Senate BillNo. 124


Introduced by Senator Corbett

January 18, 2013


An act to amend Sections 4217.11 and 4217.16 of the Government Code, and to add Section 10780.6 to, and to add Article 7 (commencing with Section 10390) to Chapter 2 of Part 2 of Division 2 of, the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 124, as introduced, Corbett. Public contracts: bid preferences: clean energy.

Existing law imposes various requirements with respect to contracting by state agencies and the Trustees of the California State University. Existing law requires state agencies and to the Trustees of the California State University to use a competitive bidding process when contracting for goods and services. However, existing law allows a public agency to award an energy service contract if the governing body determines it is in the best interest of the agency and costs will be reduced, as specified.

This bill would require state agencies and the Trustees of the California State University that accept bids or proposals for a contract for the purchase or installation of a clean energy device, technology, or system, as defined, to provide a 5% preference to a bidder that certifies that all of the parts of the clean energy device, technology, or system to be installed have been manufactured or assembled in the state, in accordance with specified criteria. This bill would authorize a public agency, including, but not limited to, the Trustees of the California State University, to award a contract based on the fact that a clean energy device, technology, or system was manufactured or assembled in the state if the contract is an energy service contract determined to be in the best interest of the public agency.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) California faces the most severe economic downturn since
4the Great Depression. Over two million Californians are out of
5work, and California’s unemployment rate is one of the highest in
6the nation.

7(b) At a time of scarce state resources, state purchases should
8be used to stimulate our state economy and put people back to
9work.

10(c) The Green Building Executive Order (S-20-04) mandated
11that state agencies evaluate the merits of using clean and renewable
12onsite energy generation technologies in all new building or large
13renovation projects.

14(d) California has several companies that manufacture clean
15energy devices, technology, and systems in the state, employing
16Californians and helping our economy.

17(e) California is the nation’s largest clean economy. More than
1812,000 clean technology companies call California home and are
19creating jobs at nearly 10 times the rate of the state’s other
20industries. A number of these companies have developed novel
21technologies, and it is in the interest of the state to incentivize these
22companies to establish and grow manufacturing operations within
23the state. This will create both construction and permanent
24manufacturing jobs in California.

25(f) It is the intent of the Legislature that a preference should be
26allowed for clean energy devices, technology, and systems
27manufactured in California.

28

SEC. 2.  

Section 4217.11 of the Government Code is amended
29to read:

30

4217.11.  

The following terms, whenever used in this chapter,
31have the meanings given in this section, except where the context
32clearly indicates otherwise:

P3    1(a) “Alternate energy equipment” means equipment for the
2production or conversion of energy from alternate sources as its
3primary fuel source, such as solar, biomass, wind, geothermal,
4hydroelectricity under 30 megawatts, remote natural gas of less
5than one billion cubic feet estimated reserves per mile from an
6existing gas gathering line, natural gas containing 850 or fewer
7British Thermal Units per standard cubic foot, or any other source
8of energy, the efficient use of which will reduce the use of fossil
9or nuclear fuels.

begin insert

10(b) (1) “Clean energy device, technology, or system” means
11the following:

end insert
begin insert

12(A) A device, technology, or system that contributes to improved
13energy management or efficiency.

end insert
begin insert

14(B) Ultralow-emission equipment for energy generation based
15on thermal energy systems, including, but not limited to, natural
16gas turbines and fuel cells.

end insert
begin insert

17(C) A device, technology, or system that conserves or produces
18heat, processes heat, space heating, water heating, steam, space
19cooling, refrigeration, mechanical energy, electricity, or in any
20form convertible to these uses, that does not expend or use
21conventional energy fuels, and that uses any of the following
22electrical generation technologies:

end insert
begin insert

23(i) Biomass.

end insert
begin insert

24(ii) Solar thermal.

end insert
begin insert

25(iii) Photovoltaic.

end insert
begin insert

26(iv) Wind.

end insert
begin insert

27(v) Geothermal.

end insert
begin insert

28(2) For the purposes of this subdivision, “conventional energy
29fuel” means any fuel derived from petroleum deposits, including,
30but not limited to, oil, heating oil, gasoline, fuel oil, or natural
31gas, including liquefied natural gas or nuclear fissionable
32materials.

end insert
begin delete

33(b)

end delete

34begin insert(c)end insert “Cogeneration equipment” means equipment for
35cogeneration, as defined in Section 216.6 of the Public Utilities
36Code.

begin delete

37(c)

end delete

38begin insert(d)end insert “Conservation measures” means equipment, maintenance,
39load management techniques and equipment, or other measures
40to reduce energy use or make for a more efficient use of energy.

begin delete

P4    1(d)

end delete

2begin insert(e)end insert “Conservation services” means the electrical, thermal, or
3other energy savings resulting from conservation measures, which
4shall be treated as a supply of such energy.

begin delete

5(e)

end delete

6begin insert(f)end insert “Energy conservation facility” means alternate energy
7equipment, cogeneration equipment, or conservation measures
8located in public buildings or on land owned by public agencies.

begin delete

9(f)

end delete

10begin insert(g)end insert “Energy service contract” means a contract entered into by
11a public agency with any person, pursuant to which the person will
12provide electrical or thermal energy or conservation services to a
13public agency from an energy conservation facility.

begin delete

14(g)

end delete

15begin insert(h)end insert “Facility financing contract” means a contract entered into
16by a public agency with any person whereby the person provides
17financing for an energy conservation facility in exchange for
18repayment of the financing and all costs and expenses related
19thereto by the public agency. A facility financing contract may
20provide for the person with whom the public agency contracts to
21provide any combination of feasibility studies for, and design and
22construction of, all or part of the energy conservation facility in
23addition to the financing and other related services, and may
24provide for an installment sale purchase, another form of purchase,
25or amortized lease of the energy conservation facility by the public
26agency.

begin delete

27(h)

end delete

28begin insert(i)end insert “Facility ground lease” means a lease of all, or any portion
29of, land or a public building owned by, or under lease to, a public
30agency to a person in conjunction with an energy service contract
31or a facility financing contract. A facility ground lease may include,
32in addition to the land on which energy conservation facilities will
33be located, easements, rights-of-way, licenses, and rights of access,
34for the construction, use, or ownership by the person of the facility
35and all related utility lines not owned or controlled by the
36interconnecting utility, and offsite improvements related thereto.
37A facility ground lease may also include the addition or
38improvement of utility lines and equipment owned by the
39interconnecting utility which are necessary to permit
P5    1interconnection between that utility and an energy conservation
2facility.

begin delete

3(i)

end delete

4begin insert(j)end insert “Person” means, but is not limited to, any individual,
5company, corporation, partnership, limited liability company,
6public agency, association, proprietorship, trust, joint venture, or
7other entity or group of entities.

begin delete

8(j)

end delete

9begin insert(k)end insert “Public agency” means the state, a county, city and county,
10city, district, community college district, school district,begin insert California end insert
11begin insertState University,end insert joint powers authority or other entity designated
12or created by a political subdivision relating to energy development
13projects, and any other political subdivision or public corporation
14in the state.

begin delete

15(k)

end delete

16begin insert(l)end insert “Public building” includes any structure, building, facility,
17or work which a public agency is authorized to construct or use,
18and automobile parking lots, landscaping, and other facilities,
19including furnishings and equipment, incidental to the use of any
20structure, building, facility, or work, and also includes the site
21thereof, and any easements, rights-of-way appurtenant thereto, or
22necessary for its full use.

23

SEC. 3.  

Section 4217.16 of the Government Code is amended
24to read:

25

4217.16.  

Prior to awarding or entering into an agreement or
26lease, the public agency may request proposals from qualified
27persons. After evaluating the proposals, the public agency may
28award the contract on the basis of the experience of the contractor,
29the type of technology employed by the contractor, the cost to the
30local agency,begin insert whether the clean energy device or technology is end insert
31begin insertmanufactured or assembled in California,end insert and any other relevant
32considerations. The public agency may utilize the pool of qualified
33energy service companies established pursuant to Section 388 of
34the Public Utilities Code and the procedures contained in that
35section in awarding the contract.

36

SEC. 4.  

Article 7 (commencing with Section 10390) is added
37to Chapter 2 of Part 2 of Division 2 of the Public Contract Code,
38to read:

 

P6    1Article 7.  Preference for California-Manufactured Clean Energy
2Devices, Technology, and Systems
3

 

4

10390.  

For the purposes of this article:

5(a) (1) “Clean energy device, technology, or system” means
6the following:

7(A) A device, technology, or system that contributes to improved
8energy management or efficiency.

9(B) Ultralow-emission equipment for energy generation based
10on thermal energy systems, including, but not limited to, natural
11gas turbines and fuel cells.

12(C) A device, technology, or system that conserves or produces
13heat, processes heat, space heating, water heating, steam, space
14cooling, refrigeration, mechanical energy, electricity, or in any
15form convertible to these uses, that does not expend or use
16conventional energy fuels, and that uses any of the following
17electrical generation technologies:

18(i) Biomass.

19(ii) Solar thermal.

20(iii) Photovoltaic.

21(iv) Wind.

22(v) Geothermal.

23(2) For the purposes of this subdivision, “conventional energy
24fuel” means any fuel derived from petroleum deposits, including,
25but not limited to, oil, heating oil, gasoline, fuel oil, or natural gas,
26including liquefied natural gas or nuclear fissionable materials.

27(b) “Power purchase agreement” means a financial arrangement
28in which a third-party developer owns, operates, and maintains a
29clean energy device, technology, or system, and a state agency
30agrees to site the device, technology, or system on its roof or
31elsewhere on its property and purchases the device, technology,
32or system’s electric output, not the device, technology, or system
33itself, from the third-party developer for a predetermined period
34of time.

35

10391.  

(a) A state agency that accepts bids or proposals for a
36contract for the purchase or installation of a clean energy device,
37technology, or system through a power purchase agreement or a
38direct purchase shall provide a preference of 5 percent to a bidder
39that certifies that all of the parts of the clean energy device,
P7    1technology, or system to be installed have been manufactured or
2assembled in this state. The preference shall be provided as follows:

3(1) For solicitations to be awarded to the lowest responsible
4bidder meeting specifications, the preference to a bidder that
5certifies that all of the parts of the clean energy device, technology,
6or system to be installed have been manufactured or assembled in
7this state shall be 5 percent of the bid price of the lowest
8responsible bidder meeting specifications.

9(2) For solicitations to be awarded to the highest scored bidder
10based on evaluation factors in addition to price, the preference to
11a bidder that certifies that all of the parts of the clean energy device,
12technology, or system to be installed have been manufactured or
13assembled in this state shall be 5 percent of the total score of the
14highest scored bidder.

15(3) A preference awarded pursuant to paragraph (1) or (2) shall
16not be awarded to a noncompliant bidder and shall not be used to
17satisfy any applicable minimum requirements.

18(4) In order to be eligible for the 5-percent preference authorized
19pursuant to this section, a bidder shall submit all required
20substantiating documentation and information needed by the state
21agency to determine if the bidder is eligible for the preference,
22including, but not limited to, documentation regarding the identity
23of the manufacturer or assembler of the clean energy device,
24technology, or system and the location or locations where the parts
25of the clean energy device, technology, or system will be
26manufactured or assembled.

27(5) If, after application of the preferences set forth in this section,
28more than one bid qualified as the lowest responsible bid or the
29highest scored bid, the state agency shall award the contract to the
30bidder that has the highest number of full-time employees who
31assemble or manufacture the parts of the clean energy device,
32technology, or system in the state when the contract is let.

33(b) The Department of General Services shall establish a process
34to verify that a bidder meets the criteria for the 5-percent
35preference.

36

SEC. 5.  

Section 10780.6 is added to the Public Contract Code,
37to read:

38

10780.6.  

(a) For the purposes of this section:

39(1) (A) “Clean energy device, technology, or system” means
40the following:

P8    1(i) A device, technology, or system that contributes to improved
2energy management or efficiency.

3(ii) Ultralow-emission equipment for energy generation based
4on thermal energy systems, including, but not limited to, natural
5gas turbines and fuel cells.

6(iii) A device, technology, or system that conserves or produces
7heat, processes heat, space heating, water heating, steam, space
8cooling, refrigeration, mechanical energy, electricity, or in any
9form convertible to these uses, that does not expend or use
10conventional energy fuels, and that uses any of the following
11electrical generation technologies:

12(I) Biomass.

13(II) Solar thermal.

14(III) Photovoltaic.

15(IV) Wind.

16(V) Geothermal.

17(B) For the purposes of this subdivision, “conventional energy
18fuel” means any fuel derived from petroleum deposits, including,
19but not limited to, oil, heating oil, gasoline, fuel oil, or natural gas,
20including liquefied natural gas or nuclear fissionable materials.

21(2) “Power purchase agreement” means a financial arrangement
22in which a third-party developer owns, operates, and maintains a
23clean energy device, technology, or system, and the trustees agree
24to site the device, technology, or system on their roof or elsewhere
25on their property and purchases the device, technology, or system’s
26electric output, not the device, technology, or system itself, from
27the third-party developer for a predetermined period of time.

28(b) The trustees that accept bids or proposals for a contract for
29the purchase or installation of a clean energy device, technology,
30or system through a power purchase agreement or a direct purchase
31shall provide a preference of 5 percent to a bidder that certifies
32that all of the parts of the clean energy device, technology, or
33system to be installed have been manufactured or assembled in
34this state. The preference shall be provided as follows:

35(1) For solicitations to be awarded to the lowest responsible
36bidder meeting specifications, the preference to a bidder that
37certifies that all of the parts of the clean energy device, technology,
38or system to be installed have been manufactured or assembled in
39this state shall be 5 percent of the bid price of the lowest
40responsible bidder meeting specifications.

P9    1(2) For solicitations to be awarded to the highest scored bidder
2based on evaluation factors in addition to price, the preference to
3a bidder that certifies that all of the parts of the clean energy device,
4technology, or system to be installed have been manufactured or
5assembled in this state shall be 5 percent of the total score of the
6highest scored bidder.

7(3) A preference awarded pursuant to paragraph (1) or (2) shall
8not be awarded to a noncompliant bidder and shall not be used to
9satisfy any applicable minimum requirements.

10(4) In order to be eligible for the 5-percent preference authorized
11pursuant to this section, a bidder shall submit all required
12substantiating documentation and information needed by the
13trustees to determine if the bidder is eligible for the preference,
14including, but not limited to, documentation regarding the identity
15of the manufacturer or assembler of the clean energy device,
16technology, or system and the location or locations where the parts
17of the clean energy device, technology, or system will be
18manufactured or assembled.

19(5) If, after application of the preferences set forth in this section,
20more than one bid qualifies as the lowest responsible bid or the
21highest scored bid, the trustees shall award the contract to the
22bidder that has the highest number of full-time employees who
23assemble or manufacture the parts of the clean energy device,
24technology, or system in the state when the contract is let.

25(c) The Department of General Services shall establish a process
26to verify that a bidder meets the criteria for the 5-percent
27preference.



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