BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 681
                                                                  Page  1

          Date of Hearing:   August 6, 2013

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                                 Das Williams, Chair
                  SB 681 (Ed Hernandez) - As Amended:  April 1, 2013

           SENATE VOTE  :   34-0
           
          SUBJECT  :   Community college districts: personal property.  

           SUMMARY  :   Clarifies existing law authorizing a community  
          college district to "piggyback" on an existing contract between  
          a public corporation or agency (including any county, city,  
          town, or district) and a vendor for the lease or purchase of  
          personal property by clarifying that, like school districts, the  
          community college districts can purchase directly from, and make  
          payments directly to, the vendor, without needing to go through  
          the original contracting agency.

           EXISTING LAW  :

          1)Establishes various procedures to be followed by the community  
            colleges to secure bids or proposals and enter into contracts  
            for the acquisition of goods and services (Education Code  
            §81641, §81644, §81645).

          2)Notwithstanding the Education Code provisions cited above,  
            community colleges are authorized, under specified conditions  
            to authorize any public corporation or agency, including any  
            county, city, town, or district, to lease data-processing  
            equipment, purchase materials, supplies, equipment, automotive  
            vehicles, tractors, and other personal property for the  
            district in the manner in which the public corporation or  
            agency is authorized by law to make the leases or purchases,  
            without advertising for bids, and to make payments to the  
            public corporation or agency for furnishing the services  
            incidental to the lease or purchase of the personal property  
            (Public Contract Code [PCC] §20652).

          3)Provides the same authority as outlined for community colleges  
            above to school districts. However, current law also provides  
            that, if there is an existing contract between a public  
            corporation or agency and a vendor for the lease or purchase  
            of the personal property, a school district may authorize the  
            lease or purchase of personal property directly from the  








                                                                  SB 681
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            vendor and make payment to the vendor under the same terms  
            that are available to the public corporation or agency under  
            the contract (PCC §20118).

           FISCAL EFFECT  :   Unknown.  This measure is keyed non-fiscal by  
          the Legislative Counsel.

           COMMENTS  :    Background  .  The term "piggyback" stems from the PCC  
          §20118, which allows school districts to acquire personal  
          property by participating in an existing contract of another  
          public entity.  According to some community college districts,  
          piggybacking can save months of time and significant costs as  
          districts, in order to go out for bid, must prepare documents,  
          advertise for bid, obtain local board approval and place award. 

          While the statute applies to the acquisition of personal  
          property, in the past, questions have arisen in regards to its  
          use for facilities related purchases, as school districts were  
          using "piggyback" contracts to acquire and install factory-built  
          modular building components that result in permanent school  
          facilities funded by the School Facility Program.  At the  
          request of the State Allocation Board, the Attorney General  
          issued an opinion in January 2006 which found that:

          1)A school district may not, without advertising for bids,  
            contract with another public agency to acquire factory-built  
            modular building components for installation on a permanent  
            foundation;

          2)A school district intending to contract for the construction,  
            reconstruction, renovation, improvement or repair of any  
            school building, where the work will require an expenditure of  
            $15,000 or more, must follow a competitive bidding process;  
            and, 

          3)Once these modular components have been attached at the  
            building site, and after significant on-site finish work has  
            been completed, they would result in permanent school  
            buildings of varying dimensions, purpose; and architectural  
            styles i.e. they are no longer personal property.

           Need for the bill  .  Current law authorizes both community  
          colleges and school districts to "piggyback" onto existing  
          contracts between vendors and public corporations or agencies.   
          In 2006, the Legislature clarified that this school district  








                                                                  SB 681
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          authority extended to allowing a school district, without being  
          listed or referenced on the original contract, to be included  
          without the originating public agency needing to secure  
          agreement from the vendor that the contract could be  
          "piggybacked."  This change in the law allowed for the benefits  
          of "piggybacking" without having to go through the original  
          contracting agency to buy and then transfer the item,  
          authorizing school districts to work directly with the vendor.    


          According to the author, this measure would address an inequity  
          (between school districts and community college districts)  
          conforming current law for community college districts to  
          existing law for school districts relative to "piggyback"  
          bidding. 

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Community College League of California 
          Kern Community College District
          Los Angeles Community College District
          Los Rios Community College District
          Peralta Community College District
          Rio Hondo Community College District
           
            Opposition 
           
          None on file.

           
          Analysis Prepared by  :    Jeanice Warden / HIGHER ED. / (916)  
          319-3960