BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1505|
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THIRD READING
Bill No: AB 1505
Author: Roger Hernández (D)
Amended: 5/27/16 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE PUBLIC SAFETY COMMITTEE: 5-2, 6/14/16
AYES: Hancock, Anderson, Leno, Liu, Monning
NOES: Glazer, Stone
SUBJECT: Statute of limitations: public contracts
SOURCE: Author
DIGEST: This bill extends from one to three years the statute
of limitations for specified Public Contract Code misdemeanors
relating to competitive bidding.
ANALYSIS:
Existing law:
1) 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)
2) Provides that public projects by a local agency of more than
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$175,000 shall be let to contract by a formal bidding
contract, projects of less than $175,000 may be bid by
informal procedures. (Public Contract Code § 22032)
3) 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)
4) 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)
5) 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)
6) 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)
7) Provides that 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)
8) 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
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purpose of evading the provisions requiring contracting after
competitive bidding. (Public Contract Code §§ 20116; 20657;
20922; 22033)
9) 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)
10)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)
11)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 the prosecution for a violation
of the Public Contract 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified 6/14/16)
State Controller Betty Yee
State Building and Construction Trades Council of California
OPPOSITION: (Verified 6/14/16)
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League of California Cities
ARGUMENTS IN SUPPORT: 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.
ARGUMENTS IN OPPOSITION: In opposition, the League of
California Cities states:
The League questions how serious of a problem this is
among cities. The author cites a press release from the
State Controller's Office audit which identifies a
violation of Public Contract Code Section 20163, but it
remains unclear from the audit how that particular code
section was violated to necessitate this bill.
Despite the author's concerns, there has been no reported
widespread abuse of these provisions in the public
contract code. In this particular instance, the city in
question took considerable measures to address the audits
in the finding, including hiring a new city manager and a
new public works director.
In the instance that a local government violates state
and/or local law, then the agency must be held accountable
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to the full extent and enforcement of the law.
Unfortunately, too often, city contracts for essential
public services are a consistent target for litigation
from competing interests and subjecting local governments
to increased legal risks only make it more difficult for
public servants to carry out their responsibilities.
Prepared by:Mary Kennedy / PUB. S. /
6/15/16 17:24:46
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