BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1170 (Wieckowski) - Public contracts: water pollution
prevention plans: delegation
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|Version: April 6, 2016 |Policy Vote: GOV. & F. 7 - 0, |
| | E.Q. 7 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 23, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1170 would prohibit a public agency from requiring
a contractor on a design-bid-build project to develop a
stormwater pollution prevention plan (SWPPP), or to assume
responsibility for completeness and accuracy of a SWPPP.
Fiscal
Impact:
Unknown significant costs to the Department of Transportation
(Caltrans). Caltrans indicates it would likely incur
additional costs on approximately 200 projects each year
related to penalties for violations of SWPPP permit
requirements (even those resulting from a contractor's
actions), certain staff-related expenses, and potential
impacts on overall project costs. (State Highway Account)
See staff comments.
SB 1170 (Wieckowski) Page 1 of
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Unknown significant costs to the Department of General
Services (DGS) related to increased exposure to penalties for
violations of SWPPP permit requirements (even those resulting
from a contractor's actions), and additional staffing,
training, or contract costs related to SWPPP development and
oversight on an estimated 20-100 projects each year. (General
Fund) See staff comments.
Unknown potential costs to other state entities that engage in
public contracting.
Unknown significant local costs to cities, counties, special
districts, and school districts, potentially reimbursable by
the state General Fund. Actual state-reimbursable costs would
depend upon a determination by the Commission on State
Mandates regarding what expenses incurred by a local agency
are deemed to be subject to state reimbursement. See staff
comments.
Background: In California, the federal Clean Water Act and the state
Porter-Cologne Water Quality Control Act charge the State Water
Resources Control Board (SWRCB) with the regulation and
protection of water quality. Under these statutes, discharges
of pollutants to surface waters are generally prohibited unless
the discharger obtains a permit from SWRCB. In response to
federal regulations, the SWRCB adopted a Construction General
Permit requirement that covers stormwater runoff as a result of
construction activities. Those permit requirements were
significantly revised in 2009.
Public and private owners of construction projects that disturb
one or more acres of land must comply with SWRCB permit
requirements that regulate the discharge of stormwater and
non-stormwater (such as improper dumping, spills, or leakage
from storage tanks) from certain construction activities. The
requirements are enforced by SWRCB's nine Regional Water Quality
Control Boards (regional boards). Existing law requires the
development of a SWPPP that demonstrates compliance with SWRCB
permit requirements. A SWPPP is a comprehensive, detailed,
site-specific, written document that identifies potential
sources of stormwater, describes control measures and best
management practices that will be used to reduce or eliminate
pollutants in stormwater discharges, and identifies procedures
that the operator of the project site will implement to comply
SB 1170 (Wieckowski) Page 2 of
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with permit terms and conditions.
A project's SWPPP may be developed by the project owner or a
contractor, but in either case it must be prepared and certified
by a Qualified SWPPP Developer (QSD), who must be a registered
engineer or other licensed professional. Many other SWPPP tasks
(such as site inspections) must be conducted directly by, or
under the supervision of, a QSD or Qualified SWPPP Practitioner
(QSP), who must also be certified. There are extensive
qualification and training requirements for both the QSD and
QSP.
Typically, the owner of the construction site is designated the
"discharger" from the site and is therefore the "Legally
Responsible Person" under the SWRCB permit. Consequently, the
party required to ensure compliance with permit terms is the
property owner, not the contractor. There are serious potential
costs for failure to comply with the permit; any person who
violates permit conditions is subject to a civil penalty of up
to $37,500 per calendar day of a violation, plus sanctions
provided by federal law.
It is common practice for public agencies to delegate the
responsibility for preparing a SWPPP to a contractor because the
contractor has control over the sequencing of various aspects of
a construction project, which may have an impact on strategies
for controlling stormwater runoff.
Proposed Law:
SB 1170 would prohibit a public entity, charter city, or
charter county from delegating to a contractor the development
of a plan, which is defined as a SWPPP, water pollution control
program, or any other plan required by a regional water quality
control board to prevent or reduce water pollution or runoff on
a public works project. The bill would also prohibit those
public entities from requiring a contractor to assume
responsibility for the completeness and accuracy of the plan
developed by the public entity. These prohibitions would not
apply to contracts that use the design-build, best value, or
construction manager at-risk procurement methods.
SB 1170 (Wieckowski) Page 3 of
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Related
Legislation: AB 1315 (Alejo), which was held on the Assembly
Appropriations Committee's Suspense File last year, was nearly
identical to this bill, but that bill did not exempt contracts
using alternate procurement methods, did not specify it was
declaratory of existing law, and did not include language
specifying a legislative finding that there is no mandate in the
bill.
Staff
Comments: By prohibiting a public agency from requiring a
contractor on a design-bid-build project to develop a SWPPP or
assuming responsibility for completeness and accuracy of a plan,
this bill effectively forces the public agency to prepare a
SWPPP in-house, or to contract with another entity to perform
those functions, prior to soliciting bids for the construction
of a project. This shift of responsibility, and underlying
liability, would apply to both state and local public entities
that contract for public works projects.
Caltrans estimates the bill's requirements would apply to
approximately 200 public works projects annually that require
the preparation of a SWPPP, while DGS estimates it would apply
to 20-100 projects each year. State agencies would have to
revise guidance manuals, modify training materials, and train
staff on new processes. There would also be costs to train and
certify staff as QSDs and QSPs to prepare SWPPPs and provide
oversight for construction projects, or they may opt to contract
out for those services. Caltrans and DGS also indicate that
they would need to make assumptions about construction staging,
sequencing, and temporary drainage needs when preparing a SWPPP
and bid solicitation documents, which may result in an increase
in contractor claims and change orders during the construction
phase. SB 1170 would shift full legal responsibility for
construction project water quality, and make public entities
responsible for violations of permit requirements, even if the
contractor was at fault for a discharge. In sum, Caltrans and
DGS indicate that the bill would result in unknown, but
significant, increased costs.
Local agencies would likely also incur additional costs on
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public works projects for similar reasons. Some of these costs
would be mitigated by lower bids on construction contracts since
contractors would not include costs to prepare a SWPPP in their
bids, which are typically marked up to mitigate risk factors.
However, these costs and additional risk and liability factors
would be shifted from the contractor to the local agency.
Whether any increased local costs would be subject to
reimbursement from the state is unknown, and subject to a
determination by the Commission on State Mandates that the
bill's requirements constitute a higher level of service. Staff
notes that the California Supreme Court has opined that "simply
because a state law or order may increase the costs borne by
local government in providing services, this does not
necessarily establish that the law or order constitutes an
increased or higher level of the resulting service to the public
under article XIII B, section 6, and Government Code section
17514." (San Diego Unified School Dist. v. Commission on State
Mandates (2004) 33 Cal.4th 859, 877).
Staff notes that while the bill includes a legislative finding
that it contains no mandate that will result in costs incurred
by a local agency or school district for a new program or higher
level of service which require reimbursement, the Legislature
cannot limit a constitutional right to reimbursement through a
finding that an act does not impose a mandate. The Commission
on State Mandates has cited several decisions where the courts
have determined that the evidence contradicts what is in
statute. For example, the courts noted in Carmel Valley Fire
Protection District v. State of California (1987) 190 Cal.App.
3rd 521, 541, that the Legislature itself concluding that costs
are not reimbursable through findings, disclaimers, and control
language is a "transparent attempt to do indirectly that which
cannot lawfully be done directly." In addition, in Long Beach
Unified School District v. State of California (1990) 225
Cal.App. 3rd 155, 184, the courts noted, in reference to a
finding by the Legislature that an Executive Order does not
impose a state mandated local program, that unsupported
legislative disclaimers are insufficient to defeat a
constitutional right to reimbursement.
To the extent the Commission finds that the bill imposes a
higher level of service, and identifies local costs that are
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subject to reimbursement, this bill could result in significant
General Fund costs.
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