Amended in Assembly May 1, 2013

Amended in Assembly March 20, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 650


Introduced by Assembly Member Nazarian

February 21, 2013


An act to add Section 10299.1 to the Public Contract Code, relating to state government, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 650, as amended, Nazarian. State government: general services:begin delete theend delete Natural Gas Services Program.

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

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,begin insert orend insert other local governmental body,begin delete or corporation empowered to expendend deletebegin insert and to nonprofit hospitals and educational institutions that expendend insert public funds, and shall enter into interagency agreements for acquisition of natural gas and related services, as defined.

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 Programbegin delete Account which would be continuously appropriatedend deletebegin insert Fund, and would continuously appropriate that fundend insert to the department for purposes of operating the Natural Gas Services Program.

Vote: 23. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 10299.1 is added to the Public Contract
2Code
, to read:

3

10299.1.  

(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, begin delete14 or any corporation empowered to expendend delete begin insert and to any nonprofit
15hospital or educational institution that expendsend insert
public funds.

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

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
28acquisition and other costs to operate the program through customer
29charges or fees.

30(4) The department may enter into gas purchase transactions
31for a term longer than five years, if specifically approved by the
32director.

P3    1(5) The program shall adjust to changes in customer
2requirements and market conditions and create and manage an
3ongoing pool of gas suppliers.

4(6) The department is authorized to provide additional services
5to customers related to the environmental aspects of energy use
6and the requirements related to greenhouse gas regulations,
7renewable energy requirements, and similar programs and
8requirements.

9(7) Notwithstanding any other law, the department is not
10required to include in contracts or other agreements for the
11purchase of natural gas and related services entered into pursuant
12to this section disabled veteran business enterprise requirements,
13unless the department determines that the application of those
14provisions is necessary to accomplish the purposes of this section.

15(c) Agencies that are in the executive branch of the state
16government shall use the department’s natural gas program for
17noncore gas purchases of natural gas to ensure maximum
18participation resulting in the best discounts and prices for the
19commodity. The Director of General Services may allow
20exemptions to this requirement.

21(d) The department may hire and appoint employees as required
22for this program, at salary levels determined by the director to be
23competitive to attract and retain persons with the necessary
24expertise and skills. Prior to hiring or appointing an employee at
25a salary in excess of a salary approved by the Department of
26Human Resources (CalHR), the director shall submit a proposed
27salary to the Director of Finance who shall submit it to the
28Legislature in accordance with the annual Budget Act.

29(e) For purposes of this section, “natural gas” includes, but is
30not limited to, natural gas, methane, biomethane, compressed
31natural gas, liquefied natural gas, and other energy commodity
32that is similar to natural gas, and related services, including, but
33not limited to, gas storage, gas transportation, and forward
34purchases of natural gas.

35(f) During any period in which a Budget Act has not been
36approved, the department shall continue to receive payment
37transfers from agencies that are not in the executive branch of the
38state government and agencies that are in the executive branch of
39state government that are able to pay because they operate with
40funds that are continuously appropriated.begin delete The department is
P4    1specifically authorized to pay program vendors when the Budget
2Act is delayed.end delete

3(g) The department is authorized to charge, collect, and hold
4funds from a customer that voluntarily requests prepaid long-term
5natural gas supplies, for a period not to exceed 20 years.

6(h) The Department of General Services Natural Gas Services
7Programbegin delete Accountend deletebegin insert Fundend insert is hereby established in the State Treasurybegin delete,
8funds from which are to beend delete
begin insert. Notwithstanding Section 13340 of the
9Government Code, the fund is herebyend insert
continuously appropriated
10to the department without regard to fiscal year, for the purposes
11of operating the Natural Gas Services Program.

12(1) All revenues payable to the department for natural gas and
13related services shall be deposited in thisbegin delete accountend deletebegin insert fundend insert. Any
14payments from thisbegin delete accountend deletebegin insert fundend insert shall only be made for those
15purposes described in and consistent with this section.

16(2) The Natural Gas Services Program’s customer fee revenues
17 cannot be shifted or borrowed from thebegin delete accountend deletebegin insert fundend insert.

18(3) If at the end of any fiscal year, there are unexpended
19revenues, those revenues shall be retained in thebegin delete accountend deletebegin insert fundend insert and
20reserved for future Natural Gas Services Program expenses.



O

    97