BILL ANALYSIS Ó
AB 2022
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2022 (Medina) - As Amended: May 1, 2014
Policy Committee:
AccountabilityVote:9-1
Jobs 5-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, with respect to providing bid preferences under the
Target Area Contract Preference Act (TACPA), redefines an
economically distressed area and persons at a high risk of
unemployment. Specifically, this bill:
1)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 (DOF).
If a designated census tract is predominantly residential, an
immediately adjacent census tract that is commercial or
industrial would also be considered a distressed area.
2)Redefines a person with a high risk of unemployment to
include, but not be limited to:
a) A person who is currently unemployed and has been
unemployed for more than 200 days.
b) A person who has been unemployed for greater than 200
days within the last 365 days.
c) Veterans who served on active duty since September 11,
2001.
d) A person who has been incarcerated.
e) A person who receives benefits of the Supplemental
Nutrition Assistance Program.
FISCAL EFFECT
The revised definition of distressed area would expand the
eligible areas, and thus the pool of firms, eligible for a
worksite bid preference under TACPA. Likewise, the revised
AB 2022
Page 2
definition of persons with a high risk of unemployment would
increase the likelihood of companies being able to also take
advantage of a workforce bidding preference. The cost of the
TACPA bid preference over the last four years has averaged
$110,000, and the Department of General Services has reviewed
about 40 TACPA applications annually during this time at an
administrative cost of around $140,000. DGS notes that the new
parameters for the hiring credit would require extensive
substantiation of applications. The potential impact of this
bill is unknown, but assuming a doubling of the bid preference
costs and a 50% increase in administrative costs yields
increased annual costs of $180,000.
COMMENTS
1)Background . TACPA, which was enacted in 1983 promotes
employment and economic development at designated distressed
areas by offering workforce bidding preferences in specified
state contracts. Specifically, current law authorizes the
Department of General Services (DGS) to apply TACPA to bids
from businesses agreeing to perform the contract work in such
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.
2)Purpose . According to the author, "When applying for TACPA
eligibility, bidders must identify specific criteria including
"census tract" and "block groups" to be eligible for the
preference. Changes in the type of information collected in
the last Census have not only made data collection more time
consuming and expensive to obtain, it has also rendered the
existing TACPA unworkable, therefore, the Department of
General Services has stopped considering TACP preference in
evaluating bids."
This bill updates the TACPA geographic regions to those areas
that the DOF designates as having the highest combined levels
of poverty and unemployment in the state. This is similar to
those areas designated last year for the New Hire Credit
enacted as part of AB 93 (Assembly Budget)/Statutes of 2013.
The bill also updates the categories of targeted workers to
reflect among other groups, veterans who have served on active
duty since September 11, 2001.
3)Related Legislation . AB 2278 (Weber), also on today's
AB 2022
Page 3
committee agenda, in part increases the maximum amount of a
bid preference for TACPA from $50,000 to $350,000, but keeps
the maximum preference at 5% of the bid amount.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081