Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1581

Introduced by Assembly Member Buchanan

February 3, 2014

An act to amend begin delete 17070.51 end delete begin insert , repeal, and add Section 17407 end insert of the Education Code, begin insert and to amend Section 20111.6 of the Public Contract Code, end insert relating to school facilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 1581, as amended, Buchanan. School begin delete facilities. end delete begin insert facilities: construction contracts. end insert

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Existing law requires, until January 1, 2019, the governing board of a school district that enters into a contract for a public project, as defined, for which the board uses moneys received pursuant to the Leroy F. Greene School Facilities Act of 1998 or moneys from future state school bonds for a public project that involves a projected expenditure of $1,000,000 or more, to require prospective bidders for a construction contract to complete and submit a standardized prequalification questionnaire and financial statement. Existing law requires the questionnaire and statement to be verified under oath by the bidder and for the district to adopt and apply a uniform system of rating bidders on the basis of the questionnaire and statement.

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Existing law also authorizes the governing board to enter into an agreement with the lowest responsible bidder to construct, or provide for the construction of, a building to be leased and used by the district upon a designated site. Existing law requires the instrument to provide that the title to the building and site to vest in the district at the end of the lease.

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This bill would, until January 1, 2019, require a prospective bidder for a contract with a school district, for construction of a building to be leased and used by the school district upon a designated site, to comply with the above-described prequalification questionnaire and financial statement requirements when the agreement is for a public project using moneys received pursuant to the Leroy F. Greene School Facilities Act of 1998 or moneys from future state school bonds that involves a projected expenditure of $1,000,000 or more. By requiring additional persons to complete a questionnaire and statement that is verified under oath and increasing the duties of local officials, the bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

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With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

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Existing law, the Leroy F. Greene School Facilities Act of 1998, requires the State Allocation Board to allocate to applicant school districts, prescribed per-unhoused-pupil state funding for construction and modernization of school facilities, including hardship funding, and supplemental funding for site development and acquisition. The board is required to impose specified penalties if a material inaccuracy is found in an eligibility or funding application.

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This bill would make nonsubstantive changes in the provision regarding penalties for material inaccuracies.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 17407 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

17407.  

begin insert (a) end insert begin insert   end insert The governing board of any school district may
enter into an agreement with any person, firm, or corporation under
which that person, firm, or corporation shall construct, or provide
for the construction of, a building to be used by the district upon
a designated site and lease the building and site to the district. The
instrument shall provide that the title to the building and site shall
vest in the district at the expiration of the lease, and may provide
the means or method by which the title to the building and site
shall vest in the district prior to the expiration of the lease, and
shall contain begin delete such end delete other terms and conditions as the governing
board of the district deems to be in the best interest of the district.

begin delete

The

end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert agreement entered into shall be with the lowest
responsible bidder who shall give the security that any board
requires. The board may reject all bids. For the purpose of securing
bids the board shall publish at least once a week for two weeks in
some newspaper of general circulation published in the district,
or if there is no paper, then in some paper of general circulation
circulated in the county, a notice calling for bids, stating the
proposed terms of the agreement and the time and place where
bids will be opened.

begin insert

(c) If the agreement meets the criteria of subdivision (a) of
Section 20111.6 of the Public Contract Code, the person, firm, or
corporation entering into an agreement with the governing board
of a school district under this section shall be subject to the same
requirements for prospective bidders described in Section 20111.6
of the Public Contract Code.

end insert begin insert

(d) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 17407 is added to the end insert begin insert Education Code end insert begin insert , to read: end insert

begin insert

begin insert 17407. end insert   

(a) The governing board of any school district may
enter into an agreement with any person, firm, or corporation
under which that person, firm, or corporation shall construct, or
provide for the construction of, a building to be used by the district
upon a designated site and lease the building and site to the
district. The instrument shall provide that the title to the building
and site shall vest in the district at the expiration of the lease, and
may provide the means or method by which the title to the building
and site shall vest in the district prior to the expiration of the lease,
and shall contain other terms and conditions as the governing
board of the district deems to be in the best interest of the district.

(b) The agreement entered into shall be with the lowest
responsible bidder who shall give the security that any board
requires. The board may reject all bids. For the purpose of
securing bids the board shall publish at least once a week for two
weeks in some newspaper of general circulation published in the
district, or if there is no paper, then in some paper of general
circulation circulated in the county, a notice calling for bids,
stating the proposed terms of the agreement and the time and place
where bids will be opened.

(c) This section shall become operative on January 1, 2019.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 20111.6 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

20111.6.  

(a) This section shall apply only to public projects,
as defined in subdivision (c) of Section 22002, for which the
governing board of the district uses funds received pursuant to the
Leroy F. Greene School Facilities Act of 1998 (Chapter 12.5
(commencing with Section 17070.10) of Part 10 of Division 1 of
Title 1 of the Education Code) or any funds from any future state
school bond for a public project that involves a projected
expenditure of one million dollars ($1,000,000) or more.

(b) If the governing board of the district enters into a contract
meeting the criteria of subdivision (a), then the governing board
of the district shall require that prospective bidders for a
construction contract begin insert , including a contract for the construction of
a building to be used and leased by the district pursuant to Sections
17406 and 17407 of the Education Code, end insert complete and submit to
the board of the district a standardized prequalification
questionnaire and financial statement. The questionnaire and
financial statement shall be verified under oath by the bidder in
the manner in which civil pleadings in civil actions are verified.
The questionnaires and financial statements shall not be public
records and shall not be open to public inspection.

(c) The board of the district shall adopt and apply a uniform
system of rating bidders on the basis of the completed
questionnaires and financial statements.

(d) The questionnaire and financial statement described in
subdivision (b), and the uniform system of rating bidders described
in subdivision (c), shall cover, at a minimum, the issues covered
by the standardized questionnaire and model guidelines for rating
bidders developed by the Department of Industrial Relations
pursuant to subdivision (a) of Section 20101.

(e) Each prospective bidder shall be furnished by the school
district letting the contract with a standardized proposal form that,
when completed and executed, shall be submitted as his or her bid.
Bids not presented on the forms so furnished shall be disregarded.

(f) A proposal form required pursuant to subdivision (e) shall
not be accepted from any person or other entity that is required to
submit a completed questionnaire and financial statement for
prequalification pursuant to subdivision (b) or from any person or
other entity that uses a subcontractor that is required to submit a
completed questionnaire and financial statement for
prequalification pursuant to subdivision (b), but has not done so
at least 10 business days prior to the date fixed for the public
opening of sealed bids or has not been prequalified for at least five
business days prior to that date.

(g) The board of the district may establish a process for
prequalifying prospective bidders pursuant to this section on a
quarterly or annual basis and a prequalification pursuant to this
process shall be valid for one calendar year following the date of
initial prequalification.

(h) This section shall not preclude the governing board of the
district from prequalifying or disqualifying a subcontractor.

(i) For purposes of this section, bidders shall include the general
contractor and, if utilized, all electrical, mechanical, and plumbing
subcontractors.

(j) If a public project covered by this section includes electrical,
mechanical, or plumbing components that will be performed by
electrical, mechanical, or plumbing contractors, a list of
prequalified general contractors and electrical, mechanical, and
plumbing subcontractors shall be made available by the school
district to all bidders at least five business days prior to the dates
fixed for the public opening of sealed bids.

(k) For purposes of this section, electrical, mechanical, and
plumbing subcontractors are contractors licensed pursuant to
Section 7058 of the Business and Professions Code, specifically
contractors holding C-4, C-7, C-10, C-16, C-20, C-34, C-36, C-38,
C-42, C-43, and C-46 licenses, pursuant to regulations of the
Contractors’ State License Board.

(l) This section shall not apply to a school district with an
average daily attendance of less than 2,500.

(m)  begin insert (1) end insert begin insert   end insert This section shall apply only to contracts awarded on
or after January 1, 2014.

begin insert

(2) The amendments made to this section by the act adding this
paragraph shall apply only to contracts awarded on or after
January 1, 2015.

end insert

(n) (1) On or before January 1, 2018, the Director of Industrial
Relations shall (A) submit a report to the Legislature evaluating
whether, during the years this section has applied to contracts,
violations of the Labor Code on school district projects have
decreased as compared to the same number of years immediately
preceding the enactment of this section, and (B) recommend
improvements to the system for prequalifying contractors and
subcontractors on school district projects.

(2) A report to be submitted pursuant to this subdivision shall
be submitted in compliance with Section 9795 of the Government
Code.

(o) This section shall become inoperative on January 1, 2019,
and, as of July 1, 2019, is repealed.

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begin insert SEC. 4. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for certain
costs that may be incurred by a local agency or school district
because, in that regard, this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.

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However, if the Commission on State Mandates determines that
this act contains other costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert

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SECTION 1.  

Section 17070.51 of the Education Code is
amended to read:

17070.51.  

(a) If a certified eligibility or funding application
related information is found to have been falsely certified by a
school district, architect, or design professional, hereinafter referred
to as a material inaccuracy, the Office of Public School
Construction shall notify the board.

(b) The board shall impose the following penalties if an
apportionment and fund release has been made based upon
information in the project application or related materials that
constitutes a material inaccuracy.

(1) Pursuant to a repayment schedule approved by the board of
no more than five years, the school district shall repay to the board,
for deposit into the 1998 State School Facilities Fund, the 2002
State School Facilities Fund, or the 2004 State School Facilities
Fund, as the case may be, an amount proportionate to the additional
funding received as a result of the material inaccuracy including
interest at the rate paid on moneys in the Pooled Money Investment
Account or at the highest rate of interest for the most recent issue
of state general obligation bonds as established pursuant to the
Chapter 4 (commencing with Section 16720) of Part 3 of Division
4 of Title 2 of the Government Code, whichever is greater.

(2) The board shall prohibit the school district from
self-certifying certain project information for subsequent
applications for project funding for a period of up to five years
following the date of the finding of a material inaccuracy or until
the school district’s repayment of the entire amount owed under
paragraph (1). Although a school district that is subject to this
paragraph may not self-certify, the school district shall not be
prohibited from applying for state funding under this chapter. The
board shall establish an alternative method for state or independent
certification of compliance that shall be applicable in these cases.
The process shall include, but shall not be limited to, procedures
for payment by the school district of increased costs associated
with the alternative certification process.

(c) For a school district found to have provided a material
inaccuracy when a funding apportionment has occurred, but no
fund release has been made, the board shall direct its staff to reduce
the apportionment as necessary to reflect the actual nature of the
project and to disregard the inaccurate information or material,
and paragraph (2) of subdivision (b) shall apply.

(d) For a school district found to have provided a material
inaccuracy when no funding apportionment or fund release has
been made, the inaccurate information or materials shall not be
considered, and paragraph (2) of subdivision (b) shall apply. The
project may continue if the application, minus the inaccurate
materials, is still complete.

end delete