Amended in Assembly August 5, 2013

Amended in Senate April 29, 2013

Amended in Senate April 10, 2013

Senate BillNo. 124


Introduced by Senator Corbett

(Coauthor: Senator Correa)

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(Coauthor: Assembly Member Roger Hernández)

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January 18, 2013


An act to amend Sections 4217.11 and 4217.16 of the Government Code, and to addbegin insert and repealend insert Section 10780.6begin delete to,end deletebegin insert of,end insert and to addbegin insert and repealend insert Article 7 (commencing with Section 10390)begin delete toend deletebegin insert ofend insert Chapter 2 of Part 2 of Division 2 of, the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 124, as amended, 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 the Trustees of the California State University to use a competitive bidding process when contracting for goods and services. However, existing law allows a publicbegin insert, as defined,end insert 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 wouldbegin insert 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 in the state if the contract is an energy service contract determined to be in the best interest of the public agency. The bill would, until January 1, 2020,end insert 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 in the state, in accordance with specified criteria.begin delete 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 in the state if the contract is an energy service contract determined to be in the best interest of the public agency.end deletebegin insert This bill would also, until January 1, 2020, require the Department of General Services to establish a clarification process to ensure that bidders meet the preference criteria and, with respect to the California State University, to publish related information on the departments’ Internet Web site.end insert

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:

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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.

end delete
begin delete

7(b)

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8begin insert(a)end insert At a time of scarce state resources, state purchasesbegin delete shouldend delete
9begin insert canend insert be used to stimulate our state economy and put people back
10to work.

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11(c)

end delete

12begin insert(b)end insert The Green Building Executive Order (B-18-12) mandated
13that state agencies evaluate the merits of using clean and renewable
14onsite energy generation technologies in all new building or large
15renovation projects.

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16(d)

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P3    1begin insert(c)end insert California has several companies that manufacture clean
2energy devices, technology, and systems in the state, employing
3Californians and helping our economy.

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4(e)

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5begin insert(d)end insert California isbegin delete the nation’s largestend deletebegin insert a national leader in creating
6aend insert
clean economy. begin deleteMore than 12,000 clean technology companies
7call California home and are creating jobs at nearly 10 times the
8rate of the state’s other industries.end delete
begin insert Many clean technology
9companies call California home.end insert
A number of these companies
10have developed novel technologies, and it is in the interest of the
11statebegin delete to incentivize these companiesend delete to establish and grow
12manufacturing operations within thebegin delete state. This willend deletebegin insert state, in order
13toend insert
create both construction and permanent manufacturing jobs in
14California.

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15(f)

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16begin insert(e)end insert It is the intent of the Legislature that a preference should be
17allowed for clean energy devices, technology, and systems
18manufactured in California.

19

SEC. 2.  

Section 4217.11 of the Government Code is amended
20to read:

21

4217.11.  

The following terms, whenever used in this chapter,
22have the meanings given in this section, except where the context
23clearly indicates otherwise:

24(a) “Clean energy device, technology, or system” means devices
25or technologies used for a renewable electrical generation facility,
26as defined in paragraph (1) of subdivision (a) of Section 25741 of
27the Public Resources Code; a combined heat and power system,
28as defined in Section 2840.2 of the Public Utilities Code;
29distributed generation and energy storage technologies eligible
30under the self-generation incentive program pursuant to Section
31379.6 of the Public Utilities Code, as determined by the Public
32Utilities Commission; or a facility designed for the production of
33renewable fuels the efficient use of which reduces the use of fossil
34or nuclear fuels; and energy efficiency devices or technologies
35that reduce the need for new electric generation and reduce
36emissions of toxic and criteria pollutants and greenhouse gases.

37(b) “Conservation services” means the electrical, thermal, or
38other energy savings resulting from conservation measures, which
39shall be treated as a supply of that energy.

P4    1(c) “Energy conservation facility” means clean energy devices,
2technologies, or systems, or conservation measures located in
3public buildings or on land owned by public agencies.

4(d) “Energy service contract” means a contract entered into by
5a public agency with any person, pursuant to which the person will
6provide electrical or thermal energy or conservation services to a
7public agency from an energy conservation facility.

8(e) “Facility financing contract” means a contract entered into
9by a public agency with any person whereby the person provides
10financing for an energy conservation facility in exchange for
11repayment of the financing and all costs and expenses related
12thereto by the public agency. A facility financing contract may
13provide for the person with whom the public agency contracts to
14provide any combination of feasibility studies for, and design and
15construction of, all or part of the energy conservation facility in
16addition to the financing and other related services, and may
17provide for an installment sale purchase, another form of purchase,
18or amortized lease of the energy conservation facility by the public
19agency.

20(f) “Facility ground lease” means a lease of all, or any portion
21of, land or a public building owned by, or under lease to, a public
22agency to a person in conjunction with an energy service contract
23or a facility financing contract. A facility ground lease may include,
24in addition to the land on which energy conservation facilities will
25be located, easements, rights-of-way, licenses, and rights of access,
26for the construction, use, or ownership by the person of the facility
27and all related utility lines not owned or controlled by the
28interconnecting utility, and offsite improvements related thereto.
29A facility ground lease may also include the addition or
30improvement of utility lines and equipment owned by the
31interconnecting utility that are necessary to permit interconnection
32between that utility and an energy conservation facility.

33(g) “Person” means, but is not limited to, any individual,
34company, corporation, partnership, limited liability company,
35public agency, association, proprietorship, trust, joint venture, or
36other entity or group of entities.

37(h) “Public agency” means the state, a county, city and county,
38city, district, community college district, school district, California
39State University, joint powers authority or other entity designated
40or created by a political subdivision relating to energy development
P5    1projects, and any other political subdivision or public corporation
2in the state.

3(i) “Public building” includes any structure, building, facility,
4or work which a public agency is authorized to construct or use,
5and automobile parking lots, landscaping, and other facilities,
6including furnishings and equipment, incidental to the use of any
7structure, building, facility, or work, and also includes the site
8thereof, and any easements, rights-of-way appurtenant thereto, or
9necessary for its full use.

10

SEC. 3.  

Section 4217.16 of the Government Code is amended
11to read:

12

4217.16.  

Prior to awarding or entering into an agreement or
13lease, the public agency may request proposals from qualified
14persons. After evaluating the proposals, the public agency may
15award the contract on the basis of the experience of the contractor,
16the type of technology employed by the contractor, the cost to the
17local agency, whether the clean energy device or technology is
18manufactured in California, and any other relevant considerations.
19The public agency may utilize the pool of qualified energy service
20companies established pursuant to Section 388 of the Public
21Utilities Code and the procedures contained in that section in
22awarding the contract.

23

SEC. 4.  

Article 7 (commencing with Section 10390) is added
24to Chapter 2 of Part 2 of Division 2 of the Public Contract Code,
25to read:

26 

27Article 7.  Preference for California-Manufactured Clean Energy
28Devices, Technology, and Systems
29

 

30

10390.  

For the purposes of this article:

31(a) “Clean energy device, technology, or system” means devices
32or technologies used for a renewable electrical generation facility,
33as defined in paragraph (1) of subdivision (a) of Section 25741 of
34the Public Resources Code; a combined heat and power system,
35as defined in Section 2840.2 of the Public Utilities Code;
36distributed generation and energy storage technologies eligible
37under the self-generation incentive program pursuant to Section
38379.6 of the Public Utilities Code, as determined by the Public
39Utilities Commission;begin insert a solar water heating system, as defined in
40subdivision (g) of Section 2861 of the Public Utilities Code;end insert
or a
P6    1facility designed for the production of renewable fuels, the efficient
2use of which reduces the use of fossil or nuclear fuels; and energy
3efficiency devices or technologies that reduce the need for new
4electric generation and reduce emissions of toxic and criteria
5pollutants and greenhouse gases.

6(b) “Power purchase agreement” means a financial arrangement
7in which a third-party developer owns, operates, and maintains a
8clean energy device, technology, or system, and a state agency
9agrees to site the device, technology, or system on its roof or
10elsewhere on its property and purchases the device, technology,
11or system’s electric output, not the device, technology, or system
12itself, from the third-party developer for a predetermined period
13of time.

14

10391.  

(a) A state agency that accepts bids or proposals for a
15contract for the purchase or installation of a clean energy device,
16technology, or system through a power purchase agreement or a
17direct purchase shall provide a preference of 5 percent to a bidder
18that certifies that all of the parts of the clean energy device,
19technology, or system to be installed have been manufactured in
20this state.begin insert The maximum preference a bidder may be awarded
21pursuant to this article is 5 percent, for that portion of a project
22that is for the purchase and installation of a clean energy device,
23technology, or system. The total bid preference resulting from this
24article and any other provision of law shall not exceed 15 percent.end insert

25 The preference shall be provided as follows:

26(1) For solicitations to be awarded to the lowest responsible
27bidder meeting specifications, the preference to a bidder that
28certifies that all of the parts of the clean energy device, technology,
29or system to be installed have been manufactured in this state shall
30be 5 percent of the bid price of the lowest responsible bidder
31meeting specifications.

32(2) For solicitations to be awarded to the highest scored bidder
33based on evaluation factors in addition to price, the preference to
34a bidder that certifies that all of the parts of the clean energy device,
35technology, or system to be installed have been manufactured in
36this state shall be 5 percent of the total score of the highest scored
37bidder.

38(3) A preference awarded pursuant to paragraph (1) or (2) shall
39not be awarded to a noncompliant bidder and shall not be used to
40satisfy any applicable minimum requirements.

P7    1(4) In order to be eligible for the 5-percent preference authorized
2pursuant to this section, a bidder shall submit all required
3substantiating documentation and information needed by the state
4agency to determine if the bidder is eligible for the preference,
5including, but not limited to, documentation regarding the identity
6of the manufacturer of the clean energy device, technology, or
7system and the location or locations where the parts of the clean
8energy device, technology, or system will be manufactured.

9(5) If, after application of the preferences set forth in this section,
10more than one bid qualified as the lowest responsible bid or the
11highest scored bid, the state agency shall award the contract to the
12bidder that has the highest number of full-time employees who
13manufacture the parts of the clean energy device, technology, or
14system in the state when the contract is let.

15(b) The Department of General Services shall establish a process
16to verify that a bidder meets the criteria for the 5-percent
17preference.

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18

begin insert10392.end insert  

This article shall remain in effect only until January 1,
192020, and as of that date is repealed, unless a later enacted statute,
20that is enacted before January 1, 2020, deletes or extends that
21date.

end insert
22

SEC. 5.  

Section 10780.6 is added to the Public Contract Code,
23to read:

24

10780.6.  

(a) For purposes of this section, “clean energy device,
25technology, or system” means devices or technologies used for a
26renewable electrical generation facility, as defined in paragraph
27(1) of subdivision (a) of Section 25741 of the Public Resources
28Code; a combined heat and power system, as defined in Section
292840.2 of the Public Utilities Code; distributed generation and
30energy storage technologies eligible under the self-generation
31incentive program pursuant to Section 379.6 of the Public Utilities
32Code, as determined by the Public Utilities Commission;begin insert a solar
33water heating system, as defined in subdivision (g) of Section 2861
34of the Public Utilities Code;end insert
or a facility designed for the
35production of renewable fuels, the efficient use of which reduces
36the use of fossil or nuclear fuels; and energy efficiency devices or
37technologies that reduce the need for new electric generation and
38reduce emissions of toxic and criteria pollutants and greenhouse
39gases.

P8    1(b) The trustees that accept bids or proposals for a contract for
2the purchase or installation of a clean energy device, technology,
3or system through a power purchase agreement or a direct purchase
4shall provide a preference of 5 percent to a bidder that certifies
5that all of the parts of the clean energy device, technology, or
6system to be installed have been manufactured in this state.begin insert The
7maximum preference a bidder may be awarded pursuant to this
8section is 5 percent, for that portion of a project that is for the
9purchase and installation of a clean energy device, technology,
10or system. The total bid preference resulting from this section and
11any other provision of law shall not exceed 15 percent.end insert
The
12preference shall be provided as follows:

13(1) For solicitations to be awarded to the lowest responsible
14bidder meeting specifications, the preference to a bidder that
15certifies that all of the parts of the clean energy device, technology,
16or system to be installed have been manufactured in this state shall
17be 5 percent of the bid price of the lowest responsible bidder
18meeting specifications.

19(2) For solicitations to be awarded to the highest scored bidder
20based on evaluation factors in addition to price, the preference to
21a bidder that certifies that all of the parts of the clean energy device,
22technology, or system to be installed have been manufactured in
23this state shall be 5 percent of the total score of the highest scored
24bidder.

25(3) A preference awarded pursuant to paragraph (1) or (2) shall
26not be awarded to a noncompliant bidder and shall not be used to
27satisfy any applicable minimum requirements.

28(4) In order to be eligible for the 5-percent preference authorized
29pursuant to this section, a bidder shall submit all required
30substantiating documentation and information needed by the
31trustees to determine if the bidder is eligible for the preference,
32including, but not limited to, documentation regarding the identity
33of the manufacturer of the clean energy device, technology, or
34system and the location or locations where the parts of the clean
35energy device, technology, or system will be manufactured.

36(5) If, after application of the preferences set forth in this section,
37more than one bid qualifies as the lowest responsible bid or the
38highest scored bid, the trustees shall award the contract to the
39bidder that has the highest number of full-time employees who
P9    1manufacture the parts of the clean energy device, technology, or
2system in the state when the contract is let.

3(c) begin insert(1)end insertbegin insertend insert The Department of General Services shall establish a
4process to verify that a bidder meets the criteria for the 5-percent
5preferencebegin insert and publish on its Internet Web site a regularly updated
6list of all sites that received bid preferences, including the name
7of the manufacturer and the type of clean energy device,
8technology, or system utilizedend insert
.

begin insert

9(2) The Department of General Services shall annually publish
10data on its Internet Web site, on the employment growth associated
11with the clean energy bid preference for women, minority, and
12disabled veterans.

end insert
begin insert

13(d) This section shall remain in effect only until January 1, 2020,
14and as of that date is repealed, unless a later enacted statute, that
15is enacted before January 1, 2020, deletes or extends that date.

end insert


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