Amended in Senate April 18, 2013

Senate Bill No. 425

Introduced by Senator DeSaulnier

( begin delete Coauthor: Senator end delete begin insert Coauthors: Senators end insert Gaines begin insert and Liu end insert )

February 21, 2013

An act to begin delete add Section 87202.1 to, and to end delete add Chapter 11 (commencing with Section 8847) to Division 1 of Title 2 begin delete of, end delete begin insert of end insert the Government Code, relating to public works.

LEGISLATIVE COUNSEL’S DIGEST

SB 425, as amended, DeSaulnier. Public works: the Public Works Peer Review Act of 2013.

Existing law defines a public work as construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public begin delete funds, end delete begin insert funds; end insert work done for irrigation, utility, reclamation, and improvement districts, and other districts of this begin delete type, end delete begin insert type; end insert street, sewer, or other improvement work done under the direction and supervision or by the authority of any officer or public body of the begin delete state, end delete begin insert state; end insert or of any political subdivision or district thereof, and public transportation demonstration projects, as specified.

This bill would require a begin delete state agency or department or a regional or local end delete begin insert public end insert agency, principally tasked with administering the planning begin delete and end delete begin insert , end insert development begin insert , and operation end insert of a begin delete public works end delete project begin insert , end insert to establish a specified peer review group, to provide it with expert advice on the scientific and technical aspects of the project if the public works is a megaproject, defined as having total development, construction, and reasonable projected maintenance costs exceeding begin delete one billion dollars end delete $1,000,000,000; if the Governor or the head of the administering agency has determined that the establishment of a peer review group is in the public interest in connection with the development and construction of the project; or if a statute or concurrent resolution is passed by the Legislature requiring the administering agency to do so. The bill would prohibit a peer review group from meeting or taking any action until a charter is filed with the head of the administering agency and the relevant standing committees of the Legislature and is posted on the administering agency’s Internet Web site, stating the group’s objective, the scope of its activities, and a description of the duties for which the group is responsible, among other things.

Existing law, the Political Reform Act of 1974, prohibits a public official at any level of state or local government from making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision in which he or she knows, or has reason to know, he or she has a financial interest. A violation of the act is a crime.

This bill would require a member of a peer review group, within 30 days of joining the group, to file specified forms with the Fair Political Practices Commission, under penalty of perjury, stating his or her economic interests, and declaring himself or herself to be independent of all parties involved in the project and to have no conflicts of interest.

Because the bill would expand the definition of a crime under the act, it would impose a state-mandated local program.

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The bill would also require the Fair Political Practices Commission to create a form that identifies potential institutional conflicts for members of peer review groups, and requires a member of a peer review group to declare, under penalty of perjury, to be independent of all parties involved in the project, including project sponsors or contractors, and to have no conflicts of interest.

end delete

Existing constitutional provisions require that a statute that limits the right of access to public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Chapter 11 (commencing with Section 8847) is
added to Division 1 of Title 2 of the Government Code, to read:

 

Chapter  11. The Public Works Project Peer Review Act
of 2013

 

8847.  

This chapter shall be known and may be cited as the
Public Works Project Peer Review Act of 2013.

8847.1.  

For purposes of this chapter, the following terms have
the following meanings, unless expressly stated otherwise:

(a) “Administering agency” means begin delete either a state agency or
department or a regional or local agency end delete begin insert a public agency, excluding
an “exempt agency” end insert principally tasked with administering the
planning begin delete and end delete begin insert , end insert development begin insert , and operation end insert of a begin delete public works end delete
project.

(b) “Auditor” means the Bureau of State Audits.

(c) “Conflict of interest” means a reviewer or a relative or
professional associate of the reviewer has a financial or other
interest in a project or with a project sponsor that is known to the
reviewer and is likely to bias the reviewer’s evaluation of that
project. A reviewer has a conflict of interest if begin delete he or she end delete begin insert any of the
following apply to him or her end insert or begin insert to end insert a close relative or professional
associate of the reviewer begin delete and any of the following also apply end delete :

(1) He or she has received or could receive a direct financial
benefit of any amount deriving from a project sponsor of or any
contractor connected to the project under review.

(2) Apart from any direct financial benefit deriving from a
project sponsor of or contractor connected to the project under
review, he or she has received or could receive an indirect financial
benefit from a project sponsor or contractor that in the aggregate
exceeds ten thousand dollars ($10,000) per year, including
honoraria, fees, stock or other financial benefit, and the current
value of the reviewer’s already existing stock holdings.

(3) He or she has the appearance of a conflict of interest that
would cause a reasonable person to question the reviewer’s
impartiality if he or she were to participate in the review.

(4) He or she has any other interest in the project, project
sponsor, or any connected contractor that, in the view of a
reasonable person, is likely to bias the reviewer’s evaluation of
that project.

begin insert

(d) “Exempt agency” means the California Water Commission,
California Department of Water Resources, or any state, regional,
or local public entity or district engaged in storing, supplying,
transporting, distributing, or delivering water.

end insert begin delete

(d)

end delete

begin insert (e) end insert  “Megaproject” means a project begin delete as defined in Section 1720
of the Labor Code end delete with total development, construction, and
reasonable projected maintenance costs exceeding one billion
dollars ($1,000,000,000).

begin delete

(e)

end delete

begin insert (f) end insert  “Peer review group” means a group of persons qualified by
training and experience in particular scientific or technical fields,
or as authorities knowledgeable in the various disciplines and fields
related to the public works project under review, who give expert
advice on the scientific and technical aspects of the project as
described in this chapter.

begin delete

(f)

end delete

begin insert (g) end insert  “Project” means a public works project as public works is
defined in Section 1720 of the Labor Code begin insert that will be owned by
a public agency, excluding an exempt agency end insert .

begin delete

(g)

end delete

begin insert (h) end insert  “Project sponsor” means any begin delete entity end delete begin insert public agency end insert that funds
a project, including a federal, state, local, or other entity, or the
administering agency.

8848.  

(a) The administering agency of a project shall establish
a peer review group if any of the following circumstances apply:

(1) The project is a megaproject.

(2) The Governor, or the head of the administering agency
involved, has determined that the establishment of a peer review
group is in the public interest in connection with the development
and construction of a project.

(3) A statute or concurrent resolution is passed by the Legislature
requiring the administering agency to establish a peer review group.

(b) Unless otherwise provided in statute, an administering
agency shall not establish a peer review group other than under
the provisions of this chapter.

8849.  

(a) A peer review group shall not meet or take any action
until a charter has been written by the administering agency and
filed with the relevant standing committees of the Legislature. The
charter also shall be posted on the administering agency’s Internet
Web site and shall contain all of the following information:

(1) The group’s official name or designation.

(2) The group’s objective and the scope of its activities.

(3) A statement of the expertise and balance of interests required
of the group membership to perform its charge.

(4) The name of the administering agency and official to whom
the group reports.

(5) A description of the duties for which the group is responsible.

(6) The estimated number and frequency of group meetings.

(7) The estimated annual operating costs for the group.

(b) Before establishing a peer review group, an administering
agency shall develop a transparent process for selecting members
of the group. The auditor shall review the process by which the
administering agency comprised the peer review group, to warrant
that the process was followed.

begin insert

(c) The administering agency shall enter into a contract with
each of the peer review group members that requires each member
to do all of the following:

end insert begin insert

(1) File the Statement of Economic Interest, Form 700, with the
Fair Political Practices Commission.

end insert begin insert

(2) Commit, upon penalty of perjury, to comply with the conflict
of interest requirements of this chapter.

end insert

8850.  

Components of megaprojects that must be evaluated by
a peer review group include, but are not limited to, the following:

(a) Project demand studies.

(b) Design and engineering models and estimates.

(c) Construction, testing, and inspection practices.

8851.  

All of the following shall apply to members of a peer
review group:

(a) A member shall, within 30 days of joining the group, file
the statements required under Sections 87202 and 87202.1, under
penalty of perjury, stating his or her economic interests, and
declaring himself or herself to be independent of all parties
involved in the project and to have no conflicts of interest.

(b) A member shall be reimbursed only for actual expenses, for
example, transportation and room and board costs, plus one
hundred dollars ($100) per day he or she performs work in the
review.

(c) A member shall have some expertise involving the work to
be reviewed, but need not be an expert in the specific field.

(d) If a member feels unable to provide objective advice, he or
she shall recuse begin delete him end delete begin insert himself end insert or herself from the peer review group.

8852.  

(a) All of the following shall apply to peer review group
meetings:

(1) An agenda and relevant documents begin delete , end delete shall be posted on the
administering agency’s Internet Web site at least one week before
the meeting.

(2) The meeting shall be held in a publicly accessible forum.

(3) The meeting shall contain a public participation component,
including presentations identifying specific issues to be discussed
or reviewed, and any other relevant presentations from the
administering agency.

(b) All documentation related to the issues to be reviewed at a
peer review group meeting, to the extent possible without putting
the administering agency at a negotiating disadvantage, shall be
made available to the public upon request.

(c) (1) In order to evaluate matters that relate to personnel,
design standards, contract amounts, or other issues that may put
the administering agency at a negotiating disadvantage, a meeting
of a peer review group subject to this act may be exempt in part
from the requirements of the Bagley-Keene Open Meeting Act
(Article 9 (commencing with Section 11120) of Division begin delete 3 of Title
2) end delete begin insert 3) end insert , at the discretion of the head of the administering agency to
whom the peer review group reports, unless that meeting includes
participation by one or more full-time, or permanent part-time,
officers or employees of the administering agency.

(2) This section shall not preclude a full-time, or permanent
part-time, officer or employee of the administering agency from
supplying administrative support to a peer review group. Support
staff shall not divulge the contents of a closed-door meeting. The
head of the administering agency shall be responsible for ensuring
compliance with Section 11228.

begin insert

begin insert 8853. end insert   

This chapter shall not apply to the peer review group
created pursuant to Section 185035 of the Public Utilities Code.

end insert

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SEC. 2.  

Section 87202.1 is added to the Government Code, to
read:

87202.1.  

The commission shall create a form, similar to a Form
700 statement of economic interests, that identifies potential
institutional conflicts for members of peer review groups. The
form shall require a member of a peer review group to declare,
under penalty of perjury, to be independent of all parties involved
in the project, including project sponsors or contractors, and to
have no conflicts of interest, as defined in Section 8847.1.

end delete

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

The Legislature finds and declares that this act imposes
a limitation on the public’s right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes
the following finding to demonstrate the interest protected by this
limitation and the need for protecting the interest:

The public interest in nondisclosure pursuant to this act
outweighs the public interest in disclosure, because requiring the
public disclosure of the internal deliberations of peer review groups
could impair the soundness of the group’s evaluation and
disadvantage the administering agency in contract negotiations.

begin delete SEC. 4. end delete
begin insert SEC. 3. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for certain
costs that may be incurred by a local agency or school district
because, in that regard, this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.

However, if the Commission on State Mandates determines that
this act contains other costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

begin delete SEC. 5. end delete
begin insert SEC. 4. end insert   

The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the
meaning of subdivision (a) of Section 81012 of the Government
Code.