BILL NUMBER: AB 1671	CHAPTERED
	BILL TEXT

	CHAPTER  290
	FILED WITH SECRETARY OF STATE  SEPTEMBER 11, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 11, 2012
	PASSED THE SENATE  AUGUST 9, 2012
	PASSED THE ASSEMBLY  AUGUST 13, 2012
	AMENDED IN SENATE  JULY 6, 2012

INTRODUCED BY   Assembly Member Huffman
   (Coauthors: Assembly Members Ammiano, Jeffries, Portantino, and
Wieckowski)

                        FEBRUARY 14, 2012

   An act to amend Sections 7202 and 10167 of the Public Contract
Code, relating to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1671, Huffman. Department of Transportation: retention
proceeds: State Contract Act: bids: bidder's security.
   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.
   The State Contract Act, generally requires bids to be presented
under sealed cover and accompanied by bidder's security in the form
of cash, a cashier's check, a certified check, or a bidder's bond, as
provided.
   This bill would allow as acceptable forms of bidder's security, an
electronic bidder's bond by an admitted surety insurer, a signed
bidder's bond by an admitted surety insurer, and cash, a cashier's
check, or certified check, as provided.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) California's construction industry has experienced one of the
worst economic downturns in its history.
   (b) Unemployment within California's construction industry has
exceeded 30 percent or more statewide.
   (c) 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.
   (d) These projects have had, and will continue to have, a
significant positive impact on employment within the construction
industry.
   (e) Much of Caltrans' work is funded through federal moneys which
already stipulate that 0-percent retentions can be withheld on all
passthrough funding.
   (f) Zero-percent retentions have had such a positive impact on
contractor viability and, in turn, employment particularly during
these extremely competitive times.
   (g) 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.
   (h) 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, 2020.
  SEC. 3.  Section 10167 of the Public Contract Code is amended to
read:
   10167.  (a) All bids shall be presented under sealed cover and
accompanied by one of the following forms of bidder's security:
   (1) An electronic bidder's bond by an admitted surety insurer
submitted using an electronic registry service approved by the
department advertising the contract.
   (2) A signed bidder's bond by an admitted surety insurer received
by the department advertising the contract.
   (3) Cash, a cashier's check, or certified check received by, and
made payable to, the director of the department advertising the
contract.
   (b) The required bidder's security shall be in an amount equal to
at least 10 percent of the amount bid. A bid shall not be considered
unless one of the forms of bidder's security is enclosed with it.
   (c) All bids submitted pursuant to this section shall also comply
with the provisions of Section 1601 of the Public Contract Code.