BILL ANALYSIS Ó
AB 2022
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Date of Hearing: March 26, 2014
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
AB 2022 (Medina) - As Introduced: February 20, 2014
SUBJECT : Public contracts: Target Area Contract Preference Act
SUMMARY : Makes changes to the Target Area Contract Preference
Act (TACPA), redefining what qualifies as an economically
distressed area and identifying those individuals or groups at a
high risk of unemployment. Specifically, this bill :
1)Increases the dollar threshold of contracts eligible to
participate in TACPA to $250,000.
2)Redefines a distressed area to be in the top quartile of
census tracts for having the highest unemployment and poverty
in the state as defined by the Department of Finance
(Finance).
3)Redefines a person with a high risk of unemployment to
include, but not be limited to:
i) A person who is currently unemployed and has been
unemployed for more than 200 days.
ii) A person who has been unemployed for greater than
200 days within the last 365 days.
iii) Veterans who served on active duty since September
11, 2001.
iv) A person who has been incarcerated.
v) A person who receives benefits of the Supplemental
Nutrition Assistance Program.
EXISTING LAW states Legislative intent that it is a benefit to
the state to encourage and facilitate job maintenance and
development in distressed and declining areas of cities and
towns in California (Government Code 4531). Currently, TACPA
promotes employment and economic development at designated
"distressed areas" by offering 5% worksite and 1% to 4%
workforce bidding preferences in specified state service and
commodity contracts valued in excess of $100,000.
Current persons defined within eligible groups include, but are
not limited to:
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1)Economically disadvantaged youth.
2)Economically disadvantaged Vietnam-era veterans.
3)Economically disadvantaged ex-convicts.
4)Vocational rehabilitation referrals.
5)Youth participating in a qualified cooperative education
program.
6)Recipients of supplemental security income benefits.
7)General assistance recipients.
Preferences only apply to bidders who are California based
firms, and only when the lowest responsible bid and resulting
contract exceeds $100,000. Bidders must certify, under penalty
of perjury to perform either 50% (for community contracts) or
90% (for labor service contracts) of the labor hours in the
eligible TACPA area worksite(s). TACPA work sites may be in,
directly adjacent to, or form a contiguous boundary with the
distressed area.
TACPA preferences are limited to 9% or a maximum of $50,000 per
bid. In combination with any other preferences, the maximum
limit is 15% of the lowest responsible bid; and, in no case more
than $100,000 per bid. The TACPA preferences do not apply to
contracts where the worksite is fixed by the contract terms.
FISCAL EFFECT : Unknown
COMMENTS : According to the author's office, small businesses
are the backbone of our economy and it is imperative that they
continue to thrive. The purpose of TACPA is to stimulate
economic growth and employment opportunities in designated
"distressed areas" throughout the state of California. Small
businesses located in these areas often need all available
preferences in order to compete with larger businesses for state
contracts.
According to the Governor's Office of Planning and Research,
starting in 2010, the U.S. census Bureau stopped collecting data
at the level needed to determine TACPA covered areas. These
changes in the type of information collected in the designated
census have rendered the existing TACPA unworkable. Due to
this, the Department of General Services has stopped considering
TACPA preferences in evaluating bids.
In response to the changes to the type of information collected
in designated census, Finance has determined that contract
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tracts are a good policy substitute. This bill would update the
existing TACPA to reflect the new distressed area census tracts
that are to be determined by Finance.
REGISTERED SUPPORT / OPPOSITION :
Support
California Asian Pacific Chamber of Commerce
Opposition
None on file.
Analysis Prepared by : William Herms / A. & A.R. / (916)
319-3600