BILL NUMBER: SB 734 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 14, 2011
INTRODUCED BY Senator Price
( Coauthor: Assembly Member
Galgiani )
FEBRUARY 18, 2011
An act to amend Section 14838.1 of the Government
add Section 185034.1 of the Public Utilities
Code, relating to small business.
LEGISLATIVE COUNSEL'S DIGEST
SB 734, as amended, Price. High-Speed Rail Authority:
Small business participation goals. program:
bidding preferences.
Existing law provides for various programs to encourage the
participation of small businesses, as certified by the Department of
General Services, in state agency contracts, and sets forth the
duties of the Director of General Services and the directors of other
state agencies in this regard.
Existing law, in order to encourage the participation of small
businesses in the construction of the state's infrastructure, as
provided in specified infrastructure-related bond acts of 2006,
requires each state agency, as defined, to establish a 25% goal for
the participation of small businesses in the construction of the
state's infrastructure, as provided in those bond acts, to advertise
all upcoming opportunities to bid on contracts for projects funded by
those bond acts, as specified, including bidding procedures, and to
provide California small businesses with information regarding
available training and technical assistance for understanding and
bidding on contracts for projects funded by those bond acts.
Existing law also requires each state agency that has awarded any
contract financed with the proceeds of the infrastructure-related
bond acts in the previous fiscal year to report to the Director of
General Services on an annual basis on certain statistics regarding
small business and microbusiness participation.
Existing law, the California High-Speed Rail Act, creates the
High-Speed Rail Authority to develop and implement a high-speed rail
system in the state, with specified powers and duties. Existing law,
pursuant to the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century, approved by the voters as Proposition 1A at the
November 4, 2008, general election, provides for the issuance of
$9.95 billion in general obligation bonds for high-speed rail and
related purposes.
This bill would extend the application of the
above-referenced small business participation goals and reporting
provisions to the High-Speed Rail Authority relative to the Safe,
Reliable High-Speed Passenger Train Bond Act for the 21st Century
require the authority to identify essential components
of, and adopt, a small business program as part of contracts to be
awarded by the authority relative to development and construction of
the high-speed rail system. The bill would require the authority to
provide certain bidding preferences and to establish a goal
methodology to determine the appropriate level of involvement of
small businesses in authority contracts. The bill would require at
least one public hearing by the authority before the program is
adopted and would require the authority to include a plan
for outreach to small businesses .
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. The Legislature finds and declares all
of the following:
(a) In order to keep faith with the promise to promote California
jobs, following the passage of the Safe, Reliable, High-Speed
Passenger Train Bond Act for the 21st Century, the state should aid,
counsel, assist, and protect, to the maximum extent possible, the
interests of small businesses, including microbusinesses.
(b) California's microbusinesses are known to bring real diversity
to local economies and the state and deserve a fair share of
contracts awarded for the high-speed rail project. Although
microbusinesses comprise over 80 percent of California's certified
small businesses, and while it was the state's intent to afford
microbusinesses the same opportunities as other small businesses in
competing for state contracts, many microbusiness owners are
disadvantaged when competing against their larger small business
counterparts. Data compiled by the Department of General Services
shows that of the $2.4 billion of contract dollars issued by state
agencies to small businesses and microbusinesses in fiscal year
2008-09, microbusinesses were awarded only 37 percent, or $866
million worth of state contracting. Moreover, of the 103,371
contracts issued during the same timeframe, microbusinesses received
only 42,140, or 41 percent of the contracts issued by the state.
(c) It is beneficial to the state to promote and facilitate the
fullest possible participation by California workers to train for new
jobs and careers in today's global economy.
(d) Therefore, it is essential to ensure that a fair proportion of
the total purchases and contracts or subcontracts for property and
services for California's high-speed rail system be placed with these
microbusinesses.
SEC. 2. Section 185034.1 is added to the
Public Utilities Code , to read:
185034.1. (a) The authority shall work with the Department of
General Services to identify essential components of, and adopt, a
small business program as part of contracts to be awarded by the
authority relative to the construction of the high-speed rail system.
The program may have separate elements for small businesses,
microbusinesses, and disabled veteran business enterprises, as those
terms are defined in subdivision (e). The program shall include
proper oversight of expenditure of state and federal funds,
contractor compliance monitoring and enforcement efforts, tracking
and reporting mechanisms, and prompt payment, reporting, and project
closeout provisions.
(b) In developing the small business program, the authority shall
do all of the following:
(1) Review and consider examples of existing small business
programs used by other public agencies in California.
(2) Establish a goal methodology to determine the appropriate
level of involvement of small businesses in authority contracts,
based on the likely nature of the work needed to be performed and the
likely ability of the small businesses to do that work.
(3) Provide three small business preferences, as follows:
(A) Provide a 5 percent bid preference to a responsible bid
meeting specifications that is submitted by a small business.
(B) Provide an incentive to nonsmall business bidders that submit
a responsible bid meeting specifications if the bid incorporates the
participation of small businesses in the manner consistent with the
goals set forth in the authority's program established pursuant to
this section. A nonsmall business bidder shall be granted a 5 percent
bid preference for meeting the goals.
(C) Grant an additional price preference or score of 2.5 percent
of the bid amount to qualified state-certified microbusinesses that
are local to a worksite.
(4) Establish, if determined to be desirable by the authority, a
prequalified list of contractors for certain types of authority
contracts, including, but not limited to, architectural and
engineering contracts.
(5) Include a plan for outreach, including information on training
and technical assistance that is available to assist small
businesses in understanding and bidding on contracts to be offered by
the authority. The authority shall specifically conduct a outreach
campaign that contacts certified small businesses listed in the
certification directories of the Department of General Services.
(c) The authority shall hold at least one public hearing on the
small business goal methodology required by paragraph (2) of
subdivision (b), and on the overall program developed pursuant to
this section. Following the public hearing, the authority shall adopt
the plan at a regularly scheduled meeting of the board. When
adopting the plan, the authority shall take into consideration
comments from the public hearing and written comments that it
receives in that regard, and any hearings the Legislature may hold
prior to adoption of the plan.
(d) Upon approval by the authority of the small business program,
its provisions shall be included in the design-build procurement for
Phase 1 and Phase 2 of the high-speed rail program and in the
environmental, architectural, and engineering stage for Phase 2 of
the high-speed rail program.
(e) As used in this section, the following terms have the
following meanings:
(1) "Disabled veteran business enterprise" means an enterprise
that has been certified as meeting the qualifications established by
subdivision (g) of Section 999 of the Military and Veterans Code.
(2) "Microbusiness" means a microbusiness as defined in paragraph
(2) of subdivision (d) of Section 14837 of the Government Code.
(3) "Small business" means a small business as defined in
paragraph (1) of subdivision (d) of Section 14837 of the Government
Code.
SECTION 1. Section 14838.1 of the Government
Code is amended to read:
14838.1. (a) In order to encourage the participation of small
businesses in the construction, alteration, demolition, repair, or
improvement, of the state's infrastructure, as provided in the
infrastructure-related bond acts of 2006 and 2008, each state agency
awarding contracts financed with the proceeds of these bonds shall do
all of the following:
(1) Establish a 25 percent small business participation goal in
all contracts financed with the proceeds of the
infrastructure-related bond acts of 2006 and 2008.
(2) Advertise all upcoming opportunities to bid on contracts for
projects funded by the infrastructure-related bond acts of 2006 and
2008, described in subdivision (c), in the California State Contracts
Register and include in the advertisement an Internet link to
information for prospective bidders, including, but not limited to,
general bidding procedures and how to properly prepare a bid for
those contracts.
(3) Provide information to California small businesses regarding
training and technical assistance that is available to assist these
small businesses in understanding and bidding on contracts for
projects funded by the infrastructure-related bond acts of 2006 and
2008, described in subdivision (c).
(b) For purposes of this section, "small business" has the same
meaning as set forth in subdivision (d) in Section 14837.
(c) For purposes of this section, all of the following measures
are deemed to be the infrastructure-related bond acts of 2006 and
2008:
(1) 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 the Government Code).
(2) The Housing and Emergency Shelter Trust Fund Act of 2006 (Part
12 (commencing with Section 53540) of Division 31 of the Health and
Safety Code).
(3) The Kindergarten-University Public Education Facilities Bond
Act of 2006 (Part 69 (commencing with Section 101000) of the
Education Code).
(4) The Disaster Preparedness and Flood Prevention Bond Act of
2006 (Chapter 1.699 (commencing with Section 5096.800) of Division 5
of the Public Resources Code).
(5) The Safe Drinking Water, Water Quality and Supply, Flood
Control, River and Coastal Protection Bond Act of 2006 (Division 43
(commencing with Section 75001) of the Public Resources Code).
(6) The Safe, Reliable High-Speed Passenger Train Bond Act for the
21st Century (Chapter 20 (commencing with Section 2704) of Division
3 of the Streets and Highways Code).
(d) For the purposes of this section, "state agency" includes each
agency provided for in Section 12800 and each state entity included
in Section 10335.7 of the Public Contract Code in which the head of
the agency is appointed by the Governor. For the purposes of this
section, "state agency" also includes the High-Speed Rail Authority
created pursuant to Section 185020 of the Public Utilities Code.
(e) This section does not require the expenditure of the proceeds
of the sale of the bonds described in this section, except as
permitted by the measure authorizing the issuance of the bond.
(f) On or before August 1, 2009, and annually thereafter, each
state agency that has awarded any contract financed with the proceeds
of the infrastructure-related bond acts of 2006 in the previous
fiscal year shall report to the Director of General Services
statistics comparing the small business and microbusiness
participation dollars for contracts funded by these bonds to the
total contract dollars for contracts funded by these bonds. The
High-Speed Rail Authority shall report, pursuant to this section, on
or before August 1, 2012, and annually thereafter, with respect to
the bond act described in paragraph (6) of subdivision (c). If an
agency did not meet its participation goal, then the agency shall
include in its report a plan of action to meet its participation goal
during the current fiscal year.