BILL ANALYSIS �
AB 650
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Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 650 (Nazarian) - As Amended: May 1, 2013
Policy Committee:
AccountabilityVote:12-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides statutory authority and parameters for the
Department of General Services' (DGS') Natural Gas Services
Program (NGSP), which the department has operated for 25 years.
Specifically, this bill:
1)Requires the state's executive branch agencies to use the NGSP
for non-core natural gas purchases.
2)Requires the Director of DGS to make the program available to
any local government entity and any nonprofit hospital or
educational institution that expends public funds.
3)Authorizes DGS to hire and appoint employees as required for
the program at competitive salaries, and requires the
director, prior to hiring someone at a salary in excess of a
salary approved by the Department of Human Resources, to
submit the salary to the Department of Finance for submission
to the Legislature consistent with the annual Budget Act.
4)Establishes the Natural Gas Services Program Account, and
continuously appropriates moneys in the account, and prohibits
the shifting from or borrowing of funds in the account.
FISCAL EFFECT
The consolidated purchasing program provides significant ongoing
savings (General Fund, numerous special funds, and to local
agency funds) of at least several million dollars annually in
reduced natural gas contract costs and streamlined
administrative costs. In addition, providing continuous
AB 650
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appropriation authority for the funds used to pay natural gas
purchasing contracts provides more certainty to vendors and help
to minimize contract costs.
COMMENTS
Background and Purpose . DGS currently provides natural gas
delivery to nine executive agency departments, eight University
of California campuses, 21 California State University campuses,
13 community college districts, 15 counties, 11 cities, and 16
special districts. Total gas delivered through the program in
2012-13 was valued at more than $180 million. While the NGS
program has operated under DGS' general purchasing authority for
more than two decades, the department is seeking to clarify
program authority and parameters within the Public Contract
Code. According to DGS, this will add credibility and stability
as NGS seeks future contracts to purchase and sell natural gas.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081