BILL NUMBER: SB 118	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 28, 2011

INTRODUCED BY   Senator Yee

                        JANUARY 20, 2011

   An act to amend Section  4217.12   4217.16
 of the Government Code, relating to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 118, as amended, Yee. Public contracts: energy service
contracts  : competitive bidding requirements  
best value  .
   Existing law requires public agencies to adhere to competitive
bidding requirements and procedures when entering into public works
contracts, subject to various exceptions based on the size and cost
of the project, among other factors. One exception from these bidding
requirements provides the authority for a public agency to enter
into energy service contracts and related facility ground leases, as
defined  , if the governing body makes a determination at a
public hearing that specified cost savings and benefits of the
project are in the public agency's best interests  . 
Existing law authorizes a public agency, prior to awarding or
entering into an agreement or lease, to request proposals from
qualified persons. 
   This bill  , on and after January 1, 2012, would authorize
a public agency, notwithstanding any other law, to enter into an
energy service contract and any necessarily related facility ground
lease only if its contracting process is in accordance with
competitive bidding requirements and procedures for public contracts,
as specified   would instead require the public agency
to publish a request for information, qualification, or proposal
pursuant to a public process determined by the public agency, and
would provide that the contract be awarded based on best value 
. 
   By imposing new duties on local public agencies, the bill would
impose a state-mandated local program.  
   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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


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

   SECTION 1.    Section 4217.16 of the  
Government Code   is amended to read: 
   4217.16.  Prior to awarding or entering into an agreement or
lease, the public agency  may request   shall
publish a request for information, qualification, or  proposals
from qualified persons  pursuant to a public process determined
by the public agency  . After evaluating the proposals, the
public agency may award the contract  that is of best value 
on the basis of the experience of the contractor, the type of
technology employed by the contractor, the cost to the  local
  public  agency, and any other relevant
considerations. The public agency may utilize the pool of qualified
energy service companies established pursuant to Section 388 of the
Public Utilities Code and the procedures contained in that section in
awarding the contract. 
  SEC. 2.    If the Commission on State Mandates determines
that this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.  
  SECTION 1.    It is the intent of the Legislature
to require public agencies entering into energy service contracts
that are subject to Section 4217.12 of the Government Code to follow
competitive bidding procedures.  
  SEC. 2.    Section 4217.12 of the Government Code
is amended to read:
   4217.12.  (a) Notwithstanding any other provision of law and
except as provided in subdivision (c), a public agency may enter into
an energy service contract and any necessarily related facility
ground lease on terms that its governing body determines are in the
best interests of the public agency if the determination is made at a
regularly scheduled public hearing, public notice of which is given
at least two weeks in advance, and if the governing body finds:
   (1) That the anticipated cost to the public agency for thermal or
electrical energy or conservation services provided by the energy
conservation facility under the contract will be less than the
anticipated marginal cost to the public agency of thermal,
electrical, or other energy that would have been consumed by the
public agency in the absence of those purchases.
   (2) That the difference, if any, between the fair rental value for
the real property subject to the facility ground lease and the
agreed rent, is anticipated to be offset by below-market energy
purchases or other benefits provided under the energy service
contract.
   (b) State agency heads may make findings pursuant to subdivision
(a) without holding a public hearing.
   (c) On and after January 1, 2012, notwithstanding any other
provision of law, a public agency may enter into an energy service
contract and any necessarily related facility ground lease only if
its contracting process is in accordance with the competitive bidding
requirements and procedures set forth in the Public Contract Code.