BILL ANALYSIS Ó AB 1705 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1705 (Williams) As Amended August 11, 2014 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |74-0 |(May 5, 2014) |SENATE: |35-0 |(August 14, | | | | | | |2014) | ----------------------------------------------------------------- Original Committee Reference: A. & A.R. SUMMARY : Clarifies the circumstances under which a public agency may retain more than 5% of a contract price until final completion of a substantially complex public works project. The Senate amendments : 1)Require any finding by a public entity that a project is substantially complex to include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the entity or licensed contractors. 2)Extend the sunset date on existing law governing public agencies' retention requirements from January 1, 2016, to January 1, 2018. FISCAL EFFECT : None COMMENTS : Pursuant to SB 293 (Padilla), Chapter 700, Statutes of 2011, the maximum amount of money that public agencies can withhold from a contractor prior to completion of the job is 5% of the total contract. However, public agencies may retain a higher percentage if the agency, after a proper hearing, finds a project to be "substantially complex," provided that the finding itself and the actual retention amount are included in the bid documents. This bill requires an explanation of the basis for the finding to be included in the bid documents and requires local agencies specifically to approve a substantially complex finding on a project by project basis. Senate amendments remove provisions defining what does not constitute a substantially complex project, and instead, require additional information to be included when a substantially AB 1705 Page 2 complex finding is made. The Senate amendments also provide a two-year, rather than four-year, extension of the sunset date on existing law governing retention proceeds. Analysis Prepared by : Cassie Royce / A. & A.R. / (916) 319-3600 FN: 0004590