BILL ANALYSIS Ó
AB 2022
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ASSEMBLY THIRD READING
AB 2022 (Medina)
As Amended May 23, 2014
Majority vote
ADMINISTRATIVE REVIEW 9-1 ECONOMIC
DEVELOPMENT 5-1
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|Ayes:|Frazier, Achadjian, |Ayes:|Medina, Campos, Fong, |
| |Buchanan, | |Fox, |
| |Ian Calderon, Cooley, | |V. Manuel Pérez |
| |Medina, Olsen, | | |
| |Quirk-Silva, Salas | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Allen |Nays:|Mansoor |
| | | | |
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APPROPRIATIONS 13-4
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|Ayes:|Gatto, Bocanegra, |
| |Bradford, |
| |Ian Calderon, Campos, |
| |Eggman, Gomez, Holden, |
| |Linder, Pan, Quirk, |
| |Ridley-Thomas, Weber |
| | |
|-----+--------------------------|
|Nays:|Bigelow, Donnelly, Jones, |
| |Wagner |
| | |
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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
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in the state as determined by the Department of Finance
(Finance).
3)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) Veterans who served on active duty since September 11,
2001.
c) A person who has been convicted of a felony.
d) A person who receives benefits of the Supplemental
Nutrition Assistance Program.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the revised 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 around 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 50% increase in
administrative costs yields increased annual costs of $70,000.
COMMENTS : 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:
1)Economically disadvantaged youth.
2)Economically disadvantaged Vietnam-era veterans.
3)Economically disadvantaged ex-convicts.
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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.
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 United States 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. In response to these changes, Finance has
determined that contract tracts are a good policy substitute.
This bill would update the existing TACPA to reflect the new
distressed area census tracts as determined by Finance.
Analysis Prepared by : William Herms / A. & A.R. / (916)
319-3600
FN: 0003797
AB 2022
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