BILL ANALYSIS                                                                                                                                                                                                    



                                        
                       SENATE LOCAL GOVERNMENT COMMITTEE
                        Senator Patricia Wiggins, Chair


          BILL NO:  SB 694                      HEARING:  1/6/10
          AUTHOR:  Correa                       FISCAL:  Yes
          VERSION:  12/15/09                    CONSULTANT:  Detwiler
          
                UNIFORM PUBLIC CONSTRUCTION COST ACCOUNTING ACT

                           Background and Existing Law  

          The Public Contract Code spells out the procedures that  
          local officials follow when they build public works  
          projects, including limits on the contracts' values.

          When counties, cities, special districts, redevelopment  
          agencies, school districts, and community college districts  
          voluntarily adopt the standards and procedures of the  
          Uniform Public Construction Cost Accounting Act, they can  
          use higher limits for their contracts (AB 1666, Cortese,  
          1983).   The State Controller must tell local agencies  
          about the Act's benefits (AB 1047, Houston, 2007).  About  
          700 local agencies participate.

          A 14-member California Uniform Construction Cost Accounting  
          Commission reviews the statutory limits every five years.   
          If the Commission recommends higher amounts, the State  
          Controller promulgates the changes and the Legislature  
          periodically amends the Act to reflect the new limits.   
          Currently, local agencies can use their own employees for  
          projects worth $30,000 or less.  This amount is called the  
          "force account limit."  Projects worth $125,000 or less  
          rely on informal bids; projects that cost more than  
          $125,000 require formal bids (SB 1196, Senate Local  
          Government Committee, 2006).

          When someone contends that a local agency isn't following  
          the Act, the Commission has 30 days to review and act on  
          the dispute.  If the Commission finds that a local agency  
          has violated the Act three times within a 10-year period,  
          it can prohibit that agency from using the Act for five  
          years (AB 2372, Pavley, 2006).

          The State General Fund doesn't pay the Commission's  
          administrative expenses.  The Act requires the State  
          Controller to provide limited staff support to the  
          Commission whose members are uncompensated, except for  




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          travel expenses.  Since 2004, when the Commission began  
          soliciting money from local agencies, contractors'  
          associations, and labor unions, it's received about $11,000  
          in donations.  This lack of a dependable revenue stream  
          makes it hard for the Commission to respond quickly to  
          complaints.













































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                                   Proposed Law  

          Senate Bill 694 extends the time limit for the California  
          Uniform Construction Cost Accounting Commission to review  
          and act on disputes over whether local agencies have  
          followed the Uniform Public Contract Construction Cost  
          Accounting Act.  For complaints which allege that local  
          officials rejected all bids and instead claimed that the  
          agency can do the work less expensively, SB 694 extends the  
          time limit from 30 days to 45 days.  For complaints which  
          allege that local officials have either exceeded the force  
          accounts or improperly classified the work as maintenance,  
          the bill extends the time limit from 30 days to 90 days.

          SB 694 allows the Commission to impose reasonable fees on  
          the agencies that have elected to be subject to the Act's  
          procedures.  The bill requires that the Commission ensure  
          that the total amount collected equals the amount  
          reasonably needed to cover the Commission's administrative  
          costs.


                                     Comments  

          1.   Dollars and duties  .  The California Uniform  
          Construction Cost Accounting Commission has considerable  
          responsibilities, but only limited resources.  Without  
          State General Fund support or its own employees, the  
          Commission gets by on donations and the help that the State  
          Controller's Office can spare.  As a result, it's hard for  
          the Commission to resolve complicated complaints within the  
          30-day statutory deadline.  By extending the time limits  
          for the Commission to act on complaints, the bill gives the  
          part-time body enough time to fulfill its statutory duties.  
           By allowing the Commission to charge fees to the  
          participating local governments, SB 694 improves oversight  
          of how local officials use the more flexible state law.

          2.   It's about time  .  Because the California Uniform  
          Construction Cost Commission is a part-time body without  
          employees, it's nearly impossible for the commissioners to  
          investigate complaints and then schedule a publicly noticed  
          hearing within the 30-day statutory time limit.  SB 694  
          extends that deadline by creating a two-tier arrangement:  
          45 days for one type of allegation, 90 days for the other  
          two types of complaints.  The Committee may wish to  





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          consider an amendment that provides a simpler approach: 90  
          days to review and act on all complaints.

          3.   Take it easy  .  State regulatory fees shouldn't generate  
          revenues that exceed a program's costs.  SB 694 limits the  
          California Uniform Construction Cost Commission's new fees  
          to "the amount necessary to cover the commission's costs."   
          While that formula fits, it lacks a fixed limit on the  
          amount to be paid by the participating local governments.   
          If legislators want to tread carefully, the Committee may  
          wish to consider amendments that: (1) preclude the  
          Commission from charging more than $500 a year to a  
          participating local government, (2) encourage the  
          Commission to adopt a sliding scale for its fees, and (3)  
          put a seven-year sunset clause on the new fee authority so  
          that legislators can review how the Commission responds.  

          4.   Legislative history  .  When originally introduced in  
          February 2009, SB 694 would have set a threshold for  
          requiring competitive bids on local public works projects,  
          with few exceptions.  The May 2009 amendments reduced the  
          bill to a statement of legislative intent.  The December  
          15, 2009 amendments removed all of that language and  
          instead substituted the changes to the Uniform Construction  
          Cost Accounting Act.  
           

                        Support and Opposition  (12/22/09)

           Support  :  Air-conditioning & Refrigeration Contractors  
          Association, Air Conditioning Sheet Metal Association,  
          Associated General Contractors, California Chapter of the  
          American Fence Contractors' Association, California  
          Chapters of the National Electrical Contractors  
          Association, California Fence Contractors' Association,  
          California Landscape Contractors Association, California  
          Legislative Conference of the Plumbing, Heating, and Piping  
          Industry, Construction Industry Force Account Council,  
          Engineering Contractors' Association, Flasher/Barricade  
          Association, Marin Builders' Association, Southern  
          California Contractors Association.

           Opposition  :  California State Association of Counties,  
          Regional Council of Rural Counties.







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