AB 650, as amended, Nazarian. State government: general services: 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, or other local governmental body, and to nonprofit hospitals and educational institutions that expend 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, except the Department of Water Resources, 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 Fund, and would continuously appropriate that fund to the department for purposes of operating the Natural Gas Services Program.
Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 10299.1 is added to the Public Contract
2Code, to read:
(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,
14and to any nonprofit hospital or educational institution that expends
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.
P3 1(4) The department may enter into gas purchase transactions
2for a term longer than five years, if specifically approved by the
4(5) The program shall adjust to changes in customer
5requirements and market conditions and create and manage an
6ongoing pool of gas suppliers.
7(6) The department is authorized to provide additional services
8to customers related to the environmental aspects of energy use
9and the requirements related to greenhouse gas regulations,
10renewable energy requirements, and similar programs and
12(7) Notwithstanding any other law, the department is not
13required to include in contracts or other agreements for the
14purchase of natural gas and related services entered into pursuant
15to this section disabled veteran business enterprise requirements,
16unless the department determines that the application of those
17provisions is necessary to accomplish the purposes of this section.
18(c) Agencies that are in the executive branch of the state
19government, except the Department of Water Resources, shall use
20the department’s natural gas program for noncore gas purchases
21of natural gas to ensure maximum participation resulting in the
22best discounts and prices for the commodity. The Director of
23General Services may allow exemptions to this requirement.
24(d) The department may hire and appoint employees as required
25for this program, at salary levels determined by the director to be
26competitive to attract and retain persons with the necessary
27expertise and skills. Prior to hiring or appointing an employee at
28a salary in excess of a salary approved by the Department of
29Human Resources (CalHR), the director shall submit a proposed
30salary to the Director of Finance who shall submit it to the
31Legislature in accordance with the annual Budget Act.
32(e) For purposes of this section, “natural gas” includes, but is
33not limited to, natural gas, methane, biomethane, compressed
34natural gas, liquefied natural gas, and other energy commodity
35that is similar to natural gas, and related services, including, but
36not limited to, gas storage, gas transportation, and forward
37purchases of natural gas.
38(f) During any period in which a Budget Act has not been
39approved, the department shall continue to receive payment
40transfers from agencies that are not in the executive branch of the
P4 1state government and agencies that are in the executive branch of
2state government that are able to pay because they operate with
3funds that are continuously appropriated.
4(g) The department is authorized to charge, collect, and hold
5funds from a customer that voluntarily requests prepaid long-term
6natural gas supplies, for a period not to exceed 20 years.
7(h) The Department of General Services Natural Gas Services
8Program Fund is hereby established in the State Treasury.
9Notwithstanding Section 13340 of the Government Code, the fund
10is hereby continuously appropriated to the department without
11regard to fiscal year, for the purposes of operating the Natural Gas
13(1) All revenues payable to the department for natural gas and
14related services shall be deposited in this fund. Any payments from
15this fund shall only be made for those purposes described in and
16consistent with this section.
17(2) The Natural Gas Services Program’s customer fee revenues
18 cannot be shifted or borrowed from the fund.
19(3) If at the end of any fiscal year, there are unexpended
20 revenues, those revenues shall be retained in the fund and reserved
21for future Natural Gas Services Program expenses.