BILL ANALYSIS
AB 2181
Page 1
ASSEMBLY THIRD READING
AB 2181 (Hagman)
As Amended May 10, 2010
Majority vote
BUSINESS & PROFESSIONS 9-2 APPROPRIATIONS
14-0
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|Ayes:|Hayashi, Emmerson, |Ayes:|Fuentes, Conway, Bradford, |
| |Conway, Eng, Hernandez, | |Charles Calderon, Coto, |
| |Hill, Ma, Niello, Smyth | |Davis, De Leon, Hall, |
| | | |Harkey, Miller, Nielsen, |
| | | |Norby, Skinner, Torlakson |
|-----+-------------------------+-----+----------------------------|
|Nays:|Nava, Ruskin | | |
| | | | |
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SUMMARY : Authorizes specified state agencies to perform
specified projects without the approval of the Department of
General Services (DGS) if the cost estimate does not exceed
$600,000, and allows those agencies to budget those projects as
minor capital outlay projects. Specifically, this bill :
1)Increases the limit of specified capital outlay projects from
$400,000 to $600,000 and allows state agencies to budget those
projects as a minor capital outlay projects and carry them out
without DGS approval.
2)Requires the Department of Finance (DOF) to adjust the minor
capital outlay budget limit every two years to reflect the
percentage change in the annual California Construction Index
(CCI) used by DGS.
3)Defines "department" to mean any of the following:
a) Department of Water Resources (DWR);
b) Department of Transportation (Caltrans);
c) Department of Boating and Waterways (DBW);
d) Department of Corrections and Rehabilitation (CDCR);
AB 2181
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e) Military Department (MD); or,
f) DGS for all other state agencies.
4)Requires that whenever statute provides for any project that
does not fall under the jurisdiction of DWR, Caltrans, DBW,
CDCR, or MD, the project shall be under the sole charge and
direct control of DGS, instead of Caltrans.
5)Makes technical and clarifying changes.
EXISTING LAW establishes the State Contract Act, and authorizes
specified departments, where the nature of the work in the
opinion of the department is such that its services in
connection with a project are not required, to permit the
carrying out of the project directly by the state agency
concerned with the project, if the estimated project cost does
not exceed $400,000, except as provided.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, negligible fiscal impact, as the bill only impacts
the budgeting and administration of state capital outlay
projects.
COMMENTS : According to the author's office, "CDCR conducts
minor capital outlay projects under a cap of $400,000. This
limit was established in 2001 and has not been adjusted since.
The cost of construction materials, such as steel, concrete,
copper wiring and other essential materials along with costs
associated with projects at correctional facilities, such as
providing security, have increased over the years. This led to
a rise in the overall cost of implementing proposals which
previously fell into the category of minor capital outlay
projects.
"Proposals that exceed the $400,000 limit are added to the major
capital outlay project backlog. They are recommended by DOF to
be included in that year's budget and are placed into
competition with other critical construction projects?. AB 2181
will increase the minor capital outlay cap from $400,000 to
$600,000, reflecting the increase in construction costs and
adjusting the cap to the CCI."
According to a CDCR analysis, due to the rising costs of
AB 2181
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construction materials and projects at correctional facilities,
construction costs for many projects exceed the existing minor
capital outlay limit of $400,000 established in 2001. In fiscal
year (FY) 2008-09, approximately 28 proposals considered for
minor capital outlay projects exceeded the existing limit due to
the added costs associated with correctional facility
construction. Those projects deemed critical are added to the
major capital outlay project list; however, those projects are
then subject to what DOF recommends be included in that year's
budget act, thus competing with other critical construction
project which may then be subject to a court order, lawsuit,
notice of violation, or a cease and desist order. Currently,
CDCR's major capital outlay project priority list consists of
approximately 140 proposals projected through FY 2013-14.
The CDCR analysis states that necessary upgrades to comply with
the State Fire Marshall's orders at the California Institute for
Men housing unit have shifted minor capital outlay projects to
major capital outlay projects due to rising inflation costs.
CDCR estimates the current cost of the latest phase of
individual housing unit upgrades to be approximately $500,000
per unit.
CDCR states that this legislation is necessary to keep up with
vital construction projects required for health and safety.
CDCR adds that this proposal will not affect CDCR's total annual
budget of $7.5 million for minor capital outlay projects.
The revision to provide DGS, instead of Caltrans, with direct
control of projects not under the jurisdiction of DWR, Caltrans,
DBW, CDCR, or MD is a technical cleanup provision.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301
FN: 0004212