BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 474|
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VETO
Bill No: SB 474
Author: Ducheny (D)
Amended: 8/2/10
Vote: 27 - Urgency
SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 7/7/09
AYES: Lowenthal, Ashburn, DeSaulnier, Harman,
Hollingsworth, Kehoe, Pavley, Simitian, Wolk
NO VOTE RECORDED: Huff, Oropeza
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 38-0, 8/27/09
AYES: Aanestad, Alquist, Ashburn, Benoit, Calderon,
Cogdill, Corbett, Correa, Cox, Denham, DeSaulnier,
Ducheny, Dutton, Florez, Hancock, Harman, Hollingsworth,
Huff, Kehoe, Leno, Liu, Lowenthal, Maldonado, Negrete
McLeod, Oropeza, Pavley, Price, Romero, Runner, Simitian,
Steinberg, Strickland, Walters, Wiggins, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Cedillo, Padilla
ASSEMBLY FLOOR : 75-0, 8/16/10 - See last page for vote
SENATE FLOOR : 35-0, 8/19/10
AYES: Aanestad, Alquist, Ashburn, Calderon, Cedillo,
Cogdill, Corbett, Correa, Denham, DeSaulnier, Ducheny,
Dutton, Emmerson, Florez, Hancock, Harman, Hollingsworth,
Huff, Kehoe, Leno, Liu, Lowenthal, Negrete McLeod,
Padilla, Pavley, Price, Romero, Runner, Simitian,
Steinberg, Strickland, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Oropeza, Walters, Wiggins, Vacancy,
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Vacancy
SUBJECT : Pilot programs
SOURCE : Author
DIGEST : This bill 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.
Assembly Amendments revise and recast the bill with a
similar intent as it left the Senate, but delete the
requirements in the bill related to the California
Transportation Commission, and delete the bills legislative
intent language.
ANALYSIS :
Public-Private Partnerships (PPPs) . Existing law, as
established by SB 4xx (Cogdill), Chapter 2, Statutes of
2009, Second Extraordinary Session, allows regional
transportation agencies and the California Department of
Transportation (Caltrans) to enter into an unlimited number
of lease or concession agreements with private entities for
the design, finance, construction, maintenance, or
operation of highway, street, or rail projects, subject to
specified terms and conditions. The authority to enter
into these PPPs sunsets on January 1, 2017.
SB 4xx requires California Transportation Commission (CTC),
in cooperation with the Legislative Analyst's Office (LAO),
to prepare an annual report on the progress and operation
of each facility developed under this 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 PPPs.
Design-Build . Existing law defines design-build as a
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"procurement process in which both the design and
construction of a project are procured from a single
entity." SB 4xx, which was passed in conjunction with the
budget agreement in February, 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. The CTC is responsible for authorizing
transportation entities to use this procurement method.
The authority to use design-build expires on January 1,
2014.
With regard to reporting, SB 4xx requires that each
transportation entity that utilizes design-build submit a
progress report to CTC not later than June 30th of each
year after the contract is awarded. The progress report
shall include the following information:
1.A description of the project.
2.The design-build entity that was awarded the project.
3.The estimated and actual costs of the project.
4.The estimated and actual schedule for project
completion.
5.A description of any written protests concerning any
aspect of the solicitation, bid, proposal, or award of
the design-build project, including, but not limited to,
the resolution of the protests.
6.An assessment of the prequalification process and
criteria utilized under this chapter.
7.A description of the required labor compliance program
and an assessment of the impact of this requirement on a
project.
8.A description of the method used to evaluate the bid,
including the weighting of each factor and an assessment
of the impact of this requirement on a project.
9.A description of any challenges or unexpected problems
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that arose during the construction of the project and a
description of the solutions that were considered and
ultimately implemented to address those challenges and
problems.
10.Recommendations to improve the design-build process of
construction procurement authorized under this chapter.
The CTC is required to compile the information provided by
each transportation entity and submit a report to the
Legislature on an annual basis.
In addition to the reporting requirements, SB 4xx requires
CTC to establish a peer review committee to conduct an
evaluation of the 15 projects selected to utilize
design-build. The peer review committee is required to
compare design-build projects to similar transportation
projects that used the design-bid-build method of
procurement (the standard method of procurement) and shall
consider whether the projects were on time and on budget.
The CTC is required to submit a midterm report of its
findings to the Legislature no later than June 30, 2012 and
a final report no later than June 30, 2015.
Design-Sequencing . Existing law defines design-sequencing
as "a method of contracting that enables the sequencing of
design activities to permit each construction phase to
commence when design for that phase is complete, instead of
requiring design for the entire project to be completed
before commencing construction."
Existing law authorizes Caltrans to use design-sequencing
for up to 12 transportation projects. This authority
expires on January 1, 2010. Not later than July 1, 2006
and July 1 of each subsequent year during which a contract
is underway, Caltrans is required to prepare a status
report on its contracting methods, procedures, costs, and
delivery schedules.
Upon completion of all design-sequencing contracts, but no
later than January 1, 2010, existing law requires Caltrans
to establish a peer review committee and direct it to
prepare a report for submittal to the Legislature that
describes and evaluates the outcomes of the contracts,
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including the positive and negative aspects of using
design-sequencing as a contracting method.
CTC's Annual Report to the Legislature . Existing law
requires CTC to submit, by December 15th of each year, an
annual report that summarizes the commission's prior-year
decisions in allocating transportation funds and identifies
timely and relevant transportation issues facing the state.
This bill 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.
Related Legislation
AB 729 (Evans) extends the sunset date from January 1, 2011
until January 1, 2015 that transit operators may utilize
the design-build method of contracting for transit
projects.
AB 732 (Jeffries) extends the sunset date from January 1,
2010 to January 1, 2012 that Caltrans may utilize the
design-sequencing method of contracting for a
transportation project.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/16/10)
Professional Engineers I California Government
OPPOSITION : (Verified 8/16/10)
Department of Transportation
Transportation California
American Council of engineering Companies
ARGUMENTS IN SUPPORT : According to the author's office,
the purpose of the bill is two-fold. The first purpose is
to require agencies utilizing an alternative financing or
contracting method to justify the use of that method by
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making a finding as to its expected benefits and to assess
whether or not the project is achieving those benefits.
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 474 without my signature.
This bill would require a lead agency on a project,
prior to entering an agreement to develop the project
using a design-build or public-private partnership
(P3) model, to pass a resolution identifying the
anticipated benefits from using those methods
compared to using traditional contracting or
financing methods.
This bill is simply unnecessary. Under existing law,
public agencies have the authority to utilize design
build and P3 to develop and finance transportation
projects. Decisions about when and where the use of
these strategies will be effective is a decision for
qualified transportation professionals. Requiring
elected officials to issue a finding every time an
agency wishes to use one of these tools to deliver a
project would create an unnecessary hurdle
potentially leading to project delays.
For this reason I am unable to sign this bill."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Carter, Chesbro, Conway,
Cook, Coto, De La Torre, De Leon, DeVore, Eng, Evans,
Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines,
Galgiani, Garrick, Gatto, Gilmore, Hagman, Hall, Harkey,
Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,
Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma,
Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, John A. Perez
NO VOTE RECORDED: Bass, Blakeslee, Charles Calderon, Davis,
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Vacancy
JJA:do 10/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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