BILL NUMBER:  SB 802
  VETOED	DATE: 10/12/2009




To the Members of the California State Senate:

I am returning Senate Bill 802 without my signature.

Under current law, public entities, at a minimum, must retain 5
percent of a payment to a contractor completing a public works
project.  This bill would restrict the State's ability to retain more
than 5 percent of payment and no more than 5 percent of the public
work contract price.

When a contractor fails to complete a public works project, the
public entity needs recourse to ensure that the project gets
completed.  Public works contracts have a higher level of risk as
public entities usually have to accept the low bidder.  Though there
are options available to the State to go after a contractor who fails
to complete the terms of a public works contract, retaining portions
of payment to the contractor provides incentive for the contractor
to complete the project.   While I am sympathetic with the concerns
of subcontractors, the State's responsibility is to protect the
taxpayer to make certain that public works projects are completed
correctly and within budget; limiting the retention amount hampers
the State's ability to do that.

For these reasons, I am returning this bill.

Sincerely,



Arnold Schwarzenegger