BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 44
                                                                  Page  1

          Date of Hearing:   April 10, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 44 (Buchanan) - As Amended:  April 4, 2013 

          Policy Committee:                              B&P  Vote:13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill requires a prime contractor, when submitting bids for  
          any state or local government public works project, to list the  
          contractor license number for each subcontractor to perform work  
          on that project. This requirement will apply to bids received on  
          and after July 1, 2014.

           FISCAL EFFECT  

          Negligible costs for public entities to conform bid documents to  
          the new requirement, more than offset by increased efficiencies  
          in the contract award process due to the ready availability of  
          subcontractor license numbers for more easy verification by  
          awarding agencies.

           COMMENTS  

           1)Background  . Current law requires prime contractors bidding on  
            state and local public works projects to list the name and  
            business location of subcontractors providing labor or  
            services equivalent to more than 0.5% of the prime  
            contractor's total bid amount. Prior to awarding a public  
            works contract, a state or local entity reviewing bids must  
            verify that the prime contractor and subcontractors each hold  
            active contractor licenses in good standing with the  
            Contractors' State License Board (CSLB).  

            Public entities currently verify a subcontractor's license  
            status by performing a search on the CSLB's online contractor  
            database using the subcontractor's name and address, as  
            submitted with the bid documents, which can result in numerous  
            possibilities that must be further narrowed. In addition, the  








                                                                  AB 44
                                                                  Page  2

            subcontractor information may be handwritten and thus  
            difficult to read.

           2)Purpose  . The author believes, if the bid documents were to  
            include each subcontractor's unique state license number, as  
            required by AB 44, this verification process would be  
            simplified, thus improving the efficiency of awarding public  
            works contracts. The bill's sponsor-the Northern California  
            Carpenters Regional Council-argues the bill will create a more  
            fair and transparent bidding process.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081