BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair
2015 - 2016 Regular
Bill No: AB 1505 Hearing Date: June 14, 2016
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|Author: |Roger Hernández |
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|Version: |May 27, 2016 |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|MK |
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Subject: Statute of Limitations: Public Contracts
HISTORY
Source: Author
Prior Legislation:None applicable
Support: Betty Yee, California's State Controller
Opposition:None known
Assembly Floor Vote: No longer relevant
PURPOSE
The purpose of this bill is to extend from one to three years
the statute of limitations for specified Public Contract Code
misdemeanors relating to competitive bidding.
Existing law provides that a school district must put contracts
out to bid for specified contracts involving equipment or
services for more than $50,000 or construction contracts for
more than $15,000. (Public Contract Code § 20111)
Existing law provides public projects by a local agency of more
than $175,000 shall be let to contract by a formal bidding
contract, projects of less than $175,000 may be bid by informal
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procedures. (Public Contract Code § 22032)
Existing law provides that all contracts for any improvement in
excess of $25,000 by a reclamation district shall be let to the
lowest responsible bidder. (Public Contract Code § 20921)
Existing law provides that a community college may make repairs,
alterations etc. without bidding when the job does not exceed
350 hours if the districts number of full-time students is less
than 15,000 and the job does not exceed 750 hours or $21,000 if
the number of students exceeds 15,000. (Public Contract Code §
2065)
Existing law provides that when the expenditure for a public
project by a local agency exceeds $5,000 it shall be contracted
for and let to the lowest bidder after notice. (Public Contract
Code § 20162)
Existing law provides that in counties of 500,000 or less,
public projects between $4,000 and $10,000 shall be let to
contract by informal bidding procedures and public projects of
$10,000 or more shall be let by formal bidding procedures.
(Public Contract Code § 20150.4)
Existing law provides that in counties with a population of
2,000,000 or more must use a formal bidding process for public
buildings if the cost is more than $4,000 but they do not have
to do work by bid if the cost estimate is less than $6,500 and
the requirements do not apply to repair work on county owned
buildings if the cost is under $50,000. (Public Contract Code §§
20121; 20122; 20123)
Existing law provides that it shall be unlawful for a school
district, community college district, reclamation agency or
local agency to split or separate into smaller work orders or
projects any work, project, service or purchase for the purpose
of evading the provisions requiring contracting after
competitive bidding. (Public Contract Code §§ 20116; 20657;
20922; 22033)
Existing law provides that when the expenditure required for a
public project exceeds $5,000, it shall be contracted for and
let go to the lowest responsible bidder after notice. (Public
Contract Code § 20162)
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Existing law provides that in any county, it is unlawful to
split or separate into small work orders or projects any public
work project for the purpose of evading the provisions requiring
public work to be done by contract after competitive bidding.
The penalty for a violation of these sections is a misdemeanor.
(Public Contract Code §§ 20123.5; 20150.11; 20163)
Existing law provides that in general the prosecution for a
misdemeanor shall be commenced within one year after the
commission of the offense.
This bill provides instead that a the prosecution for a
violation of the Public Contracts Code prohibiting the splitting
of jobs into smaller jobs to avoid competitive bidding shall be
commenced within three years of the commission of the offense.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the past several years this Committee has scrutinized
legislation referred to its jurisdiction for any potential
impact on prison overcrowding. Mindful of the United States
Supreme Court ruling and federal court orders relating to the
state's ability to provide a constitutional level of health care
to its inmate population and the related issue of prison
overcrowding, this Committee has applied its "ROCA" policy as a
content-neutral, provisional measure necessary to ensure that
the Legislature does not erode progress in reducing prison
overcrowding.
On February 10, 2014, the federal court ordered California to
reduce its in-state adult institution population to 137.5% of
design capacity by February 28, 2016, as follows:
143% of design bed capacity by June 30, 2014;
141.5% of design bed capacity by February 28, 2015; and,
137.5% of design bed capacity by February 28, 2016.
In December of 2015 the administration reported that as "of
December 9, 2015, 112,510 inmates were housed in the State's 34
adult institutions, which amounts to 136.0% of design bed
capacity, and 5,264 inmates were housed in out-of-state
facilities. The current population is 1,212 inmates below the
final court-ordered population benchmark of 137.5% of design bed
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capacity, and has been under that benchmark since February
2015." (Defendants' December 2015 Status Report in Response to
February 10, 2014 Order, 2:90-cv-00520 KJM DAD PC, 3-Judge
Court, Coleman v. Brown, Plata v. Brown (fn. omitted).) One
year ago, 115,826 inmates were housed in the State's 34 adult
institutions, which amounted to 140.0% of design bed capacity,
and 8,864 inmates were housed in out-of-state facilities.
(Defendants' December 2014 Status Report in Response to February
10, 2014 Order, 2:90-cv-00520 KJM DAD PC, 3-Judge Court, Coleman
v. Brown, Plata v. Brown (fn. omitted).)
While significant gains have been made in reducing the prison
population, the state must stabilize these advances and
demonstrate to the federal court that California has in place
the "durable solution" to prison overcrowding "consistently
demanded" by the court. (Opinion Re: Order Granting in Part and
Denying in Part Defendants' Request For Extension of December
31, 2013 Deadline, NO. 2:90-cv-0520 LKK DAD (PC), 3-Judge Court,
Coleman v. Brown, Plata v. Brown (2-10-14). The Committee's
consideration of bills that may impact the prison population
therefore will be informed by the following questions:
Whether a proposal erodes a measure which has contributed
to reducing the prison population;
Whether a proposal addresses a major area of public safety
or criminal activity for which there is no other
reasonable, appropriate remedy;
Whether a proposal addresses a crime which is directly
dangerous to the physical safety of others for which there
is no other reasonably appropriate sanction;
Whether a proposal corrects a constitutional problem or
legislative drafting error; and
Whether a proposal proposes penalties which are
proportionate, and cannot be achieved through any other
reasonably appropriate remedy.
COMMENTS
1. Need for This Bill
According to the author:
In April of 2014, Assemblymember Hernández formally
requested that the Controller's Office conduct an audit
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of West Covina's finances in response to several
complaints of misuse of public funds.
On June 9th 2015, State Controller Betty T. Yee
announced the results of a detailed review of the City
of West Covina's administrative and internal accounting
controls, finding serious and pervasive deficiencies.
Of the79 control components evaluated, West Covina was
found to be adequate in seven.
According to the Controller's Office, West Covina
violated California Public Contract Code section 20163,
which would constitute a misdemeanor had the statute of
limitations not expired. "It makes no sense that the
statute of limitations for violating state and local
contracting laws is one year from when the money is
spent," said Controller Yee. The Controller urged the
legislature to, "consider a statutory change if we
expect to ferret out fraud and prevent willful abuses
of state law and taxpayer dollars."
The detailed review of the City of West Covina's
administrative and internal accounting controls by
Controller Yee confirms troubling practices that harm
our community and brings into question government waste
and corruption. Over the years several cities have
violated the public's trust, including the city of
Industry, Maywood, Beaumont, Bell, Irwindale, Richmond,
Cudahy, and Montebello.
AB 1505 expands the statute of limitations by three
years for violating state and local public contracting
laws beyond the current one-year statute. Through AB
1505, we will be able to hold all of our elected
officials to greater accountability when they are
appropriating taxpayer dollars.
2. The Statute of Limitations Generally; Law Revision
Commission Report
The statute of limitations requires commencement of a
prosecution within a certain period of time after the commission
of a crime. A prosecution is initiated by filing an indictment
or information, filing a complaint, certifying a case to
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superior court, or issuing an arrest or bench warrant. (Penal
Code § 804.) The failure of a prosecution to be commenced within
the applicable period of limitation is a complete defense to the
charge. The statute of limitations is jurisdictional and may be
raised as a defense at any time, before or after judgment.
People v. Morris (1988) 46 Cal.3d 1, 13. The defense may only be
waived under limited circumstances. (See Cowan v. Superior Court
(1996) 14 Cal.4th 367.)
The Legislature enacted the current statutory scheme regarding
statutes of limitations for crimes in 1984 in response to a
report of the California Law Revision Commission:
The Commission identified various factors to be
considered in drafting a limitations statute. These
factors include: (a) The staleness factor. A person
accused of crime should be protected from having to
face charges based on possibly unreliable evidence and
from losing access to the evidentiary means to defend.
(b) The repose factor. This reflects society's lack of
a desire to prosecute for crimes committed in the
distant past. (c) The motivation factor. This aspect of
the statute imposes a priority among crimes for
investigation and prosecution. (d) The seriousness
factor. The statute of limitations is a grant of
amnesty to a defendant; the more serious the crime, the
less willing society is to grant that amnesty. (e) The
concealment factor. Detection of certain concealed
crimes may be quite difficult and may require long
investigations to identify and prosecute the
perpetrators.
The Commission concluded that a felony limitations
statute generally should be based on the seriousness of
the crime. Seriousness is easily determined based on
classification of a crime as felony or misdemeanor and
the punishment specified, and a scheme based on
seriousness generally will accommodate the other
factors as well. Also, the simplicity of a limitations
period based on seriousness provides predictability and
promotes uniformity of treatment.<1>
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<1> 1 Witkin Cal. Crim. Law Defenses, Section 214 (3rd Ed.
2004), citing 17 Cal. Law Rev. Com. Reports, pp.308-314.
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3. Expansion of the Statute of Limitations for Violating Local
Contracting Laws
Existing law, with some exceptions, provides that the statute of
limitations for a misdemeanor is one year. This bill would make
the statute of limitations for misdemeanor evading provisions
requiring work projects to be done by contract after competitive
bidding three years.
In support State Controller Betty Yee States:
As part of my July 2016 review of the City of West
Covina's administrative and internal controls, my
auditors discovered the city violated PCC 20163, which
precludes cities from splitting work orders on public
work projects into smaller pieces in order to avoid the
state's competitive bidding requirements. Violation of
this law is a misdemeanor, but prosecution of any
alleged violation must take place within a year of the
violation occurring.
Unfortunately in the case of West Covina, the
violations were not discovered during that one-year
period. By extending the period of time from one year
to three years in which charges must be filed, AB 1505
will give prosecutors more time to discover violations
of the Public Contract Code and hold local government
administrators accountable.
While a three year statute of limitations may be appropriate for
these offenses, it is not clear that the sections that this bill
extends the statute of limitations for will actually deals with
the issue. Depending on the section, competitive bidding is
required at contract amounts as low as $5,000. Is the issue
that entities are breaking contracts in to such small
increments? Will this bill deal with the issue the Controller
found?
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