BILL NUMBER: AB 2316 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 26, 2016
INTRODUCED BY Assembly Member O'Donnell
(Coauthor: Assembly Member Mullin)
FEBRUARY 18, 2016
An act to amend Section 17406 Sections
17400 and 17406 of the Education Code, relating to school
facilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2316, as amended, O'Donnell. School facilities: leasing
property.
Existing law requires the governing board of a school district to
adopt a resolution that, among other things: (1) declares its
intention to enter into a lease or agreement relating to school
property, (2) includes specified information about the property, and
(3) fixes a time for a public meeting of the governing board at which
sealed proposals to enter a lease or agreement with the school
district will be received from any person, firm, or corporation, and
considered by the governing board, as specified.
Existing law, notwithstanding the provision described above, also
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.
This bill would would, among other things,
delete the language that provides that a school district
governing board is not required to advertise for bids pursuant to
this provision. provision and would specify
that only a person, firm, or corporation that is a licensed
contractor, as specified, is eligible to be the lessee. The bill
would require an instrument created pursuant to these provisions to
be awarded based on a compet itive solicitation process to
the proposer providing the best value to the school
district, taking into consideration the proposer's demonstrated
competence and professional qualifications necessary for the
satisfactory performance of the services required. Before awarding
such an instrument, the bill would require the governing board of the
school district to adopt and publish required procedures and
guidelines for evaluating the qualifications of proposers to ensure
that the best value selections by the school district are conducted
in a fair and impartial manner, as provided. Notwithstanding certain
laws, the bill would authorize a school district to enter into such
an instrument before written approval by the Department of General
Services' Division of the State Architect (DSA) if the instrument
provides that no work for which a contractor is required to be
licensed and for which DSA approval is required shall be performed
before receipt of the required DSA approval. The bill would also
provide that when a project for the construction, alteration, repair,
or improvement of any structure, building, or other
improvement of any kind that was leased through such an instrument
before July 1, 2015, and that instrument is later determined to be
invalid, the contractor who entered into the contract with the school
district shall be entitled to be paid the reasonable cost of the
labor, equipment, materials, and services furnished by the contractor
before the date of the determination, subject to specified
conditions. The bill would provide that the changes made by its
provisions, except the deletion of the school district governing
board's authority to not advertise for bids, shall remain in effect
only until July 1, 2022.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17400 of the
Education Code is amended to read:
17400. (a) Any school district may enter into leases and
agreements relating to real property and buildings to be used by the
school district pursuant to this article.
(b) As used in this article, "building"
the following terms have the following meanings:
(1) "Best value" means a competitive procurement process whereby
the selected proposer is selected on the basis of objective criteria
for evaluating the qualifications of proposers with the resulting
selection representing the best combination of price and
qualifications.
(2) "Best value score" means the total score awarded to a proposer
for all scored evaluation factors.
(3) "Building" includes each of
the following:
(1)
(A) One or more buildings located or to be located on
one or more sites.
(2)
(B) The remodeling of any building located on a site to
be leased pursuant to this article.
(3)
(C) Onsite and offsite facilities, utilities
utilities, or improvements which
that the governing board determines are
necessary for the proper operation or function of the school
facilities to be leased.
(4)
(D) The permanent improvement of school grounds.
(4) "Preconstruction services" means advice during the design
phase including, but not limited to, scheduling, pricing, and phasing
to assist the school district to design a more constructible
project.
(c) As used in this article, "site"
(5) "Site" includes one or more
sites, and also may include any building or buildings located or to
be located on a site.
SECTION 1. SEC. 2. Section 17406 of
the Education Code, as amended by Section 1 of Chapter 214 of the
Statutes of 2015, is amended to read:
17406. (a) (1) Notwithstanding Section 17417, the governing board
of a school district may let, for a minimum rental of one dollar
($1) a year, to a person, firm, or corporation
corporation, licensed pursuant to Article 5 (commencing with
Section 7065) of Chapter 9 of Division 3 of the Business and
Professions Code, 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.
(2) An instrument created pursuant to paragraph (1) shall be
awarded based on a competitive solicitation process to the proposer
providing the best value to the school district, taking into
consideration the proposer's demonstrated competence and professional
qualifications necessary for the satisfactory performance of the
services required. Before awarding an instrument pursuant to this
section, the governing board of the school district shall adopt and
publish required procedures and guidelines for evaluating the
qualifications of proposers that ensure the best value selections by
the school district are conducted in a fair and impartial manner.
These procedures and guidelines shall be mandatory for the school
district when awarding an instrument pursuant to this section. The
required procedures shall include, at a minimum, the following:
(A) The school district shall prepare a request for sealed
proposals from qualified proposers. The school district shall include
in the request for sealed proposals an estimate of price of the
project, a clear, precise description of any preconstruction services
that may be required and the facilities to be constructed, the key
elements of the instrument to be awarded, a description of the format
that proposals shall follow and the elements they shall contain, the
standards the school district will use in evaluating proposals, the
date on which proposals are due, the timetable the school district
will follow in reviewing and evaluating proposals, and the process to
be used by the successful proposer for the award of subcontracts.
(B) The school district shall give notice of the request for
sealed proposals in the manner of notice provided in Section 20112 of
the Public Contract Code, with the latest notice published at least
10 days before the date for receipt of the proposals.
(C) A proposer must be prequalified in accordance with
subdivisions (b) to (m), inclusive, of Section 20111.6 of the Public
Contract Code, in order to submit a proposal. If used, electrical,
mechanical, and plumbing subcontractors 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. These prequalification requirements shall be included in an
instrument created pursuant to paragraph (1).
(D) The request for sealed proposals shall identify all criteria
that the school district will consider in evaluating the proposals
and qualifications of the proposers, including relevant experience,
safety record, price proposal, and other factors specified by the
school district. The price proposal shall include, at the school
district's discretion, either a lump-sum price for the instrument to
be awarded or the proposer's proposed fee to perform the services
requested, including the proposer's proposed fee to perform
preconstruction services or any other work related to the facilities
to be constructed, as requested by the school district. The request
for proposals shall specify whether each criterion will be evaluated
pass-fail or will be scored as part of the best value score, and
whether proposers must achieve any minimum qualification score for
award of the instrument under this section.
(E) For each scored criterion, the school district shall identify
the methodology and rating or weighting system that will be used by
the school district in evaluating the criterion, including the weight
assigned to the criterion and any minimum acceptable score.
(F) Proposals shall be evaluated and the instrument awarded under
this section in the following manner:
(i) All proposals received shall be reviewed to determine those
that meet the format requirements and the standards specified in the
request for sealed proposals.
(ii) The school district shall evaluate the qualifications of the
proposers based solely upon the criteria and evaluation methodology
set forth in the request for sealed proposals, and shall assign a
best value score to each proposal. Once the evaluation is complete,
all responsive proposers shall be ranked from the most advantageous
to the least advantageous to the school district.
(iii) The award of the instrument shall be made by the governing
board of the school district to the responsive proposer whose
proposal is determined, in writing by the governing board of the
school district, to be the best value to the school district.
(iv) If the selected proposer refuses or fails to execute the
tendered instrument, the governing board of the school district may
award the instrument to the proposer with the second highest best
value score if the governing board of the school district deems it to
be for the best interest of the school district. If the second
selected proposer refuses or fails to execute the tendered
instrument, the governing board of the school district may award the
instrument to the proposer with the third highest best value score if
the governing board of the school district deems it to be for the
best interest of the school district.
(v) Notwithstanding any other law, upon issuance of a contract
award, the school district shall publicly announce its award,
identifying the entity to which the award is made, along with a
statement regarding the basis of the award. The statement regarding
the school district's contract award and the contract file shall
provide sufficient information to satisfy an external audit.
(G) The governing board of the school district, at its discretion,
may reject all proposals and request new proposals.
(3) Following the award of an instrument created pursuant to
paragraph (1), and if the price proposal is a not a lump sum for the
instrument awarded, the successful proposer shall provide the school
district with objectively verifiable information of its costs to
perform the services requested under the instrument and shall select
subcontractors using a competitive selection process that is set
forth in the request for sealed proposals. Once any preconstruction
services are completed and subcontractors are selected, the
successful proposer and the school district shall finalize the price
for the services to be provided under the instrument that is
consistent with the price estimate in the request for proposal. The
contract file shall include documentation sufficient to support the
final price determination.
(4) Nothing in paragraph (2) shall preclude a school district from
segregating the request for proposals into a request for
qualifications, followed by a request for proposals with price
information from the proposers deemed most qualified by the school
district, provided that the procedures specified in paragraphs (2)
and (3) are otherwise followed.
(b) Notwithstanding Sections 17297 and 17402, a school district
may enter into an instrument created pursuant to paragraph (1) of
subdivision (a) before written approval by the Department of General
Services' Division of the State Architect if the instrument provides
that no work for which a contractor is required to be licensed in
accordance with Article 5 (commencing with Section 7065) of Chapter 9
of Division 3 of the Business and Professions Code and for which
Division of the State Architect approval is required shall be
performed before receipt of the required Division of the State
Architect approval.
(b)
(c) 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.
(d) (1) This subdivision shall apply retroactively to a project
for the construction, alteration, repair, or improvement of any
structure, building, or other improvement of any kind that was leased
through an instrument pursuant to this section before July 1, 2015.
If at any time the instrument is determined to be invalid by a court
of competent jurisdiction, the contractor who entered into the
instrument with the school district shall be entitled to be paid the
reasonable cost of the labor, equipment, materials, and services
furnished by the contractor before the date of the determination that
the instrument is invalid if all of the following conditions are
met:
(A) The contractor proceeded with construction, alteration,
repair, or improvement based upon a good faith belief that the
instrument was valid.
(B) The school district has reasonably determined that the work
performed is satisfactory.
(C) Contractor fraud did not occur in the obtaining or performance
of the instrument.
(D) The instrument does not otherwise violate state law related to
the construction or leasing of public works of improvement.
(2) In no event shall payment to the contractor pursuant to this
section exceed either of the following:
(A) The contractor's costs as included in the instrument plus the
cost of any approved change orders.
(B) The lease payments made, less profit, at the point in time the
instrument is determined to be invalid by a court of competent
jurisdiction.
(3) Notwithstanding paragraph (1), this subdivision shall not
affect any protest and legal proceedings, whether contractual,
administrative, or judicial, to challenge the award of the public
works contract, nor affect any rights under Section 337.1 or 337.15
of the Code of Civil Procedure.
(c)
(e) This section shall remain in effect only until
January 1, 2019, and as of that date July 1,
2022, and as of January 1, 2023, is repealed, unless a later
enacted statute, that is enacted before January 1, 2019,
20 23, deletes or extends that date.
SEC. 2. SEC. 3. Section 17406 of the
Education Code, as added by Section 2 of Chapter 408 of the Statutes
of 2014, is amended to read:
17406. (a) Notwithstanding Section 17417, the governing board of
a school district may let, for a minimum rental of one dollar ($1) a
year, to any person, firm, or corporation any real property that
belongs to the school district if the instrument by which this
property is let requires the lessee 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.
(b) Any rental of property that complies with subdivision (a)
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 become operative on January 1,
2019. July 1, 2022.