BILL ANALYSIS
AB 1047
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Date of Hearing: May 2, 2007
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
AB 1047 (Houston) - As Introduced: February 22, 2007
Policy Committee: Business and
Professions Vote: 10-0 (Consent)
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the State Controller to send a notice to
public agencies detailing the existence of, and the benefits to,
public agencies under the Uniform Public Construction Cost
Accounting Act (Act).
FISCAL EFFECT
Minor annual costs, probably less than $25,000, for the
Controller to prepare and mail information about the Act to
approximately 6,000 local government entities that have not yet
elected to use the Act.
COMMENTS
1)Background. Current law generally requires public agencies to
obtain competitively bid contracts for construction projects
costing more than $15,000. This limit varies depending on the
public agency and whether it is a city, county, special
district, or school district, and other variables. This
threshold is commonly referred to as the "force account,"
whereby a public agency may use its own forces (i.e., public
employees) as long as the amount of the contract does not
exceed the limit.
Current law further allows public agencies to use their own
employees on construction projects up to $30,000, and use
informal competitive bidding procedures for construction
projects up to $125,000, if they agree to the cost accounting
procedures set forth under the Act. The Act was created in
1983 as a voluntary program intended to provide flexibility in
AB 1047
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the execution of public works projects, accelerate project
delivery, and provide uniformity in the cost accounting
standards for construction contracts that are used to
determine when projects must be put out for bid (force account
limit). Generally, public agencies that do not participate
under the provisions of the Act may use informal bidding
procedures for contracts that cost up to their force account
limit.
2)Purpose . In 2006, Assemblyman Houston carried AB 350, which
raised the threshold at which fire protection districts with
budgets under $1 million must award contracts for special
services through competitive bidding from $10,000 to $25,000.
During debate on this issue, Houston pledged to work with
other interested parties to find a way to increase awareness
of the Cost Accounting Act, without having to do special carve
outs for different agencies and interests.
According to the author, very few agencies actually know of
the existence of the Act, and it is used infrequently.
Instead, many agencies seek special legislation to achieve the
same results. This bill is intended as an education campaign
to help public agencies understand the availability and
benefits of the Act.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081