BILL ANALYSIS
SB 474
Page 1
SENATE THIRD READING
SB 474 (Ducheny)
As Amended August 2, 2010
2/3 vote. Urgency
SENATE VOTE :38-0
TRANSPORTATION 10-1 APPROPRIATIONS 15-0
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|Ayes:|Bonnie Lowenthal, |Ayes:|Fuentes, Conway, |
| |Jeffries, Blumenfield, | |Bradford, |
| |Buchanan, Eng, Galgiani, | |Charles Calderon, Coto, |
| |Hayashi, Miller, Niello, | |Davis, |
| |Solorio | |De Leon, Gatto, Hall, |
| | | |Miller, Nielsen, Skinner, |
| | | |Solorio, Torlakson, |
| | | |Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Norby | | |
| | | | |
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SUMMARY : Requires a lead transportation agency, prior to
entering into a public-private partnership or design-build
agreement, to pass a resolution that identifies the benefits
anticipated from using the alternative project delivery or
financing methods over traditional methods; this is an urgency
measure.
EXISTING LAW:
1)Sets forth provisions governing public works contracting.
These provisions generally prohibit public agencies from
contracting with the same firm for both the design and the
construction phases of a project.
2)Generally requires public works construction contracts to be
awarded to the lowest responsible bidder and only after
complete plans have been developed.
3)Establishes a number of alternative project delivery and
financing pilot programs, including the following programs
specifically referenced in SB 474:
SB 474
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a) Public-private partnership (P3) agreements: P3
agreements are an alternative means of providing both
project delivery and financing. SBX2 4 (Cogdill), Chapter
2, Statutes of 2009, allows regional transportation
agencies and the California Department of Transportation
(Caltrans) to enter into an unlimited number of agreements
with private entities for the design, finance,
construction, maintenance, or operation of a highway,
street, or rail projects, subject to specified terms and
conditions. The authority to enter into P3 agreements
using this authority sunsets on January 1, 2017.
b) Design-build: Design-build, also authorized by SBX2 4,
is a project delivery procurement method in which both the
design and construction of a project are procured from a
single entity. Among other things, SBX2 4 established the
Design-build Demonstration Program to permit Caltrans and
local transportation entities to utilize design-build for
up to a total of 15 transportation projects, subject to
specified conditions. SBX2 4 vests the CTC with
responsibility for authorizing transportation entities to
use this procurement method. The authority to use
design-build expires on January 1, 2014.
4 Includes requirements that agencies evaluate the use of these
alternative project delivery and financing programs and report
their findings to the Legislature, as follows:
a) SBX2 4 requires CTC, in cooperation with the Legislative
Analyst's Office, to prepare an annual report on the
progress and operation of each facility developed under P3
authority. The report shall include a review of the
performance standards established in the lease agreement, a
financial analysis, and any concerns or recommendations
regarding P3; and,
b) Regarding design-build, SBX2 4 requires each
transportation entity that utilizes design-build to submit
a progress report to CTC not later than June 30th of each
year after the contract is awarded.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable costs to Caltrans or local
SB 474
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transportation agencies to prepare the required resolutions
prior to entering into a P3 or design-build agreement.
COMMENTS : Authority to use P3s or design-build for
transportation projects is relatively new and very limited. The
Legislature's intent in authorizing the use of these alternative
methods on a pilot basis was to test the potential benefits that
these different approaches might realize; as a result, use of
these pilot methods was conditioned upon on significant
evaluation and reporting requirements that are generally geared
at evaluating and reporting on the results of the pilot project.
Asking an agency to identify up front the benefits it hopes to
attain by using one of these alternative methods of project
delivery or financing is not without merit. In theory, the use
of these alternative methods involves some risk. Presumably,
any agency that pursues the use of one of these methods
anticipates that there will be benefits beyond the risks. It
would be helpful to know up front, via a resolution by the
transportation agency's governing board, what those expectations
may be so that, as the project progresses, sometimes over the
span of a number of years, the original intent of the pilot
project will not be lost.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
FN: 0005591