BILL NUMBER: AB 1671 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Huffman FEBRUARY 14, 2012 An act to amend Section 7202 of the Public Contract Code, relating to public contracts. LEGISLATIVE COUNSEL'S DIGEST AB 1671, as introduced, Huffman. Department of Transportation: retention proceeds. Existing law prohibits the Department of Transportation, until January 1, 2014, from withholding retention proceeds when making progress payments for work performed by a contractor. This bill would make these provisions operative until January 1, 2020. The bill would also make a statement of legislative findings. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. (a) The Legislature finds and declares all of the following: (1) California's construction industry has experienced one of the worst economic downturns in its history. (2) Unemployment within California's construction industry has exceeded 30 percent or more statewide. (3) The California Department of Transportation (Caltrans) remains one of the few areas in public works that continues to actively request bids for numerous construction projects statewide. (4) These projects have had, and will continue to have, a significant positive impact on employment within the construction industry. (5) Much of Caltrans' work is funded through federal moneys which already stipulate that 0-percent retentions can be withheld on all passthrough funding. (6) Zero-percent retentions have had such a positive impact on contractor viability and, in turn, employment particularly during these extremely competitive times. (7) Increased competition through the viability of contractors that have benefited from 0-percent retentions ensures that Caltrans receives the best prices on all of its construction work. (8) Extending the operation of 0-percent retentions on transportation contracts provides confidence within California's construction industry to continue working with Caltrans on projects to help rebuild California's infrastructure. SEC. 2. Section 7202 of the Public Contract Code is amended to read: 7202. (a) The Department of Transportation is prohibited from withholding retention proceeds when making progress payments to a contractor for work performed on a transportation project. (b) Nothing in this section shall alter, amend, or impair the rights, duties, and obligations of an original contractor, its subcontractors, and all subcontractors thereunder, relating to the construction of any public work of improvement as set forth in Section 7200 of the Public Contract Code. (c) The department shall promptly notify the appropriate policy committees of the Legislature if the state's best interests are compromised because retention was not withheld on a transportation project. (d) This section shall become inoperative and shall be repealed on January 1,20142020 .