Amended in Senate June 8, 2016

Amended in Assembly June 1, 2015

Amended in Assembly April 13, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 626


Introduced by Assemblybegin delete Member Lowend deletebegin insert Members Chiu and Lowend insert

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(Principal coauthor: Assembly Member Roger Hernández)

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(Coauthor: Assembly Member Dababneh)

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(Coauthor: Assembly Member Frazier)

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(Coauthors: Senators Anderson, Cannella, and Gaines)

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February 24, 2015


begin deleteAn act to amend Section 87482.6 of the Education Code, relating to community colleges. end deletebegin insertAn act to add and repeal Section 9204 of the Public Contract Code, relating to public contracts.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 626, as amended, begin deleteLowend delete begin insertChiuend insert. begin deleteCommunity colleges: employees. end deletebegin insertPublic contracts: claim resolution.end insert

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Existing law prescribes various requirements regarding the formation, content, and enforcement of state and local public contracts. Existing law applicable to state public contracts generally requires that the resolution of claims related to those contracts be subject to arbitration. Existing law applicable to local agency contracts prescribes a process for the resolution of claims related to those contracts of $375,000 or less.

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This bill would establish, for contracts entered into on or after January 1, 2017, a claim resolution process applicable to any claim by a contractor in connection with a public works project. The bill would define a claim as a separate demand by the contractor for one or more of the following: a time extension for relief from damages or penalties for delay, payment of money or damages arising from work done pursuant to the contract for a public work, or payment of an amount disputed by the public entity, as specified.

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This bill would require a public entity, defined to exclude certain state entities, upon receipt of a claim sent by registered or certified mail, to review it and, within 45 days, provide a written statement identifying the disputed and undisputed portions of the claim. The bill would authorize the 45-day period to be extended by mutual agreement. The bill would require any payment due on an undisputed portion of the claim to be processed within 60 days, as specified. The bill would require that the claim be deemed rejected in its entirety if the public entity fails to issue the written statement.

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This bill would authorize, if the claimant disputes the public entity’s written response or if the public entity fails to respond to a claim within the time prescribed, the claimant to demand to meet and confer for settlement of the issues in dispute. The bill would require any disputed portion of the claim that remains in dispute after the meet and confer conference to be subject to nonbinding mediation, as specified. The bill would provide that unpaid claim amounts accrue interest at 7% per annum. The bill would prescribe a procedure by which a subcontractor or lower tier contractor may make a claim through the contractor.

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This bill would require the text of these provisions, or a summary, to be set forth in the plans or specifications for any public work which may give rise to a claim. The bill would specify that a waiver of these rights is void and contrary to public policy, except as specified. The bill would also specify that it does not impose liability on a public entity that makes loans or grants available through a competitive application process, for the failure of an awardee to meet its contractual obligations.

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By increasing the duties of local agencies and officials, this bill would impose a state-mandated local program.

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This bill would, on January 1, 2020, repeal the provision establishing the claim resolution process.

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This bill would specify that these provisions constitute a matter of statewide concern.

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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.

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This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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Existing law establishes the California Community Colleges under the administration of the Board of Governors of the California Community Colleges. Existing law establishes community college districts, which provide instruction to students at campuses throughout the state.

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Existing law provides that, until specified statutory provisions are implemented regarding program-based funding, community college districts that have less than 75% of their hours of credit instruction taught by full-time instructors shall apply a portion of their program improvement allocations toward reaching that 75% standard, as specified. Existing law requires the board of governors to adopt regulations for the effective administration of the law concerning the appropriate percentage of hours of credit instruction taught by full-time instructors. Existing law requires the Chancellor of the California Community Colleges to compute the number of full-time faculty required to be secured using program improvement allocations, as specified, to determine the extent to which each community college district has hired that number of full-time faculty, and, to the extent that the cumulative number of full-time faculty have not been retained, to reduce the district’s base budget for 1991-92 and subsequent fiscal years in accordance with a certain formula.

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This bill would require the office of the Chancellor of the California Community Colleges to convene a group of stakeholders on or before July 1, 2016, and every 4 years thereafter, to develop recommendations on funding strategies to enable the community colleges to achieve the 75% standard and increase district participation in the support of part-time faculty. The bill would require the chancellor’s office to report these recommendations to the Legislature, as specified.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

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

P4    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 9204 is added to the end insertbegin insertPublic Contract
2Code
end insert
begin insert, to read:end insert

begin insert
3

begin insert9204.end insert  

(a) The Legislature finds and declares that it is in the
4best interests of the state and its citizens to ensure that all
5construction business performed on a public works project in the
6state that is complete and not in dispute is paid in full and in a
7timely manner.

8
(b) Notwithstanding any other law, including, but not limited
9to, Article 7.1 (commencing with Section 10240) of Chapter 1 of
10Part 2, Chapter 10 (commencing with Section 19100) of Part 2,
11and Article 1.5 (commencing with Section 20104) of Chapter 1 of
12Part 3, this section shall apply to any claim by a contractor in
13connection with a public works project.

14
(c) For purposes of this section:

15
(1) “Claim” means a separate demand by a contractor sent by
16registered mail or certified mail with return receipt requested, for
17one or more of the following:

18
(A) A time extension, including, without limitation, for relief
19from damages or penalties for delay assessed by a public entity
20under a contract for a public works project.

21
(B) Payment by the public entity of money or damages arising
22from work done by, or on behalf of, the contractor pursuant to the
23contract for a public works project and payment for which is not
24otherwise expressly provided or to which the claimant is not
25otherwise entitled.

26
(C) Payment of an amount that is disputed by the public entity.

27
(2) “Contractor” means any type of contractor within the
28meaning of Chapter 9 (commencing with Section 7000) of Division
293 of the Business and Professions Code who has entered into a
30direct contract with a public entity for a public works project.

31
(3) (A) “Public entity” means, without limitation, except as
32provided in subparagraph (B), a state agency, department, office,
33division, bureau, board, or commission, the California State
34University, the University of California, a city, including a charter
35city, county, including a charter county, city and county, including
36a charter city and county, district, special district, public authority,
37political subdivision, public corporation, or nonprofit transit
P5    1corporation wholly owned by a public agency and formed to carry
2out the purposes of the public agency.

3
(B) “Public entity” shall not include the following:

4
(i) The Department of Water Resources as to any project under
5the jurisdiction of that department.

6
(ii) The Department of Transportation as to any project under
7the jurisdiction of that department.

8
(iii) The Department of Parks and Recreation as to any project
9under the jurisdiction of that department.

10
(iv) The Department of Corrections and Rehabilitation with
11respect to any project under its jurisdiction pursuant to Chapter
1211 (commencing with Section 7000) of Title 7 of Part 3 of the Penal
13Code.

14
(v) The Military Department as to any project under the
15jurisdiction of that department.

16
(vi) The Department of General Services as to all other projects.

17
(vii) The High-Speed Rail Authority.

18
(4) “Public works project” means the erection, construction,
19alteration, repair, or improvement of any public structure, building,
20road, or other public improvement of any kind.

21
(5) “Subcontractor” means any type of contractor within the
22meaning of Chapter 9 (commencing with Section 7000) of Division
233 of the Business and Professions Code who either is in direct
24contract with a contractor or is a lower tier subcontractor.

25
(d) (1) (A) Upon receipt of a claim pursuant to this section,
26the public entity to which the claim applies shall conduct a
27reasonable review of the claim and, within a period not to exceed
2845 days, shall provide the claimant a written statement identifying
29what portion of the claim is disputed and what portion is
30undisputed. Upon receipt of a claim, a public entity and a
31contractor may, by mutual agreement, extend the time period
32provided in this subdivision.

33
(B) The claimant shall furnish reasonable documentation to
34support the claim.

35
(C) If the public entity needs approval from its governing body
36to provide the claimant a written statement identifying the disputed
37portion and the undisputed portion of the claim, and the governing
38body does not meet within the 45 days or within the mutually
39agreed to extension of time following receipt of a claim sent by
40registered mail or certified mail, return receipt requested, the
P6    1public entity shall have up to three days following the next duly
2publicly noticed meeting of the governing body after the 45-day
3period, or extension, expires to provide the claimant a written
4statement identifying the disputed portion and the undisputed
5portion.

6
(D) Any payment due on an undisputed portion of the claim
7shall be processed and made within 60 days after the public entity
8issues its written statement. If the public entity fails to issue a
9written statement, paragraph (3) shall apply.

10
(2) (A) If the claimant disputes the public entity’s written
11response, or if the public entity fails to respond to a claim issued
12pursuant to this section within the time prescribed, the claimant
13may demand in writing an informal conference to meet and confer
14for settlement of the issues in dispute. Upon receipt of a demand
15in writing sent by registered mail or certified mail, return receipt
16requested, the public entity shall schedule a meet and confer
17conference within 30 days for settlement of the dispute.

18
(B) Within 10 business days following the conclusion of the
19meet and confer conference, if the claim or any portion of the claim
20remains in dispute, the public entity shall provide the claimant a
21written statement identifying the portion of the claim that remains
22in dispute and the portion that is undisputed. Any payment due on
23an undisputed portion of the claim shall be processed and made
24within 60 days after the public entity issues its written statement.
25Any disputed portion of the claim, as identified by the contractor
26in writing, shall be submitted to nonbinding mediation, with the
27public entity and the claimant sharing the associated costs equally.
28The public entity and claimant shall mutually agree to a mediator
29within 10 business days after the disputed portion of the claim has
30been identified in writing. If the parties cannot agree upon a
31mediator, each party shall select a mediator and those mediators
32shall select a qualified neutral third party to mediate with regard
33to the disputed portion of the claim. Each party shall bear the fees
34and costs charged by its respective mediator in connection with
35the selection of the neutral mediator. If mediation is unsuccessful,
36the parts of the claim remaining in dispute shall be subject to
37applicable procedures outside this section.

38
(C) For purposes of this section, mediation includes any
39nonbinding process, including, but not limited to, neutral
40evaluation or a dispute review board, in which an independent
P7    1third party or board assists the parties in dispute resolution
2through negotiation or by issuance of an evaluation. Any mediation
3utilized shall conform to the timeframes in this section.

4
(D) Unless otherwise agreed to by the public entity and the
5contractor in writing, the mediation conducted pursuant to this
6section shall excuse any further obligation under Section 20104.4
7to mediate after litigation has been commenced.

8
(E) This section does not preclude a public entity from requiring
9arbitration of disputes under private arbitration or the Public
10Works Contract Arbitration Program, if mediation under this
11section does not resolve the parties’ dispute.

12
(3) Failure by the public entity to respond to a claim from a
13contractor within the time periods described in this subdivision
14or to otherwise meet the time requirements of this section shall
15result in the claim being deemed rejected in its entirety. A claim
16that is denied by reason of the public entity’s failure to have
17responded to a claim, or its failure to otherwise meet the time
18requirements of this section, shall not constitute an adverse finding
19with regard to the merits of the claim or the responsibility or
20qualifications of the claimant.

21
(4) Amounts not paid in a timely manner as required by this
22section shall bear interest at 7 percent per annum.

23
(5) If a subcontractor or a lower tier subcontractor lacks legal
24standing to assert a claim against a public entity because privity
25of contract does not exist, the contractor may present to the public
26entity a claim on behalf of a subcontractor or lower tier
27subcontractor. A subcontractor may request in writing, either on
28his or her own behalf or on behalf of a lower tier subcontractor,
29that the contractor present a claim for work which was performed
30by the subcontractor or by a lower tier subcontractor on behalf
31of the subcontractor. The subcontractor requesting that the claim
32be presented to the public entity shall furnish reasonable
33documentation to support the claim. Within 45 days of receipt of
34this written request, the contractor shall notify the subcontractor
35in writing as to whether the contractor presented the claim to the
36public entity and, if the original contractor did not present the
37claim, provide the subcontractor with a statement of the reasons
38for not having done so.

P8    1
(e) The text of this section or a summary of it shall be set forth
2in the plans or specifications for any public works project that
3may give rise to a claim under this section.

4
(f) A waiver of the rights granted by this section is void and
5contrary to public policy, provided, however, that (1) upon receipt
6of a claim, the parties may mutually agree to waive, in writing,
7mediation and proceed directly to the commencement of a civil
8action or binding arbitration, as applicable; and (2) a public entity
9in its public works contracts may include dispute resolution
10provisions that comply with this section, including the timeframes
11set forth herein, and that prescribe additional reasonable and
12equitable terms regarding actions or procedures to be taken by
13the parties.

14
(g) This section applies to contracts entered into on or after
15January 1, 2017.

16
(h) Nothing in this section shall impose liability upon a public
17entity that makes loans or grants available through a competitive
18application process, for the failure of an awardee to meet its
19contractual obligations.

20
(i) This section shall remain in effect only until January 1, 2020,
21and as of that date is repealed, unless a later enacted statute, that
22is enacted before January 1, 2020, deletes or extends that date.

end insert
23begin insert

begin insertSEC. 2.end insert  

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begin insert

The Legislature finds and declares that it is of statewide
24concern to require a charter city, charter county, or charter city
25and county to follow a prescribed claims resolution process to
26ensure there are uniform and equitable procurement practices.

end insert
27begin insert

begin insertSEC. 3.end insert  

end insert
begin insert

If the Commission on State Mandates determines that
28this act contains costs mandated by the state, reimbursement to
29local agencies and school districts for those costs shall be made
30pursuant to Part 7 (commencing with Section 17500) of Division
314 of Title 2 of the Government Code.

end insert
begin delete
32

SECTION 1.  

The Legislature finds and declares all of the
33following:

34(a) In 1988, the Education Code was amended to read that “the
35Legislature wishes to recognize and make efforts to address
36longstanding policy of the board of governors that at least 75
37percent of the hours of credit instruction in the California
38Community Colleges, as a system, should be taught by full-time
39instructors.”

P9    1(b) The expectations for full-time faculty go beyond classroom
2instruction to include, among other full-service activities, all of
3the following: developing and evaluating academic programs;
4holding office hours and participating in meetings after classes;
5student advising; participation in institutional governance; and
6accreditation-related responsibilities such as the assessment of
7departmental and student learning outcomes, curriculum
8development, and preparing institutional self-studies.

9(c) In 2014, the percentage of credit courses taught by full-time
10faculty in the system was only 56.14 percent.

11(d) The Legislature acknowledged the commitment of the Board
12of Governors of the California Community Colleges, through its
13regular budget process, to evaluate resource needs and seek funding
14for essential educational priorities that contribute to student
15success. These priorities include, but are not necessarily limited
16to, the hiring of more full-time faculty and increasing support for
17part-time faculty.

18(e) In the Seymour-Campbell Student Success Act of 2012, the
19Legislature acknowledged the importance of counselors, who,
20along with librarians, are considered to be faculty for purposes of
21the 75-percent goal.

22(f) Students enrolled in noncredit education are most often
23deprived of the benefit of working with full-time faculty, as
24statewide goals relating to the ratio of full-time to part-time faculty
25have yet to be developed with respect to noncredit courses.

26

SEC. 2.  

Section 87482.6 of the Education Code is amended to
27read:

28

87482.6.  

(a) Until the provisions of Section 84750.5 regarding
29program-based funding are implemented by a standard adopted
30by the board of governors that establishes the appropriate
31percentage of hours of credit instruction that should be taught by
32full-time instructors, the Legislature wishes to recognize and make
33efforts to address longstanding policy of the board of governors
34that at least 75 percent of the hours of credit instruction in the
35California Community Colleges, as a system, should be taught by
36full-time instructors. To this end, community college districts that
37have less than 75 percent of their hours of credit instruction taught
38by full-time instructors shall apply a portion of the program
39improvement allocation received pursuant to Section 84755 as
40follows:

P10   1(1) Districts that, in the prior fiscal year, had between 67 percent
2and 75 percent of their hours of credit instruction taught by
3full-time instructors shall apply up to 33 percent of this allocation
4as necessary to reach the 75-percent standard. If a district in this
5category chooses instead not to improve its percentage, the board
6of governors shall withhold 33 percent of this allocation.

7(2) Districts that, in the prior fiscal year, had less than 67 percent
8of their hours of credit instruction taught by full-time instructors
9shall apply up to 40 percent of this allocation as necessary to reach
10the 75-percent standard. If a district in this category chooses instead
11not to improve its percentage, the board of governors shall withhold
1240 percent of this allocation.

13(3) Districts that maintain 75 percent or more of their hours of
14credit instruction taught by full-time instructors shall otherwise
15be free to use their program improvement allocation for any of the
16purposes specified in Section 84755.

17(b) The board of governors shall adopt regulations for the
18effective administration of this section. Unless and until amended
19by the board of governors, the regulations shall provide as follows:

20(1) In computing the percentage of hours of credit instruction
21taught by full-time instructors, the hours of overload teaching by
22full-time instructors shall be excluded from both the total hours
23of credit instruction taught by full-time and part-time instructors
24and the total hours of instruction taught by full-time instructors.

25(2) A full-time instructor shall be defined as any regular and
26contract faculty member teaching credit instruction.

27(3) (A) The chancellor shall compute and report to each
28community college district the number of full-time faculty (FTF)
29which are to be secured through the use of the prescribed portion
30of program improvement revenue allocated to each district. This
31computation shall be made by dividing the applicable portion of
32program improvement revenue (0 percent, 33 percent, or 40 percent
33of the program improvement allocation), by the statewide average
34“replacement cost” (a figure which represents the statewide average
35faculty salary plus benefits, minus the statewide average hourly
36rate of compensation for part-time instructors times the statewide
37average full-time teaching load). If the quotient is not a whole
38number, then the quotient shall be rounded down to the nearest
39whole number. If this quotient, once applied, will result in the
40district exceeding the 75-percent standard, the chancellor shall
P11   1further reduce the quotient to a whole number that will leave the
2district as close as possible to, but in excess of, the 75-percent
3standard.

4(B) By March 15 of each year, the chancellor shall report to
5each district an estimate of the number of FTF to be secured based
6upon the appropriation of revenues contained in the annual Budget
7Bill.

8(4) On or before December 31, 1991, the chancellor shall
9determine the extent to which each district, by September 30, 1991,
10has hired the number of FTF determined pursuant to paragraph
11(3) for the 1989-90 and 1990-91 fiscal years. To the extent that
12the cumulative number of FTF have not been retained, the
13chancellor shall reduce the district’s base budget for 1991-92 and
14subsequent fiscal years by an amount equivalent to the average
15replacement cost times the deficiency in the number of FTF.

16(c) The office of the Chancellor of the California Community
17Colleges shall convene a group of stakeholders, which shall include
18faculty and students, on or before July 1, 2016, and every four
19years thereafter, to develop recommendations on funding strategies
20to enable the community colleges to achieve the 75-percent
21standard and increase the participation of districts in the support
22of part-time faculty, including, but not limited to, support of
23part-time faculty office hours. The office of the chancellor shall
24report the recommendations developed by the stakeholder group
25to the Legislature, as provided in Section 9795 of the Government
26Code, on or before March 1, 2017, and every four years thereafter.

27

SEC. 3.  

It is the intent of the Legislature that the office of the
28Chancellor of the California Community Colleges work together
29with the Academic Senate for California Community Colleges and
30other relevant entities to develop goals for the full-time to part-time
31faculty ratio in noncredit education.

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