Amended in Senate August 26, 2013

Amended in Senate August 15, 2013

Amended in Senate June 19, 2013

Amended in Senate June 4, 2013

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: 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 would 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 would 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 Services Program for noncore gas purchases of natural gas.begin delete The bill would authorize the department to hire employees as required for this program.end delete 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. The bill would state that funding for the department’s administrative costs in overseeing the program is to be provided for in the annual Budget Act.

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,
14and to any nonprofit hospital or educational institution that expends
15public 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.

P3    1(3) The department may buy, sell, exchange, transfer, or
2otherwise dispose of natural gas acquired by the department
3pursuant to this section, and may recover the department’s
4acquisition and other costs to operate the program through customer
5charges or fees.

6(4) The department may enter into gas purchase transactions
7for a term longer than five years, if specifically approved by the
8director.

9(5) The program shall adjust to changes in customer
10requirements and market conditions and create and manage an
11ongoing pool of gas suppliers.

12(6) The department is authorized to provide additional services
13to customers related to the environmental aspects of energy use
14and the requirements related to greenhouse gas regulations,
15renewable energy requirements, and similar programs and
16requirements.

17(c) Agencies that are in the executive branch of the state
18government, except the Department of Water Resources, shall use
19the department’s Natural Gas Services Program for noncore gas
20purchases of natural gas to ensure maximum participation resulting
21in the best discounts and prices for the commodity. The director
22may allow exemptions to this requirement.

begin delete

23(d) The department may hire and appoint employees as required
24for this program, at salary levels determined by the director to be
25competitive to attract and retain persons with the necessary
26expertise and skills. Prior to hiring or appointing an employee at
27a salary in excess of a salary approved by the Department of
28Human Resources (CalHR), the director shall submit a proposed
29salary to the Director of Finance who shall submit it to the
30Legislature in accordance with the annual Budget Act.

end delete
begin delete

32 31(e)

end delete

32begin insert(d)end insert 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.

begin delete

38 38(f)

end delete

39begin insert(e)end insert During any period in which a Budget Act has not been
40approved, the department shall continue to receive payment
P4    1transfers from agencies that are not in the executive branch of the
2state government and agencies that are in the executive branch of
3state government that are able to pay because they operate with
4funds that are continuously appropriated.

begin delete

4 5(g)

end delete

6begin insert(f)end insert The department is authorized to charge, collect, and hold
7funds from a customer that voluntarily requests prepaid long-term
8natural gas supplies, for a period not to exceed 20 years.

begin delete

7 9(h)

end delete

10begin insert(g)end insert The Department of General Services Natural Gas Services
11Program Fund is hereby established in the State Treasury.
12Notwithstanding Section 13340 of the Government Code, the fund
13is hereby continuously appropriated to the department without
14regard to fiscal year, for the purposes of operating the Natural Gas
15Services Program.

16(1) All revenues payable to the department for natural gas and
17related services shall be deposited in this fund. Any payments from
18this fund shall only be made for those purposes described in and
19consistent with this section.

20(2) The Natural Gas Services Program’s customer fee revenues
21 cannot be shifted or borrowed from the fund.

22(3) If at the end of any fiscal year, there are unexpended
23revenues, those revenues shall be retained in the fund and reserved
24for future Natural Gas Services Program expenses.

begin delete

22 25(i)

end delete

26begin insert(h)end insert Funding for the costs incurred by the department in
27administering this section shall be provided for in the annual
28Budget Act.



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