Code, and shall be used only for enforcement of prevailing wage
requirements on those projects.
   (c) The Department of Industrial Relations may waive the fee set
forth in subdivision (b) for a transportation entity that has
previously been granted approval by the director to initiate and
operate a labor compliance program on its projects, and that requests
to continue to operate the labor compliance program on its projects
in lieu of labor compliance by the department pursuant to subdivision
(b) of Section 1771.55 of the Labor Code. This fee shall not be
waived for a transportation entity that contracts with a third party
to initiate and enforce labor compliance programs on the
transportation entity's projects.
   6805.  The procurement process for the design-build projects shall
progress as follows:
   (a) The transportation entity shall prepare a set of documents
setting forth the scope and estimated price of the project. The
documents may include, but need not be limited to, the size, type,
and desired design character of the project, performance
specifications covering the quality of materials, equipment,
workmanship, preliminary plans, and any other information deemed
necessary to describe adequately the transportation entity's needs.
The performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.
   (b) Based on the documents prepared as described in subdivision
(a), the transportation entity shall prepare a request for proposals
that invites interested parties to submit competitive sealed
proposals in the manner prescribed by the transportation entity. The
request for proposals shall include, but need not be limited to, the
following elements:
   (1) Identification of the basic scope and needs of the project or
contract, the estimated cost of the project, the methodology that
will be used by the transportation entity to evaluate proposals,
whether the contract will be awarded on the basis of the lowest
responsible bid or on best value, and any other information deemed
necessary by the transportation entity to inform interested parties
of the contracting opportunity.
   (2) Significant factors that the transportation entity reasonably
expects to consider in evaluating proposals, including, but not
limited to, cost or price and all nonprice-related factors.
   (3) The relative importance or the weight assigned to each of the
factors identified in the request for proposals.
   (4) For transportation entities authorized to utilize best value
as a selection method, the transportation entity reserves the right
to request proposal revisions and hold discussions and negotiations
with responsive bidders and shall so specify in the request for
proposals and shall publish separately or incorporate into the
request for proposals applicable rules and procedures to be observed
by the transportation entity to ensure that any discussions or
negotiations are conducted in good faith.
   (c) Based on the documents prepared under subdivision (a), the
transportation entity shall prepare and issue a request for
qualifications in order to prequalify the design-build entities whose
proposals shall be evaluated for final selection. The request for
qualifications shall include, but need not be limited to, the
following elements:
   (1) Identification of the basic scope and needs of the project or
contract, the expected cost range, the methodology that will be used
by the transportation entity to evaluate proposals, the procedure for
final selection of the design-build entity, and any other
information deemed necessary by the transportation entity to inform
interested parties of the contracting opportunity.
   (2) (A) Significant factors that the transportation entity
reasonably expects to consider in evaluating qualifications,
including technical design and construction expertise, skilled labor
force availability, and all other nonprice-related factors.
   (B) For purposes of subparagraph (A), skilled labor force
availability shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the California
Apprenticeship Council, that has graduated at least one apprentice in
each of the preceding five years. This graduation requirement shall
not apply to programs providing apprenticeship training for any craft
that was first deemed by the Department of Labor and the Department
of Industrial Relations to be an apprenticeable craft within the five
years prior to the effective date of this article.
   (3) A standard form request for statements of qualifications
prepared by the transportation entity. In preparing the standard
form, the transportation entity may consult with the construction
industry, the building trades and surety industry, and other public
agencies interested in using the authorization provided by this
chapter. The standard form shall require information including, but
not limited to, all of the following:
   (A) If the design-build entity is a partnership, limited
partnership, joint venture, or other association, a listing of all of
the partners, general partners, or association members known at the
time of statement of qualification submission who will participate in
the design-build contract.
   (B) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the design
and construction of the project, and a financial statement that
assures the transportation entity that the design-build entity has
the capacity to complete the project.
   (C) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to,
information on the revocation or suspension of any license,
credential, or registration.
   (D) Evidence that establishes that the design-build entity has the
capacity to obtain all required payment and performance bonding,
liability insurance, and errors and omissions insurance.
   (E) Information concerning workers' compensation experience
history and a worker safety program.
   (F) A full disclosure regarding all of the following that are
applicable:
   (i) Any serious or willful violation of Part 1 (commencing with
Section 6300) of Division 5 of the Labor Code or the federal
Occupational Safety and Health Act of 1970 (Public Law 91-596),
settled against any member of the design-build entity.
   (ii) Any debarment, disqualification, or removal from a federal,
state, or local government public works project.
   (iii) Any instance where the design-build entity, or its owners,
officers, or managing employees submitted a bid on a public works
project and were found to be nonresponsive or were found by an
awarding body not to be a responsible bidder.
   (iv) Any instance where the design-build entity, or its owners,
officers, or managing employees defaulted on a construction contract.

   (v) Any violations of the Contractors' State License Law, as
described in Chapter 9 (commencing with Section 7000) of Division 3
of the Business and Professions Code, including alleged violations of
federal or state law regarding the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
Federal Insurance Contribution Act (FICA) withholding requirements
settled against any member of the design-build entity.
   (vi) Any bankruptcy or receivership of any member of the
design-build entity, including, but not limited to, information
concerning any work completed by a surety.
   (vii) Any settled adverse claims, disputes, or lawsuits between
the owner of a public works project and any member of the
design-build entity during the five years preceding submission of a
bid under this article, in which the claim, settlement, or judgment
exceeds fifty thousand dollars ($50,000). Information shall also be
provided concerning any work completed by a surety during this
five-year period.
   (G) If the proposed design-build entity is a partnership, limited
partnership, joint-venture, or other association, a copy of the
organizational documents or agreement committing to form the
organization, and a statement that all general partners, joint
venture members, or other association members agree to be fully
liable for the performance under the design-build contract.
   (H) An acceptable safety record. A bidder's safety record shall be
deemed acceptable if its experience modification rate for the most
recent three-year period is an average of 1.00 or less, and its
average total recordable injury/illness rate and average lost work
rate for the most recent three-year period does not exceed the
applicable statistical standards for its business category or if the
bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.
   (4) The information required under this subdivision shall be
verified under oath by the design-build entity and its members in the
manner in which civil pleadings in civil actions are verified.
Information required under this subdivision that is not a public
record under the California Public Records Act, as described in
Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code, shall not be open to public inspection.
   (d) For those projects utilizing low bid as the final selection
method, the competitive bidding process shall result in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.
   (e) For those projects utilizing best value as a selection method,
the design-build competition shall progress as follows:
   (1) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposals. However, the following minimum factors shall
be weighted as deemed appropriate by the contracting transportation
entity:
   (A) Price.
   (B) Technical design and construction expertise.
   (C) Life-cycle costs over 15 years or more.
   (2) Pursuant to subdivision (b), the transportation entity may
hold discussions or negotiations with responsive bidders using the
process articulated in the transportation entity's request for
proposals.
   (3) When the evaluation is complete, the top three responsive
bidders shall be ranked sequentially based on a determination of
value provided.
   (4) The award of the contract shall be made to the responsible
bidder whose proposal is determined by the transportation entity to
have offered the best value to the public.
   (5) Notwithstanding any other provision of this code, upon
issuance of a contract award, the transportation entity shall
publicly announce its award, identifying the contractor to whom the
award is made, along with a written decision supporting its contract
award and stating the basis of the award. The notice of award shall
also include the transportation entity's second- and third-ranked
design-build entities.
   (6) The written decision supporting the transportation entity's
contract award, described in paragraph (5), and the contract file
shall provide sufficient information to satisfy an external audit.
   6806.  (a) The design-build entity shall provide payment and
performance bonds for the project in the form and in the amount
required by the transportation entity, and issued by a California
admitted surety. In no case shall the amount of the payment bond be
less than the amount of the performance bond.
   (b) The design-build contract shall require errors and omissions
insurance coverage for the design elements of the project.
   (c) The commission shall develop a standard form of payment and
performance bond. In developing the bond form, the commission shall
consult with entities authorized to use the design-build procurement
method under this chapter and with representatives of the surety
industry to achieve a bond form that is consistent with surety
industry standards and practices, while protecting the public
interest.
   6807.  (a) The transportation entity, in each design-build request
for proposals, may identify specific types of subcontractors that
must be included in the design-build entity statement of
qualifications and proposal. All construction subcontractors that are
identified in the proposal shall be afforded all the protections of
Chapter 4 (commencing with Section 4100) of Part 1 of Division 2.
   (b) In awarding subcontracts not listed in the request for
proposals, the design-build entity shall do all of the following:
   (1) Provide public notice of availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the transportation
entity.
   (2) Provide a fixed date and time on which the subcontracted work
will be awarded.
   (3) Establish reasonable qualification criteria and standards.
   (4) Provide that the subcontracted construction work shall be
awarded either on a best value basis or to the lowest responsible
bidder. For construction work awarded on a best value basis, the
design-build entity shall evaluate all bids utilizing the factors
described in paragraph (1) of subdivision (e) of Section 6805, and
shall award the contract to the bidder determined by the design-build
entity to have offered the best value.
   (c) Subcontractors awarded subcontracts under this chapter shall
be afforded all the protections of Chapter 4 (commencing with Section
4100) of Part 1 of Division 2.
   6808.  (a) Notwithstanding any other provision of this chapter,
for a project authorized under subdivision (b) of Section 6802, the
department is the responsible agency for the performance of project
development services, including performance specifications,
preliminary engineering, prebid services, the preparation of project
reports and environmental documents, and construction inspection
services. The department is also the responsible agency for the
preparation of documents that may include, but need not be limited
to, the size, type, and desired design character of the project,
performance specifications covering quality of materials, equipment,
and workmanship, preliminary plans, and any other information deemed
necessary to described adequately the needs of the transportation
entity.
   (b) The department may use department employees or consultants to
perform the services described in subdivision (a), consistent with
Article XXII of the California Constitution. Department resources,
including personnel requirements, necessary for the performance of
those services shall be included in the department's capital outlay
support program for workload purposes in the annual Budget Act.
   6809.  Nothing in this chapter affects, expands, alters, or limits
any rights or remedies otherwise available at law.
   6811.  (a) Not later than June 30 of each year after the
design-build contract is awarded, the awarding transportation entity
shall submit a progress report to the commission. The progress report
shall include, but shall not be limited to, all of the following
information:
           (1) A description of the project.
   (2) The design-build entity that was awarded the project.
   (3) The estimated and actual costs of the project.
   (4) The estimated and actual schedule for project completion.
   (5) A description of any written protests concerning any aspect of
the solicitation, bid, proposal, or award of the design-build
project, including, but not limited to, the resolution of the
protests.
   (6) An assessment of the prequalification process and criteria
utilized under this chapter.
   (7) A description of the labor compliance program required under
Section 6804 and an assessment of the impact of this requirement on a
project.
   (8) A description of the method used to evaluate the bid,
including the weighting of each factor and an assessment of the
impact of this requirement on a project.
   (9) A description of any challenges or unexpected problems that
arose during the construction of the project and a description of the
solutions that were considered and ultimately implemented to address
those challenges and problems.
   (10) Recommendations to improve the design-build process of
construction procurement authorized under this chapter.
   (b) The commission shall submit an annual report to the
Legislature that includes the information provided pursuant to
subdivision (a).
   6812.  The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
   6813.  This chapter shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
  SEC. 4.  Section 20688.6 is added to the Public Contract Code, to
read:
   20688.6.  (a) (1) Notwithstanding any other law, an agency, with
approval of its duly constituted board in a public hearing, may
utilize an alternative procedure for bidding on projects in the
community in excess of one million dollars ($1,000,000) and may award
the project using either the lowest responsible bidder or by best
value.
   (2) Only 10 design-build projects shall be authorized under this
section.
   (b) (1) It is the intent of the Legislature to enable entities as
provided in Part 1 (commencing with Section 33000) of Division 24 of
the Health and Safety Code to utilize design-build for those
infrastructure improvements authorized in Sections 33421 and 33445 of
the Health and Safety Code and subject to the limitations on that
authority described in Section 33421.1 of the Health and Safety Code.

   (2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles and
responsibilities of each participant in the design-build process.
   (3) (A) For contracts awarded prior to the effective date of
either the regulations adopted by the Department of Industrial
Relations pursuant to subdivision (b) of Section 1771.55 of the Labor
Code or the fees established by the department pursuant to
subparagraph (B), if the board elects to proceed under this section,
the board shall establish and enforce for design-build projects a
labor compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code, or it shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to any project where the agency or the
design-build entity has entered into any collective bargaining
agreement or agreements that bind all of the contractors performing
work on the projects.
   (B) For contracts awarded on or after the effective date of both
the regulations adopted by the Department of Industrial Relations
pursuant to subdivision (b) of Section 1771.55 of the Labor Code and
the fees established by the department pursuant to this subparagraph,
if the board elects to proceed under this section it shall pay a fee
to the department, in an amount that the department shall establish,
and as it may from time to time amend, sufficient to support the
department's costs in ensuring compliance with and enforcing
prevailing wage requirements on the project, and labor compliance
enforcement as set forth in subdivision (b) of Section 1771.55 of the
Labor Code. All fees collected pursuant to this subdivision shall be
deposited in the State Public Works Enforcement Fund, created by
Section 1771.3 of the Labor Code, and shall be used only for
enforcement of prevailing wage requirements on those projects.
   (C) The Department of Industrial Relations may waive the fee set
forth in subdivision (b) for a board that has previously been granted
approval by the director to initiate and operate a labor compliance
program on its projects, and that requests to continue to operate the
labor compliance program on its projects in lieu of labor compliance
by the department pursuant to subdivision (b) of Section 1771.55.
This fee shall not be waived for a board that contracts with a third
party to initiate and enforce labor compliance programs on the board'
s projects.
   (c) As used in this section:
   (1) "Best value" means a value determined by objective criteria
related to price, features, functions, and life-cycle costs.
   (2) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
   (3) "Design-build entity" means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.
   (4) "Project" means those infrastructure improvements authorized
in Sections 33421 and 33455 of the Health and Safety Code and subject
to the limitations and conditions on that authority described in
Article 10 (commencing with Section 33420) and Article 11 (commencing
with Section 33430) of Chapter 4 of Part 1 of Division 24 of the
Health and Safety Code.
   (d) Design-build projects shall progress in a four-step process,
as follows:
   (1) (A) The agency shall prepare a set of documents setting forth
the scope of the project. The documents may include, but are not
limited to, the size, type, and desired design character of the
public improvement, performance specifications covering the quality
of materials, equipment, and workmanship, preliminary plans or
building layouts, or any other information deemed necessary to
describe adequately the agency's needs. The performance
specifications and any plans shall be prepared by a design
professional who is duly licensed and registered in California.
   (B) Any architect or engineer retained by the agency to assist in
the development of the project specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.
   (2) (A) Based on the documents prepared as described in paragraph
(1), the agency shall prepare a request for proposals that invites
interested parties to submit competitive sealed proposals in the
manner prescribed by the agency. The request for proposals shall
include, but is not limited to, the following elements:
   (i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the agency to inform interested parties of the
contracting opportunity, to include the methodology that will be used
by the agency to evaluate proposals and specifically if the contract
will be awarded to the lowest responsible bidder.
   (ii) Significant factors that the agency reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice-related factors.
   (iii) The relative importance of the weight assigned to each of
the factors identified in the request for proposals.
   (B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors other than cost or price when combined
are:
   (i) Significantly more important than cost or price.
   (ii) Approximately equal in importance to cost or price.
   (iii) Significantly less important than cost or price.
   (C) If the agency chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately or incorporate into
the request for proposal applicable rules and procedures to be
observed by the agency to ensure that any discussions or negotiations
are conducted in good faith.
   (3) (A) The agency shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by the
agency. In preparing the questionnaire, the agency shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:
   (i) If the design-build entity is a partnership, limited
partnership, or other association, a listing of all of the partners,
general partners, or association members known at the time of bid
submission who will participate in the design-build contract,
including, but not limited to, mechanical subcontractors.
   (ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete, projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the design
and construction of the project, as well as a financial statement
that assures the agency that the design-build entity has the capacity
to complete the project.
   (iii) The licenses, registration, and credentials required to
design and construct the project, including information on the
revocation or suspension of any license, credential, or registration.

   (iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance bonding,
liability insurance, and errors and omissions insurance.
   (v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code, or
the federal Occupational Safety and Health Act of 1970 (P.L. 91-596),
settled against any member of the design-build entity, and
information concerning workers' compensation experience history and
worker safety program.
   (vi) Information concerning any debarment, disqualification, or
removal from a federal, state, or local government public works
project. Any instance in which an entity, its owners, officers, or
managing employees submitted a bid on a public works project and were
found to be nonresponsive, or were found by an awarding body not to
be a responsible bidder.
   (vii) Any instance in which the entity, or its owners, officers,
or managing employees, defaulted on a construction contract.
   (viii) Any violations of the Contractors' State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), including alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
of Federal Insurance Contributions Act (FICA) withholding
requirements settled against any member of the design-build entity.
   (ix) Information concerning the bankruptcy or receivership of any
member of the design-build entity, including information concerning
any work completed by a surety.
   (x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed by a
surety during this period.
   (xi) In the case of a partnership, joint venture, or an
association that is not a legal entity, a copy of the agreement
creating the partnership or association and specifying that all
general partners, joint venturers, or association members agree to be
fully liable for the performance under the design-build contract.
   (B) The information required pursuant to this subdivision shall be
verified under oath by the entity and its members in the manner in
which civil pleadings in civil actions are verified. Information that
is not a public record pursuant to the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code) shall not be open to public inspection.
   (4) The agency shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:
   (A) A competitive bidding process resulting in lump-sum bids by
the prequalified design-build entities. Awards shall be made to the
lowest responsible bidder.
   (B) An agency may use a design-build competition based upon best
value and other criteria set forth in paragraph (2). The design-build
competition shall include the following elements:
   (i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors shall
each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.
   (ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous to
the least.
   (iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.
   (iv) Notwithstanding any provision of this code, upon issuance of
a contract award, the agency shall publicly announce its award,
identifying the contractor to whom the award is made, along with a
written decision supporting its contract award and stating the basis
of the award. The notice of award shall also include the agency's
second- and third-ranked design-build entities.
   (v) For purposes of this paragraph, skilled labor force
availability shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the California
Apprenticeship Council, which has graduated apprentices in each of
the preceding five years. This graduation requirement shall not apply
to programs providing apprenticeship training for any craft that has
been deemed by the Department of Labor and the Department of
Industrial Relations to be an apprenticeable craft in the five years
prior to enactment of this act.
   (vi) For purposes of this paragraph, a bidder's safety record
shall be deemed acceptable if its experience modification rate for
the most recent three-year period is an average of 1.00 or less, and
its average total recordable injury/illness rate and average lost
work rate for the most recent three-year period does not exceed the
applicable statistical standards for its business category or if the
bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.
   (e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.
   (2) Any payment or performance bond written for the purposes of
this section shall be written using a bond form developed by the
agency.
   (f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of paragraph
(3) of subdivision (d) shall be awarded by the design-build entity
in accordance with the design-build process set forth by the agency
in the design-build package. All subcontractors bidding on contracts
pursuant to this section shall be afforded the protections contained
in Chapter 4 (commencing with Section 4100) of Part 1. The
design-build entity shall do both of the following:
   (1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the agency.
   (2) Provide a fixed date and time on which the subcontracted work
will be awarded in accordance with the procedure established pursuant
to this section.
   (g) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the agency.
   (h) The agency may retain the services of a design professional or
construction project manager, or both, throughout the course of the
project in order to ensure compliance with this section.
   (i) Contracts awarded pursuant to this section shall be valid
until the project is completed.
   (j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.
   (k) (1) If the agency elects to award a project pursuant to this
section, retention proceeds withheld by the agency from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.
   (2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the agency and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build entity, prior to or at the time the bid is
requested, that a bond may be required and the subcontractor
subsequently is unable or refuses to furnish a bond to the
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the agency and the design-build entity from any
payment made by the design-build entity to the subcontractor.
   (l) Each agency that elects to proceed under this section and uses
the design-build method on a public works project shall submit to
the Legislative Analyst's Office before December 1, 2014, a report
containing a description of each public works project procured
through the design-build process after January 1, 2010, and before
November 1, 2014. The report shall include, but shall not be limited
to, all of the following information:
   (1) The type of project.
   (2) The gross square footage of the project.
   (3) The design-build entity that was awarded the project.
   (4) Where appropriate, the estimated and actual length of time to
complete the project.
   (5) The estimated and actual project costs.
   (6) A description of any written protests concerning any aspect of
the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.
   (7) An assessment of the prequalification process and criteria.
   (8) An assessment of the effect of retaining 5-percent retention
on the project.
   (9) A description of the labor force compliance program and an
assessment of the project impact, where required.
   (10) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors used
to evaluate the bid, including the weighting of each factor and an
assessment of the effectiveness of the methodology.
   (11) An assessment of the project impact of skilled labor force
availability.
   (12) An assessment of the design-build dollar limits on agency
projects. This assessment shall include projects where the agency
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.
   (13) An assessment of the most appropriate uses for the
design-build approach.
   (m) (1) In order to comply with paragraph (2) of subdivision (a),
the State Public Works Board is required to maintain the list of
agencies that have applied and are eligible to be qualified for this
authority.
   (2) Each agency that is interested in proceeding under the
authority in this section must apply to the State Public Works Board.
The application to proceed shall be in writing and contain such
information that the State Public Works Board may require.
   (3) The State Public Works Board shall approve or deny an
application, in writing, within 90 days of the submission of a
complete application. The authority to deny an application shall only
be exercised if the condition set forth in paragraph (2) of
subdivision (a) has been satisfied.
   (4) An agency that has applied for this authorization shall, after
it determines it no longer is interested in using this authority,
notify the State Public Works Board in writing within 30 days of its
determination. Upon notification, the State Public Works Board may
contact any previous applicants, denied pursuant to paragraph (2) of
subdivision (a), to inform them of the availability to proceed under
this section.
   (5) The State Public Works Board may authorize no more that 10
projects. The board shall not authorize or approve more than two
projects for any one eligible redevelopment agency that submits a
completed application.
   (6) The State Public Works Board shall notify the Legislative
Analyst's Office when 10 projects have been approved.
   (n) On or before January 1, 2015, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
agencies pursuant to this section, including the information listed
in subdivision (l). The report may include recommendations for
modifying or extending this section.
   (o) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.
   (p) This section shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
  SEC. 5.  Section 143 of the Streets and Highways Code is amended to
read:
   143.  (a) (1) "Best value" means a value determined by objective
criteria, including, but not limited to, price, features, functions,
life-cycle costs, and other criteria deemed appropriate by the
department or the regional transportation agency.
   (2) "Contracting entity or lessee" means a public or private
entity, or consortia thereof, that has entered into a comprehensive
development lease agreement with the department or a regional
transportation agency for a transportation project pursuant to this
section.
   (3) "Design-build" means a procurement process in which both the
design and construction of a project are procured from a single
entity.
   (4) "Regional transportation agency" means any of the following:
   (A) A transportation planning agency as defined in Section 29532
or 29532.1 of the Government Code.
   (B) A county transportation commission as defined in Section
130050, 130050.1, or 130050.2 of the Public Utilities Code.
   (C) Any other local or regional transportation entity that is
designated by statute as a regional transportation agency.
   (D) A joint exercise of powers authority as defined in Chapter 5
(commencing with Section 6500) of Division 7 of Title 1 of the
Government Code, with the consent of a transportation planning agency
or a county transportation commission for the jurisdiction in which
the transportation project will be developed.
   (5) "Public Infrastructure Advisory Commission" means a unit or
auxiliary organization established by the Business, Transportation
and Housing Agency that advises the department and regional
transportation agencies in developing transportation projects through
performance-based infrastructure partnerships.
   (6) "Transportation project" means one or more of the following:
planning, design, development, finance, construction, reconstruction,
rehabilitation, improvement, acquisition, lease, operation, or
maintenance of highway, public street, rail, or related facilities
supplemental to existing facilities currently owned and operated by
the department or regional transportation agencies that is consistent
with the requirements of subdivision (c).
   (b) (1) The Public Infrastructure Advisory Commission shall do all
of the following:
   (A) Identify transportation project opportunities throughout the
state.
   (B) Research and document similar transportation projects
throughout the state, nationally, and internationally, and further
identify and evaluate lessons learned from these projects.
   (C) Assemble and make available to the department or regional
transportation agencies a library of information, precedent,
research, and analysis concerning infrastructure partnerships and
related types of public-private transactions for public
infrastructure.
   (D) Advise the department and regional transportation agencies,
upon request, regarding infrastructure partnership suitability and
best practices.
   (E) Provide, upon request, procurement-related services to the
department and regional transportation agencies for infrastructure
partnership.
   (2) The Public Infrastructure Advisory Commission may charge a fee
to the department and regional transportation agencies for the
services described in subparagraphs (D) and (E) of paragraph (1), the
details of which shall be articulated in an agreement entered into
between the Public Infrastructure Advisory Commission and the
department or the regional transportation agency.
   (c) (1) Notwithstanding any other provision of law, only the
department, in cooperation with regional transportation agencies, and
regional transportation agencies, may solicit proposals, accept
                                      unsolicited proposals,
negotiate, and enter into comprehensive development lease agreements
with public or private entities, or consortia thereof, for
transportation projects.
   (2) Projects proposed pursuant to this section and associated
lease agreements shall be submitted to the California Transportation
Commission. The commission, at a regularly scheduled public hearing,
shall select the candidate projects from projects nominated by the
department or a regional transportation agency after reviewing the
nominations for consistency with paragraphs (3) and (4). Approved
projects may proceed with the process described in paragraph (5).
   (3) The projects authorized pursuant to this section shall be
primarily designed to achieve the following performance objectives:
   (A) Improve mobility by improving travel times or reducing the
number of vehicle hours of delay in the affected corridor.
   (B) Improve the operation or safety of the affected corridor.
   (C) Provide quantifiable air quality benefits for the region in
which the project is located.
   (4) In addition to meeting the requirements of paragraph (3), the
projects authorized pursuant to this section shall address a known
forecast demand, as determined by the department or regional
transportation agency.
   (5) At least 60 days prior to executing a final lease agreement
authorized pursuant to this section, the department or regional
transportation agency shall submit the agreement to the Legislature
and the Public Infrastructure Advisory Commission for review. Prior
to submitting a lease agreement to the Legislature and the Public
Infrastructure Advisory Commission, the department or regional
transportation agency shall conduct at least one public hearing at a
location at or near the proposed facility for purposes of receiving
public comment on the lease agreement. Public comments made during
this hearing shall be submitted to the Legislature and the Public
Infrastructure Advisory Commission with the lease agreement. The
Secretary of Business, Transportation and Housing or the Chairperson
of the Senate or Assembly fiscal committees or policy committees with
jurisdiction over transportation matters may, by written
notification to the department or regional transportation agency,
provide any comments about the proposed agreement within the 60-day
period prior to the execution of the final agreement. The department
or regional transportation agency shall consider those comments prior
to executing a final agreement and shall retain the discretion for
executing the final lease agreement.
   (d) For the purpose of facilitating those projects, the agreements
between the parties may include provisions for the lease of
rights-of-way in, and airspace over or under, highways, public
streets, rail, or related facilities for the granting of necessary
easements, and for the issuance of permits or other authorizations to
enable the construction of transportation projects. Facilities
subject to an agreement under this section shall, at all times, be
owned by the department or the regional transportation agency, as
appropriate. For department projects, the commission shall certify
the department's determination of the useful life of the project in
establishing the lease agreement terms. In consideration therefor,
the agreement shall provide for complete reversion of the leased
facility, together with the right to collect tolls and user fees, to
the department or regional transportation agency, at the expiration
of the lease at no charge to the department or regional
transportation agency. At time of the reversion, the facility shall
be delivered to the department or regional transportation agency, as
applicable, in a condition that meets the performance and maintenance
standards established by the department or regional transportation
agency and that is free of any encumbrance, lien, or other claims.
   (e) Agreements between the department or regional transportation
agency and the contracting entity or lessee shall authorize the
contracting entity or lessee to use a design-build method of
procurement for transportation projects, subject to the requirements
for utilizing such a method contained in Chapter 6.5 (commencing with
Section 6800) of Part 1 of Division 2 of the Public Contract Code,
other than Sections 6802, 6803, and 6813 of that code, if those
provisions are enacted by the Legislature during the 2009-10 Regular
Session, or a 2009-10 extraordinary session.
   (f) (1) (A) Notwithstanding any other provision of this chapter,
for projects on the state highway system, the department is the
responsible agency for the performance of project development
services, including performance specifications, preliminary
engineering, prebid services, the preparation of project reports and
environmental documents, and construction inspection services. The
department is also the responsible agency for the preparation of
documents that may include, but need not be limited to, the size,
type, and desired design character of the project, performance
specifications covering the quality of materials, equipment, and
workmanship, preliminary plans, and any other information deemed
necessary to describe adequately the needs of the department or
regional transportation agency.
   (B) The department may use department employees or consultants to
perform the services described in subparagraph (A), consistent with
Article XXII of the California Constitution. Department resources,
including personnel requirements, necessary for the performance of
those services shall be included in the department's capital outlay
support program for workload purposes in the annual Budget Act.
   (2) The department or a regional transportation agency may
exercise any power possessed by it with respect to transportation
projects to facilitate the transportation projects pursuant to this
section. The department, regional transportation agency, and other
state or local agencies may provide services to the contracting
entity or lessee for which the public entity is reimbursed,
including, but not limited to, planning, environmental planning,
environmental certification, environmental review, preliminary
design, design, right-of-way acquisition, construction, maintenance,
and policing of these transportation projects. The department or
regional transportation agency, as applicable, shall regularly
inspect the facility and require the contracting entity or lessee to
maintain and operate the facility according to adopted standards.
Except as may otherwise be set forth in the lease agreement, the
contracting entity or lessee shall be responsible for all costs due
to development, maintenance, repair, rehabilitation, and
reconstruction, and operating costs.
   (g) (1) In selecting private entities with which to enter into
these agreements, notwithstanding any other provision of law, the
department and regional transportation agencies may utilize, but are
not limited to utilizing, one or more of the following procurement
approaches:
   (A) Solicitations of proposals for defined projects and calls for
project proposals within defined parameters.
   (B) Prequalification and short-listing of proposers prior to final
evaluation of proposals.
   (C) Final evaluation of proposals based on qualifications and best
value. The California Transportation Commission shall develop and
adopt criteria for making that evaluation prior to evaluation of a
proposal.
   (D) Negotiations with proposers prior to award.
   (E) Acceptance of unsolicited proposals, with issuance of requests
for competing proposals. Neither the department nor a regional
transportation agency may award a contract to an unsolicited bidder
without receiving at least one other responsible bid.
   (2) When evaluating a proposal submitted by the contracting entity
or lessee, the department or the regional transportation agency may
award a contract on the basis of the lowest bid or best value.
   (h) The contracting entity or lessee shall have the following
qualifications:
   (1) Evidence that the members of the contracting entity or lessee
have completed, or have demonstrated the experience, competency,
capability, and capacity to complete, a project of similar size,
scope, or complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project, and a financial statement
that ensures that the contracting entity or lessee has the capacity
to complete the project.
   (2) The licenses, registration, and credentials required to design
and construct the project, including, but not limited to,
information on the revocation or suspension of any license,
credential, or registration.
   (3) Evidence that establishes that members of the contracting
entity or lessee have the capacity to obtain all required payment and
performance bonding, liability insurance, and errors and omissions
insurance.
   (4) Evidence that the contracting entity or lessee has workers'
compensation experience, history, and a worker safety program of
members of the contracting entity or lessee that is acceptable to the
department or regional transportation agency.
   (5) A full disclosure regarding all of the following with respect
to each member of the contracting entity or lessee during the past
five years:
   (A) Any serious or willful violation of Part 1 (commencing with
Section 6300) of Division 5 of the Labor Code or the federal
Occupational Safety and Health Act of 1970 (Public Law 91-596).
   (B) Any instance where members of the contracting entity or lessee
were debarred, disqualified, or removed from a federal, state, or
local government public works project.
   (C) Any instance where members of the contracting entity or
lessee, or its owners, officers, or managing employees submitted a
bid on a public works project and were found to be nonresponsive or
were found by an awarding body not to be a responsible bidder.
   (D) Any instance where members of the contracting entity or
lessee, or its owners, officers, or managing employees defaulted on a
construction contract.
   (E) Any violations of the Contractors' State License Law (Chapter
9 (commencing with Section 7000) of Division 3 of the Business and
Professions Code), including, but not limited to, alleged violations
of federal or state law regarding the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding, or
Federal Insurance Contribution Act (FICA) withholding requirements.
   (F) Any bankruptcy or receivership of any member of the
contracting entity or lessee, including, but not limited to,
information concerning any work completed by a surety.
   (G) Any settled adverse claims, disputes, or lawsuits between the
owner of a public works project and any member of the contracting
entity or lessee during the five years preceding submission of a bid
under this article, in which the claim, settlement, or judgment
exceeds fifty thousand dollars ($50,000). Information shall also be
provided concerning any work completed by a surety during this
five-year period.
   (H) If the contracting entity or lessee is a partnership, joint
venture, or an association that is not a legal entity, a copy of the
agreement creating the partnership or association that specifies that
all general partners, joint venturers, or association members agree
to be fully liable for the performance under the agreement.
   (i) No agreement entered into pursuant to this section shall
infringe on the authority of the department or a regional
transportation agency to develop, maintain, repair, rehabilitate,
operate, or lease any transportation project. Lease agreements may
provide for reasonable compensation to the contracting entity or
lessee for the adverse effects on toll revenue or user fee revenue
due to the development, operation, or lease of supplemental
transportation projects with the exception of any of the following:
   (1) Projects identified in regional transportation plans prepared
pursuant to Section 65080 of the Government Code.
   (2) Safety projects.
   (3) Improvement projects that will result in incidental capacity
increases.
   (4) Additional high-occupancy vehicle lanes or the conversion of
existing lanes to high-occupancy vehicle lanes.
   (5) Projects located outside the boundaries of a public-private
partnership project, to be defined by the lease agreement.
   However, compensation to a contracting entity or lessee shall only
be made after a demonstrable reduction in use of the facility
resulting in reduced toll or user fee revenues, and may not exceed
the difference between the reduction in those revenues and the amount
necessary to cover the costs of debt service, including principal
and interest on any debt incurred for the development, operation,
maintenance, or rehabilitation of the facility.
   (j) (1) Agreements entered into pursuant to this section shall
authorize the contracting entity or lessee to impose tolls and user
fees for use of a facility constructed by it, and shall require that
over the term of the lease the toll revenues and user fees be applied
to payment of the capital outlay costs for the project, the costs
associated with operations, toll and user fee collection,
administration of the facility, reimbursement to the department or
other governmental entity for the costs of services to develop and
maintain the project, police services, and a reasonable return on
investment. The agreement shall require that, notwithstanding
Sections 164, 188, and 188.1, any excess toll or user fee revenue
either be applied to any indebtedness incurred by the contracting
entity or lessee with respect to the project, improvements to the
project, or be paid into the State Highway Account, or for all three
purposes, except that any excess toll revenue under a lease agreement
with a regional transportation agency may be paid to the regional
transportation agency for use in improving public transportation in
and near the project boundaries.
   (2) Lease agreements shall establish specific toll or user fee
rates. Any proposed increase in those rates not otherwise established
or identified in the lease agreement during the term of the
agreement shall first be approved by the department or regional
transportation agency, as appropriate, after at least one public
hearing conducted at a location near the proposed or existing
facility.
   (3) The collection of tolls and user fees for the use of these
facilities may be extended by the commission or regional
transportation agency at the expiration of the lease agreement.
However, those tolls or user fees shall not be used for any purpose
other than for the improvement, continued operation, or maintenance
of the facility.
   (k) Agreements entered into pursuant to this section shall include
indemnity, defense, and hold harmless provisions agreed to by the
department or regional transportation agency and the contracting
entity or lessee, including provisions for indemnifying the State of
California or the regional transportation agency against any claims
or losses resulting or accruing from the performance of the
contracting entity or lessee.
   (l) The plans and specifications for each transportation project
on the state highway system developed, maintained, repaired,
rehabilitated, reconstructed, or operated pursuant to this section
shall comply with the department's standards for state transportation
projects. The lease agreement shall include performance standards,
including, but not limited to, levels of service. The agreement shall
require facilities on the state highway system to meet all
requirements for noise mitigation, landscaping, pollution control,
and safety that otherwise would apply if the department were
designing, building, and operating the facility. If a facility is on
the state highway system, the facility leased pursuant to this
section shall, during the term of the lease, be deemed to be a part
of the state highway system for purposes of identification,
maintenance, enforcement of traffic laws, and for the purposes of
Division 3.6 (commencing with Section 810) of Title 1 of the
Government Code.
   (m) Failure to comply with the lease agreement in any significant
manner shall constitute a default under the agreement and the
department or the regional transportation agency, as appropriate,
shall have the option to initiate processes to revert the facility to
the public agency.
   (n) The assignment authorized by subdivision (c) of Section 130240
of the Public Utilities Code is consistent with this section.
   (o) A lease to a private entity pursuant to this section is deemed
to be public property for a public purpose and exempt from
leasehold, real property, and ad valorem taxation, except for the
use, if any, of that property for ancillary commercial purposes.
   (p) Nothing in this section is intended to infringe on the
authority to develop high-occupancy toll lanes pursuant to Section
149.4, 149.5, or 149.6.
   (q) Nothing in this section shall be construed to allow the
conversion of any existing nontoll or nonuser-fee lanes into tolled
or user fee lanes with the exception of a high-occupancy vehicle lane
that may be operated as a high-occupancy toll lane for vehicles not
otherwise meeting the requirements for use of that lane.
   (r) The lease agreement shall require the contracting entity or
lessee to provide any information or data requested by the California
Transportation Commission or the Legislative Analyst. The
commission, in cooperation with the Legislative Analyst, shall
annually prepare a report on the progress of each project and
ultimately on the operation of the resulting facility. The report
shall include, but not be limited to, a review of the performance
standards, a financial analysis, and any concerns or recommendations
for changes in the program authorized by this section.
   (s) Notwithstanding any other provision of this section, no lease
agreement may be entered into pursuant to the section that affects,
alters, or supersedes the Memorandum of Understanding (MOU), dated
November 26, 2008, entered into by the Golden Gate Bridge Highway and
Transportation District, the Metropolitan Transportation Commission,
and the San Francisco County Transportation Authority, relating to
the financing of the U.S. Highway 101/Doyle Drive reconstruction
project located in the City and County of San Francisco.
   (t) No lease agreements may be entered into under this section on
or after January 1, 2017.
  SEC. 6.  (a) Notwithstanding any other provision of law, the peer
review committee established pursuant to subdivision (d) of Section
6803 of the Public Contract Code shall continue to operate until it
has fulfilled the reporting requirements of this section.
   (b) The committee shall conduct an evaluation of all
transportation projects using the design-build method of construction
procurement authorized under Chapter 6.5 (commencing with Section
6800) of Part 1 of Division 2 of the Public Contract Code.
   (c) The evaluation pursuant to subdivision (b) shall examine the
procurement method, comparing those projects using low bid and best
value, and shall consider whether the projects were on time and on
budget. The evaluation shall also compare the design-build projects
to similar transportation projects that used the design-bid-build
method of construction procurement.
   (d) (1) The California Transportation Commission shall submit a
midterm report of its findings to the Legislature no later than June
30, 2012.
   (2) The California Transportation Commission shall submit a final
report of its findings to the Legislature no later than June 30,
2015.
  SEC. 7.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.