BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
258 (Oropeza)
Hearing Date: 5/11/2009 Amended: 4/21/2009
Consultant: Bob Franzoia Policy Vote: B,P&ED 7-3
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BILL SUMMARY: SB 258 would, after January 1, 2012, prohibit a
contractor from performing work as a contractor or subcontractor
on a public work contracted for the state or a local agency
unless he or she has obtained a public works certification from
a state certifying agency to be determined by the Legislature.
This bill would require the certifying agency to establish and
validate standards of competency through a prequalification
certification system by January 1, 2011. The certifying agency
would also be authorized to deny or revoke a public works
certification. This bill would require the agency to charge
each applicant a fee in an amount sufficient to pay for the
costs of administering prequalification and certification, not
to exceed certain amounts. This bill would create the
continuously appropriated Public Works Certification Fund in
which fee moneys would be deposited and used only for these
purposes. Because this bill would create a continuously
appropriated fund, this bill would make an appropriation.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
New certification for public
works contractors
- licensing $389 $688 $377 Special*
$115 ongoing
- enforcement $0 $161 $321
$321 ongoing
- testing $60
Application fee ($825) ($825) ($130) Special*
(revenue) ($130) ongoing
* Public Works Certification Fund
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STAFF COMMENTS: Based on an analysis of Contractors' State
License Board (CSLB) license classifications, it is estimated
there will be 33,000 public works certification applications
initially and 2,600 applications ongoing.
This bill indicates that the public works certification shall be
obtained from a state certifying agency to be determined by the
Legislature. This lack of specificity prevents implementation
of the provisions of the bill. A version of this bill from a
previous session required the CSLB be responsible for
implementing the program. Staff recommends the bill be amended
to specify the CSLB be the certifying agency with the
understanding
that a different and presumably more appropriate, certifying
agency may be identified at a later time.
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SB 258 (Oropeza)
This bill states the certifying agency may charge a one-time
application fee of no more than $65 until December 31, 2014, and
no more than $125 beginning January 1, 2015. Assuming an
application fee of $50, this bill would generate the following
revenue:
- 2010-11. $825,000 (33,000 applications/2 x $50)
- 2011/12: $825,000 (33,000 applications/2 x $50)
- 2012-13: $130,000 (2,600 applications x $50)
- Ongoing: $130,000 (2,600 applications x $50)
In order to maintain legislative oversight, staff recommends the
bill be amended to delete the continuous appropriation.
This bill is similar to SB 1698 (Romero) 2008 which was vetoed
by the Governor with the following message:
I believe that sufficient safeguards are already in place to
prevent contractors from bidding on public works projects if
they fail to comply with current Labor Code provisions. This
bill would create barriers to small business by adding
additional requirements to become a qualified bidder on public
works projects, while providing little additional value to the
public works process. By creating this barrier, competition on
public works projects could be reduced, that may result in
increased bid and project costs.