Amended in Senate June 9, 2016

Amended in Senate June 11, 2015

Amended in Senate May 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1444

Introduced by Assembly Member Eduardo Garcia

February 27, 2015

An act to amend begin delete Sections 6300, 6302, and 6304 of, and to repeal Sections 6301, 6303, and 6305 of, the Government Code, relating to state government. end delete begin insert Section 13332.19 of the Government Code, and to amend Sections 10187.5 and 10190 of the Public Contract Code, relating to public contracts. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1444, as amended, Eduardo Garcia. begin delete Foreign-trade zones. end delete begin insert Design-build projects: the Salton Sea. end insert

begin insert

Existing law, except as specified, prohibits any state agency from expending funds appropriated for design-build projects until the Department of Finance and the State Public Works Board have approved performance criteria for the project.

end insert begin insert

This bill would include among the exceptions to those provisions amounts appropriated for projects at the Salton Sea.

end insert begin insert

Existing law requires either the Director of General Services or the Secretary of the Department of Corrections and Rehabilitation to notify the State Public Works Board regarding the method to be used for selecting a design-build entity, prior to advertising the design-build project.

end insert begin insert

This bill would, for purposes of projects at the Salton Sea, instead require the Director of the Department of Water Resources to notify the California Water Commission regarding the method to be used for selecting a design-build entry, prior to advertising a design-build project.

end insert begin insert

The bill would make other conforming changes.

end insert begin delete

Existing law authorizes any public corporation, as defined, and specified private corporations to apply for the privilege of establishing, operating, and maintaining a foreign-trade zone in accordance with federal law, and provides that any public or private corporation whose application is granted pursuant to federal law is authorized to establish, operate, and maintain a foreign-trade zone, subject to specified conditions. Existing law also authorizes a public corporation, if authorized to establish, operate, and maintain a foreign trade zone, to provide the United States with indemnity or assurance and to deposit sums of money with the United States as requested.

end delete begin delete

This bill would combine and reorganize these provisions and would repeal that indemnity and assurance provision.

end delete

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 13332.19 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

13332.19.  

(a) For the purposes of this section, the following
definitions shall apply:

(1) “Design-build” means a construction procurement process
in which both the design and construction of a project are procured
from a single entity.

(2) “Design-build project” means a capital outlay project using
the design-build construction procurement process.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed.

(4) “Design-build solicitation package” means the performance
criteria, any concept drawings, the form of contract, and all other
documents and information that serve as the basis on which bids
or proposals will be solicited from the design-build entities.

(5) “Design-build phase” means the period following the award
of a contract to a design-build entity in which the design-build
entity completes the design and construction activities necessary
to fully complete the project in compliance with the terms of the
contract.

(6) “Performance criteria” means the information that fully
describes the scope of the proposed project and includes, but is
not limited to, the size, type, and design character of the buildings
and site; the required form, fit, function, operational requirements,
and quality of design, materials, equipment, and workmanship;
and any other information deemed necessary to sufficiently
describe the state’s needs. Performance criteria may include
concept drawings, which include any schematic drawings or
architectural renderings that are prepared in the detail necessary
to sufficiently describe the state’s needs.

(b) (1) Except as otherwise specified in subparagraphs (A) to
begin delete (D), end delete begin insert (E), end insert inclusive, of paragraph (2) funds appropriated for a
design-build project shall not be expended by any state agency,
including, but not limited to, the University of California, the
California State University, the California Community Colleges,
and the Judicial Council, until the Department of Finance and the
State Public Works Board have approved performance criteria.

(2) This section shall not apply to any of the following:

(A) Amounts for acquisition of real property, in fee or any lesser
interest.

(B) Amounts for equipment or minor capital outlay projects.

(C) Amounts appropriated for performance criteria.

(D) Amounts appropriated for preliminary plans, if the
appropriation was made prior to January 1, 2005.

begin insert

(E) Amounts appropriated for projects at the Salton Sea.

end insert

(c) Any appropriated amounts for the design-build phase of a
design-build project, where funds have been expended on the
design-build phase by any state agency prior to the approval of
the performance criteria by the State Public Works Board, and all
amounts not approved by the board under this section shall be
reverted to the fund from which the appropriation was made. A
design-build project for which a capital outlay appropriation is
made shall not be put out to design-build solicitation until the bid
package has been approved by the Department of Finance. A
substantial change shall not be made to the performance criteria
as approved by the board and the Department of Finance without
written approval by the Department of Finance. The Department
of Finance shall approve any proposed bid or proposal alternates
set forth in the design-build solicitation package.

(d) The State Public Works Board may augment a design-build
project in an amount of up to 20 percent of the capital outlay
appropriations for the project, irrespective of whether any such
appropriation has reverted. For projects authorized through multiple
fund sources, including, but not limited to, general obligation bonds
and lease-revenue bonds, to the extent permissible, the Department
of Finance shall have full authority to determine which of the fund
sources will bear all or part of an augmentation. The board shall
defer all augmentations in excess of 20 percent of the amount
appropriated for each design-build project until the Legislature
makes additional funds available for the specific project.

(e) In addition to the powers provided by Section 15849.6, the
State Public Works Board may further increase the additional
amount in Section 15849.6 to include a reasonable construction
reserve within the construction fund for any capital outlay project
without augmenting the project. The amount of the construction
reserve shall be within the 20 percent augmentation limitation.
The board may use this amount to augment the project, when and
if necessary, after the lease-revenue bonds are sold to ensure
completion of the project.

(f) Any augmentation in excess of 10 percent of the amounts
appropriated for each design-build project shall be reported to the
Chairperson of the Joint Legislative Budget Committee, or his or
her designee, 20 days prior to board approval, or not sooner than
whatever lesser time the chairperson, or his or her designee, may
in each instance determine.

(g) (1) The Department of Finance may change the
administratively or legislatively approved scope for major
design-build projects.

(2) If the Department of Finance changes the approved scope
pursuant to paragraph (1), the department shall report the changes
and associated cost implications to the Chairperson of the Joint
Legislative Budget Committee, the chairpersons of the respective
fiscal committees, and the legislative members of the State Public
Works Board 20 days prior to the proposed board action to
recognize the scope change.

(h) The Department of Finance shall report to the Chairperson
of the Joint Legislative Budget Committee, the chairpersons of the
respective fiscal committees, and the legislative members of the
State Public Works Board 20 days prior to the proposed board
approval of performance criteria for any project when it is
determined that the estimated cost of the total design-build project
is in excess of 20 percent of the amount recognized by the
Legislature.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 10187.5 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

10187.5.  

For purposes of this article, the following definitions
and the definitions in subdivision (a) of Section 13332.19 of the
Government Code shall apply:

(a) “Best value” means a value determined by evaluation of
objective criteria that relate to price, features, functions, life-cycle
costs, experience, and past performance. A best value determination
may involve the selection of the lowest cost proposal meeting the
interests of the department and meeting the objectives of the
project, selection of the best proposal for a stipulated sum
established by the procuring agency, or a tradeoff between price
and other specified factors.

(b) “Construction subcontract” means each subcontract awarded
by the design-build entity to a subcontractor that will perform work
or labor or render service to the design-build entity in or about the
construction of the work or improvement, or a subcontractor
licensed by the State of California that, under subcontract to the
design-build entity, specially fabricates and installs a portion of
the work or improvement according to detailed drawings contained
in the plans and specifications produced by the design-build team.

(c)  begin insert (1) end insert begin insert   end insert “Department” means the Department of General
Services and the Department of Corrections and Rehabilitation.

begin insert

(2) For the purposes of projects at the Salton Sea, “department”
means the Department of Water Resources.

end insert

(d) “Design-build” means a project delivery process in which
both the design and construction of a project are procured from a
single entity.

(e) “Design-build entity” means a corporation, limited liability
company, partnership, joint venture, or other legal entity that is
able to provide appropriately licensed contracting, architectural,
and engineering services as needed pursuant to a design-build
contract.

(f) “Design-build team” means the design-build entity itself and
the individuals and other entities identified by the design-build
entity as members of its team. Members shall include the general
contractor and, if utilized in the design of the project, all electrical,
mechanical, and plumbing contractors.

(g)  begin insert (1) end insert begin insert   end insert “Director” means, with respect to procurements
undertaken by the Department of General Services, the Director
of General Services or, with respect to procurements undertaken
by the Department of Corrections and Rehabilitation, the secretary
of that department.

begin insert

(2) For purposes of projects at the Salton Sea, “director” means
the Director of Water Resources.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 10190 of the end insert begin insert Public Contract Code end insert begin insert is amended
to read: end insert

10190.  

begin insert (a) end insert begin insert   end insert The director shall notify the State Public Works
Board regarding the method to be used for selecting the
design-build entity, prior to advertising the design-build project.

begin insert

(b) Notwithstanding subdivision (a), for purposes of projects
at the Salton Sea, the Director of the Department of Water
Resources shall notify the California Water Commission regarding
the method to be used for selecting the design-build entry, prior
to advertising the design-build project.

end insert

begin delete

SECTION 1.  

Section 6300 of the Government Code is amended
to read:

6300.  

The following definitions govern this chapter:

(a) “Act of Congress” means the act of Congress approved June
18, 1934, entitled “An act to provide for the establishment,
operation, and maintenance of foreign-trade zones in ports of entry
of the United States, to expedite and encourage foreign commerce,
and for other purposes” (Public Law 73-397; 48 Stat. 998).

(b) “Public corporation” means the state, any political
subdivision thereof, any incorporated municipality therein, any
public agency of the state, of any political subdivision thereof, or
of any municipality therein, or any corporate municipal
instrumentality of this state or of this state and one or more other
states.

(c) “Private corporation” means an entity organized under the
laws of the state subsequent to September 15, 1935, for the purpose
of establishing, operating, and maintaining a foreign-trade zone
in accordance with the Act of Congress.

SEC. 2.  

Section 6301 of the Government Code is repealed.

SEC. 3.  

Section 6302 of the Government Code is amended to
read:

6302.  

(a) Any public corporation may apply for the privilege
of establishing, operating, and maintaining a foreign-trade zone
in accordance with the act of Congress.

(b) Any private corporation may apply for the privilege of
establishing, operating, and maintaining a foreign-trade zone in
accordance with the act of Congress.

SEC. 4.  

Section 6303 of the Government Code is repealed.

SEC. 5.  

Section 6304 of the Government Code is amended to
read:

6304.  

Any public or private corporation authorized by this
chapter to make an application and whose application is granted
pursuant to the terms of the act of Congress may establish, operate,
and maintain the foreign-trade zone:

(a) Subject to the conditions and restrictions of the act of
Congress, and any amendments thereto.

(b) Under such rules and regulations and for the period of time
that may be prescribed by the board established by the act of
Congress to carry out the act.

SEC. 6.  

Section 6305 of the Government Code is repealed.

end delete