BILL NUMBER: AB 566	ENROLLED
	BILL TEXT

	PASSED THE SENATE  JULY 13, 2015
	PASSED THE ASSEMBLY  JULY 16, 2015
	AMENDED IN SENATE  JUNE 17, 2015
	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member O'Donnell

                        FEBRUARY 24, 2015

   An act to amend Sections 17406 and 17407 of, and to add Section
17407.5 to, the Education Code, and to amend Section 20111.6 of the
Public Contract Code, relating to school facilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 566, O'Donnell. School facilities: leasing property:
construction contracts.
   Existing law authorizes the governing board of a school district,
without advertising for bids, to lease real property for a minimum
rental of $1 per year if the instrument by which this property is
leased requires the lessee to construct, or provide for the
construction of, a building to be used by the school district and
provides that the title to the building shall vest in the school
district at the end of the lease. Existing law, until January 1,
2019, also requires the instrument, if funds for the instrument
derive from the Leroy F. Greene School Facilities Act of 1998 or from
any future state school bond for a public project that involves a
projected expenditure of $1,000,000 or more, to provide that the
person, firm, or corporation that constructs the building shall
comply with specified prequalification requirements.
   Existing law also authorizes the governing board of a school
district to enter into an agreement with the lowest responsible
bidder to construct, or provide for the construction of, a building
to be leased and used by the school district upon a designated site
if the instrument provides that the title to the building and site
shall vest in the school district at the end of the lease. Existing
law, until January 1, 2019, requires the agreement, if funds for the
agreement derive from the Leroy F. Greene School Facilities Act of
1998 or from any future state school bond for a public project that
involves a projected expenditure of $1,000,000 or more, to provide
that the person, firm, or corporation that constructs the building
shall comply with specified prequalification requirements.
   This bill would, until January 1, 2019, require the instrument and
agreement to provide that the person, firm, or corporation that
constructs the building to comply with specified prequalification
requirements in this context regardless of the funding source for the
public project. The bill would require that certain conditions
relating to the use of a skilled and trained workforce on the project
or contract be satisfied before the governing board of a school
district may enter into a contract with any entity for the
construction, or for providing for the construction of, a building to
be leased or used by the school district.
   Existing law requires, until January 1, 2019, the governing board
of a school district that enters into a contract for a public
project, as defined, for which the board uses moneys received
pursuant to the Leroy F. Greene School Facilities Act of 1998 or
moneys from future state school bonds for a public project that
involves a projected expenditure of $1,000,000 or more, to require
prospective bidders for a construction contract to complete and
submit a standardized prequalification questionnaire and financial
statement, as provided.
   This bill would impose these requirements on a public project if
funding for the project includes reimbursement from any future state
school bond.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17406 of the Education Code, as amended by
Section 1 of Chapter 408 of the Statutes of 2014, is amended to read:

   17406.  (a) (1) Notwithstanding Section 17417, the governing board
of a school district, without advertising for bids, may let, for a
minimum rental of one dollar ($1) a year, to a person, firm, or
corporation real property that belongs to the school district if the
instrument by which this property is let requires the lessee therein
to construct on the demised premises, or provide for the construction
thereon of, a building or buildings for the use of the school
district during the term of the lease, and provides that title to
that building shall vest in the school district at the expiration of
that term. The instrument may provide for the means or methods by
which that title shall vest in the school district before the
expiration of that term, and shall contain other terms and conditions
as the governing board of the school district may deem to be in the
best interest of the school district.
   (2) For a public project, as defined in subdivision (c) of Section
22002 of the Public Contract Code, regardless of its funding source,
an instrument created pursuant to paragraph (1) shall also require
that a person, firm, or corporation that constructs the building,
including, but not limited to, the prime contractor and, if used,
electrical, mechanical, and plumbing subcontractor, shall be subject
to the same prequalification requirements for prospective bidders
described in subdivisions (b) to (m), inclusive, of Section 20111.6
of the Public Contract Code, including the requirement for the
completion and submission of a standardized prequalification
questionnaire and financial statement that is verified under oath and
is not a public record.
   (b) A rental of property that complies with subdivision (a) as it
reads on the day that the lease is entered into shall be deemed to
have thereby required the payment of adequate consideration for
purposes of Section 6 of Article XVI of the California Constitution.
   (c) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 2.  Section 17407 of the Education Code, as amended by Section
3 of Chapter 408 of the Statutes of 2014, is amended to read:
   17407.  (a) The governing board of a school district may enter
into an agreement with a person, firm, or corporation under which
that person, firm, or corporation shall construct, or provide for the
construction of, a building to be used by the school district upon a
designated site and lease the building and site to the school
district. The instrument shall provide that the title to the building
and site shall vest in the school district at the expiration of the
lease, and may provide the means or method by which the title to the
building and site shall vest in the school district before the
expiration of the lease, and shall contain other terms and conditions
as the governing board of the school district deems to be in the
best interest of the school district.
   (b) The agreement entered into shall be with the lowest
responsible bidder who shall give the security that a governing board
of a school district requires. The governing board of a school
district may reject all bids. For the purpose of securing bids the
governing board of a school district shall publish at least once a
week for two weeks in a newspaper of general circulation published in
the school district, or if there is no newspaper, then in a
newspaper of general circulation circulated in the county, a notice
calling for bids, stating the proposed terms of the agreement and the
time and place where bids will be opened.
   (c) For a public project, as defined in subdivision (c) of Section
22002 of the Public Contract Code, regardless of its funding source,
an agreement entered into pursuant to subdivision (a) shall also
require that a person, firm, or corporation that constructs the
building, including, but not limited to, the prime contractor and, if
used, electrical, mechanical, and plumbing subcontractor, under this
section shall be subject to the same prequalification requirements
for prospective bidders described in subdivisions (b) to (m),
inclusive, of Section 20111.6 of the Public Contract Code, including
the requirement for the completion and submission of a standardized
prequalification questionnaire and financial statement that is
verified under oath and is not a public record.
   (d) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 3.  Section 17407.5 is added to the Education Code, to read:
   17407.5.  (a) The governing board of a school district shall not
enter into an agreement pursuant to Section 17406 or 17407 with any
entity unless the entity provides to the governing board of the
school district an enforceable commitment that the entity and its
subcontractors at every tier will use a skilled and trained workforce
to perform all work on the project or contract that falls within an
apprenticeable occupation in the building and construction trades.
   (b) For purposes of this section:
   (1) "Apprenticeable occupation" means an occupation for which the
Chief of the Division of Apprenticeship Standards of the Department
of Industrial Relations had approved an apprenticeship program
pursuant to Section 3075 of the Labor Code before January 1, 2014.
   (2) "Chief" means the Chief of the Division of Apprenticeship
Standards of the Department of Industrial Relations.
   (3) "Skilled and trained workforce" means a workforce that meets
all of the following conditions:
   (A) All the workers are either skilled journeypersons or
apprentices registered in an apprenticeship program approved by the
chief.
   (B) (i) As of January 1, 2016, at least 30 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the chief pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (ii) As of January 1, 2017, at least 40 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the chief pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (iii) As of January 1, 2018, at least 50 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the chief pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (iv) As of January 1, 2019, at least 60 percent of the skilled
journeypersons employed to perform work on the contract or project by
the entity and each of its subcontractors at every tier are
graduates of an apprenticeship program for the applicable occupation
that was either approved by the chief pursuant to Section 3075 of the
Labor Code or located outside California and approved for federal
purposes pursuant to the apprenticeship regulations adopted by the
federal Secretary of Labor.
   (C) For an apprenticeable occupation in which no apprenticeship
program had been approved by the chief before January 1, 1995, up to
one-half of the graduation percentage requirements of subparagraph
(B) may be satisfied by skilled journeypersons who commenced working
in the apprenticeable occupation before the chief's approval of an
apprenticeship program for that occupation in the county in which the
project is located.
   (4) "Skilled journeyperson" means a worker who either:
   (A) Graduated from an apprenticeship program for the applicable
occupation that was approved by the chief or located outside
California and approved for federal purposes pursuant to the
apprenticeship regulations adopted by the federal Secretary of Labor.

   (B) Has at least as many hours of on-the-job experience in the
applicable occupation as would be required to graduate from an
apprenticeship program for the applicable occupation that is approved
by the chief.
   (c) An entity's commitment that a skilled and trained workforce
will be used to perform the project or contract may be established by
any of the following:
   (1) (A) The entity's agreement with the governing board of the
school district that the entity and its subcontractors at every tier
will comply with the requirements of this section and that the entity
will provide to the governing board of the school district, on a
monthly basis while the project or contract is being performed, a
report demonstrating that the entity and its subcontractors are
complying with the requirements of this section.
   (B) If the entity fails to provide to the governing board of the
school district the monthly report pursuant to subparagraph (A), the
governing board of the school district shall immediately cease making
payments to the entity pursuant to the instrument or agreement
described in Section 17406 or 17407.
   (C) The monthly report provided to the governing board of the
school district pursuant to this paragraph shall be a public record
under the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code), and
shall be open to public inspection.
   (2) If the governing board of a school district has entered into a
project labor agreement that will bind all contractors and
subcontractors performing work on the project or contract and that
includes the requirements of this section, the entity's agreement
that it will become a party to that project labor agreement.
   (3) Evidence that the entity has entered into a project labor
agreement that includes the requirements of this section and that
will bind the entity and all its subcontractors at every tier
performing the project or contract.
  SEC. 4.  Section 20111.6 of the Public Contract Code is amended to
read:
   20111.6.  (a) This section shall apply only to public projects, as
defined in subdivision (c) of Section 22002, for which the governing
board of the district uses funds received pursuant to the Leroy F.
Greene School Facilities Act of 1998 (Chapter 12.5 (commencing with
Section 17070.10) of Part 10 of Division 1 of Title 1 of the
Education Code) or any funds received, including funds reimbursed,
from any future state school bond for a public project that involves
a projected expenditure of one million dollars ($1,000,000) or more.
   (b) If the governing board of the school district enters into a
contract meeting the criteria of subdivision (a), then the governing
board of the school district shall require that prospective bidders
for a construction contract complete and submit to the governing
board of the school district a standardized prequalification
questionnaire and financial statement. The questionnaire and
financial statement shall be verified under oath by the bidder in the
manner in which civil pleadings in civil actions are verified. The
questionnaires and financial statements shall not be public records
and shall not be open to public inspection.
   (c) The governing board of the school district shall adopt and
apply a uniform system of rating bidders on the basis of the
completed questionnaires and financial statements. This system shall
also apply to a person, firm, or corporation that constructs a
building described in Section 17406 or 17407 of the Education Code.
   (d) The questionnaire and financial statement described in
subdivision (b), and the uniform system of rating bidders described
in subdivision (c), shall cover, at a minimum, the issues covered by
the standardized questionnaire and model guidelines for rating
bidders developed by the Department of Industrial Relations pursuant
to subdivision (a) of Section 20101.
   (e) Each prospective bidder shall be furnished by the school
district letting the contract with a standardized proposal form that,
when completed and executed, shall be submitted as his or her bid.
Bids not presented on the forms so furnished shall be disregarded.
   (f) A proposal form required pursuant to subdivision (e) shall not
be accepted from any person or other entity that is required to
submit a completed questionnaire and financial statement for
prequalification pursuant to subdivision (b) or from any person or
other entity that uses a subcontractor that is required to submit a
completed questionnaire and financial statement for prequalification
pursuant to subdivision (b), but has not done so at least 10 business
days before the date fixed for the public opening of sealed bids or
has not been prequalified for at least five business days before that
date. The school district may require the completed questionnaire
and financial statement for prequalification to be submitted more
than 10 business days before the fixed date for the public opening of
sealed bids. The school district may also require the
prequalification more than five business days before the fixed date.
   (g) (1) The governing board of the school district may establish a
process for prequalifying prospective bidders pursuant to this
section on a quarterly or annual basis and a prequalification
pursuant to this process shall be valid for one calendar year
following the date of initial prequalification.
   (2) The governing board of the school district shall establish a
process to prequalify a person, firm, or corporation, including, but
not limited to, the prime contractor and, if used, an electrical,
mechanical, and plumbing subcontractor, to construct a building
described in Section 17406 or 17407 of the Education Code on a
quarterly or annual basis. A prequalification pursuant to this
process shall be valid for one calendar year following the date of
initial prequalification.
   (h) This section shall not preclude the governing board of the
school district from prequalifying or disqualifying a subcontractor
of any specialty classification described in Section 7058 of the
Business and Professions Code.
   (i) For purposes of this section, bidders shall include both of
the following:
   (1) A prime contractor, as defined in Section 4113, that is either
of the following:
   (A) A general engineering contractor described in Section 7056 of
the Business and Professions Code.
   (B) A general building contractor described in Section 7057 of the
Business and Professions Code.
   (2) If utilized, each electrical, mechanical, and plumbing
contractor, whether as a prime contractor or as a subcontractor, as
defined in Section 4113.
   (j) If a public project covered by this section includes
electrical, mechanical, or plumbing components that will be performed
by electrical, mechanical, or plumbing contractors, a list of
prequalified general contractors and electrical, mechanical, and
plumbing subcontractors shall be made available by the school
district to all bidders at least five business days before the dates
fixed for the public opening of sealed bids. The school district may
require the list to be made available more than five business days
before the fixed dates for the public opening of sealed bids.
   (k) For purposes of this section, electrical, mechanical, and
plumbing subcontractors are contractors licensed pursuant to Section
7058 of the Business and Professions Code, specifically contractors
holding C-4, C-7, C-10, C-16, C-20, C-34, C-36, C-38, C-42, C-43, and
C-46 licenses, pursuant to regulations of the Contractors' State
License Board.
   (l) This section shall not apply to a school district with an
average daily attendance of less than 2,500.
   (m) (1) This section shall apply only to contracts awarded on or
after January 1, 2014.
   (2) The amendments made to this section by the act adding this
paragraph shall apply only to contracts awarded on or after January
1, 2015.
   (n) (1) On or before January 1, 2018, the Director of Industrial
Relations shall (A) submit a report to the Legislature evaluating
whether, during the years this section has applied to contracts,
violations of the Labor Code on school district projects have
decreased as compared to the same number of years immediately
preceding the enactment of this section, and (B) recommend
improvements to the system for prequalifying contractors and
subcontractors on school district projects.
   (2) A report to be submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
   (o) This section shall become inoperative on January 1, 2019, and,
as of July 1, 2019, is repealed.