Amended in Assembly March 20, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 650


Introduced by Assembly Member Nazarian

February 21, 2013


begin deleteAn act to amend Section 10101 of the Public Contract Code, relating to public contracts. end deletebegin insertAn act to add Section 10299.1 to the Public Contract Code, relating to state government, and making an appropriation therefor.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 650, as amended, Nazarian. begin deleteState Contract Act: exemptions. end deletebegin insertState government: general services: the Natural Gas Services Program.end insert

begin insert

Existing law authorizes the Department of General Services to contract with suppliers to obtain materials, supplies, equipment, and services.

end insert
begin insert

This bill would require the director to operate the Natural Gas Services Program, pursuant to which the Director of General Services shall make the services of the department with respect to the acquisition of natural gas and related services available, under agreed upon terms and conditions, to any city, county, city and county, district, other local governmental body, or corporation empowered to expend public funds, and shall enter into interagency agreements for acquisition of natural gas and related services, as defined.

end insert
begin insert

The bill would require agencies that are in the executive branch of state government to use the department’s natural gas program for noncore gas purchases of natural gas. The bill would authorize the department to hire employees as required for this program. The bill would create the Department of General Services Natural Gas Services Program Account which would be continuously appropriated to the department for purposes of operating the Natural Gas Services Program.

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The State Contract Act prescribes the procedures and requirements applicable to various state agency contracts, and exempts from these procedures and requirements specified contracts for which emergency work or remedial measures are required related to the accidental or unplanned release of toxic substances.

end delete
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This bill would make nonsubstantive changes to these provisions.

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Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 10299.1 is added to the end insertbegin insertPublic Contract
2Code
end insert
begin insert, to read:end insert

begin insert
3

begin insert10299.1.end insert  

(a) Notwithstanding any other law, the director shall
4operate the Natural Gas Services Program to consolidate and
5address the needs of multiple state agencies for the procurement
6of natural gas and related services.

7(b) Procurement of natural gas and related services is vital to
8public sector facilities in California and, due to the volumes and
9costs involved, this section authorizes the following:

10(1)  The director shall make the services of the department with
11respect to the acquisition of natural gas and related services
12available, under agreed upon terms and conditions, to any city,
13county, city and county, district, or other local governmental body,
14or any corporation empowered to expend public funds.

15(2) The department is authorized to enter into interagency
16agreements with the entities listed in paragraph (1) for the
17acquisition of natural gas and related services. The department
18may enter into contracts, master agreements, multiple award
19schedules, cooperative agreements, agreements with entities
20outside the state, and other types of agreements that leverage the
21state’s buying power through the use of a competitive bidding
22process. The state shall not incur financial responsibility in
23connection with the contracting of nonstate agencies under this
24section.

25(3) The department may buy, sell, exchange, transfer, or
26otherwise dispose of natural gas acquired by the department
27pursuant to this section, and may recover the department’s
P3    1acquisition and other costs to operate the program through
2customer charges or fees.

3(4) The department may enter into gas purchase transactions
4for a term longer than five years, if specifically approved by the
5director.

6(5) The program shall adjust to changes in customer
7requirements and market conditions and create and manage an
8ongoing pool of gas suppliers.

9(6) The department is authorized to provide additional services
10to customers related to the environmental aspects of energy use
11and the requirements related to greenhouse gas regulations,
12renewable energy requirements, and similar programs and
13requirements.

14(7) Notwithstanding any other law, the department is not
15required to include in contracts or other agreements for the
16purchase of natural gas and related services entered into pursuant
17to this section disabled veteran business enterprise requirements,
18unless the department determines that the application of those
19provisions is necessary to accomplish the purposes of this section.

20(c) Agencies that are in the executive branch of the state
21government shall use the department’s natural gas program for
22noncore gas purchases of natural gas to ensure maximum
23participation resulting in the best discounts and prices for the
24commodity. The Director of General Services may allow
25exemptions to this requirement.

26(d) The department may hire and appoint employees as required
27for this program, at salary levels determined by the director to be
28competitive to attract and retain persons with the necessary
29expertise and skills. Prior to hiring or appointing an employee at
30a salary in excess of a salary approved by the Department of
31Human Resources (CalHR), the director shall submit a proposed
32salary to the Director of Finance who shall submit it to the
33Legislature in accordance with the annual Budget Act.

34(e) For purposes of this section, “natural gas” includes, but is
35not limited to, natural gas, methane, biomethane, compressed
36natural gas, liquefied natural gas, and other energy commodity
37that is similar to natural gas, and related services, including, but
38not limited to, gas storage, gas transportation, and forward
39purchases of natural gas.

P4    1(f) During any period in which a Budget Act has not been
2approved, the department shall continue to receive payment
3transfers from agencies that are not in the executive branch of the
4state government and agencies that are in the executive branch of
5state government that are able to pay because they operate with
6funds that are continuously appropriated. The department is
7specifically authorized to pay program vendors when the Budget
8Act is delayed.

9(g) The department is authorized to charge, collect, and hold
10funds from a customer that voluntarily requests prepaid long-term
11natural gas supplies, for a period not to exceed 20 years.

12(h) The Department of General Services Natural Gas Services
13Program Account is hereby established in the State Treasury, funds
14from which are to be continuously appropriated to the department
15without regard to fiscal year, for the purposes of operating the
16Natural Gas Services Program.

17(1) All revenues payable to the department for natural gas and
18related services shall be deposited in this account. Any payments
19from this account shall only be made for those purposes described
20in and consistent with this section.

21(2) The Natural Gas Services Program’s customer fee revenues
22 cannot be shifted or borrowed from the account.

23(3) If at the end of any fiscal year, there are unexpended
24revenues, those revenues shall be retained in the account and
25reserved for future Natural Gas Services Program expenses.

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26

SECTION 1.  

Section 10101 of the Public Contract Code is
27amended to read:

28

10101.  

(a) Contracts for the purchase of supplies or materials,
29which are purchased pursuant to Chapter 2 (commencing with
30Section 10290), are not subject to this chapter, even though the
31seller is required to perform some incidental work or service in
32connection with the delivery of the material or supplies.

33(b) Contracts for which emergency work or remedial measures
34are required are not subject to this chapter if the work or remedial
35measures are necessary in order to immediately avert, alleviate,
36repair, or mitigate destruction of property caused by the accidental
37or unplanned release of toxic substances and are necessary in order
38 to protect the health, safety, and welfare of the general public.

end delete


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