Amended in Assembly June 12, 2014

Senate Bill No. 854

Introduced by Committee on Budget and Fiscal Review

January 9, 2014

begin delete An act relating to the Budget Act of 2014. end delete begin insert An act to amend Sections 17224, 17250.30, and 81704 of the Education Code, to amend Sections 6204, 6531, 11270, 11544, 12153, 12168.7, 12224, 12225, 12227, 12228, 12229, 12230, 12231, 12232, 12233, 12236, 12432, 12478, 13300.5, 13332.11, 13332.19, 13963.1, 14740, 14745, 14746, 16429.1, 16731.6, 17090, 17091, 17093, 17094, 17095, 17096, 17097, 17617, 22802, 22910, 22910.5, and 22913 of, to add Section 20035.11 to, to add Article 7 (commencing with Section 12270) to Chapter 3 of Part 2 of Division 3 of Title 2 of, to add Chapter 10 (commencing with Section 11850) to Part 1 of Division 3 of Title 2 of, to repeal Sections 11548.5, 12234, 12235, and 26915 of, to repeal Article 3 (commencing with Section 14750), Article 4 (commencing with Section 14755), Article 6 (commencing with Section 14765), and Article 7 (commencing with Section 14769) of Chapter 5 of Part 5.5 of, and to repeal Chapter 7 (commencing with Section 15849.20) of Part 10b of, Division 3 of Title 2 of, the Government Code, to amend Sections 50661, 51452, and 53545 of, and to repeal Sections 50840, 50841, and 50842 of, the Health and Safety Code, to amend Sections 135, 1771.5, 1771.7, and 1776 of, to add Sections 1725.5, 1771.1, and 1771.4 to, and to repeal and add Sections 1771.3 and 1773.3 of, the Labor Code, to amend Section 179 of the Military and Veterans Code, to amend Sections 1485.5 and 13835.7 of the Penal Code, to amend Sections 20133, 20175.2, 20193, 20209.7, 20688.6, and 20919.3 of, and to repeal and add Sections 6823 and 6953 of, the Public Contract Code, and to repeal and add Sections 100152 and 103396 of the Public Utilities Code, to amend Section 75.70 of, and to add Section 95.5 to, the Revenue and Taxation Code, to amend Sections 1112, 1112.5, 1114, 1126, 1127, 1135, and 1585.5 of the Unemployment Insurance Code, and to amend Section 2 of Chapter 469 of the Statutes of 2002, relating to state and local government, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 854, as amended, Committee on Budget and Fiscal Review. begin delete Budget Act of 2014. end delete begin insert State and local government. end insert

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(1) Existing law requires a school district to be subject to nonuse payments, except as specified, if the school district acquires or has acquired a site for school purposes, as determined by the State Allocation Board, and the school district does not use the site within 5 years of the date of acquisition for kindergarten or any of grades 1 to 8, inclusive, or within 7 years of the date of acquisition for grades 7 to 12, inclusive; or a site at any grade level that has previously been used but has not been used for school purposes within the preceding 5 years. Existing law requires the Executive Officer of the State Allocation Board to compute and certify to the Controller the amount of the nonuse payments. Existing law requires the Controller to deduct the total amount of the payment, as specified, from apportionments made to the school district from the State School Fund and transfer the amount so deducted to the State School Site Utilization Fund. Existing law requires any funds in the State School Site Utilization Fund, including interest, that are not subject to return to a school district, as specified, to revert to the State School Deferred Maintenance Fund.

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This bill would instead require any funds in the State School Site Utilization Fund, including interest, that are not subject to return to a school district, as specified, to be allocated, upon appropriation by the Legislature, for purposes of administering the Leroy F. Greene School Facilities Act of 1998. The bill would require any unencumbered funds in the State School Deferred Maintenance Fund on July 1, 2014, to be transferred to the State School Site Utilization Fund.

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(2) Existing law, with exceptions, requires all workers employed on a public works project, as specified, to be paid the general prevailing wage rate, as determined by the Director of Department of the Industrial Relations. The department is required to monitor and enforce compliance with all applicable prevailing wage requirements for any public works project paid for in whole or in part out of public funds, as specified. The reasonable and directly related costs of monitoring and enforcing compliance with the applicable prevailing wage requirements on a public works project incurred by the department are payable by the awarding body of the public works project, except as specified, as a cost of construction. The moneys are deposited into the State Public Works Enforcement Fund, a continuously appropriated fund, to be used in the department’s monitoring and enforcement duties.

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This bill would revise and recast these provisions to, among other things, delete the requirement that the awarding body pay the department’s costs for monitoring and enforcing compliance with prevailing wage requirements as a cost of construction, and would instead require a contractor to be registered and qualified by the department in order to bid on, be listed in a bid proposal for, or engage in the performance of any contract for a public work. Beginning July 1, 2014, a contractor or subcontractor would be required to register with the department, pay an initial nonrefundable registration fee of $300, pay an annual renewal fee each July 1 thereafter, and as part of the registration process, provide specified information to establish the contractor’s eligibility to be registered. The bill would except from the application of these provisions contracts determined to be for public work only after the contract has been awarded or the bid has been awarded, except as specified. The bill would require the department to maintain a list of registered contractors on its Internet Web site.

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The fees would be deposited into the State Public Works Enforcement Fund, which would no longer be continuously appropriated, and would be used only for the reasonable costs of administering the registration and qualification of contractors, the costs and obligations associated with administration and enforcement requirements with regard to the prevailing wage provisions, and public works projects monitoring and enforcement duties of the Labor Commissioner. The bill would provide for an adjustment of renewal fees based on the balance of the fund, as specified. These provisions would apply to any bid proposal submitted on or after March 1, 2015, and any contract for public work entered into on or after April 1, 2015. The bill also would provide for notice, record keeping, and reporting requirements, as specified.

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This bill would authorize the Director of Finance, with the concurrence of the Secretary of the Labor Workforce and Development Agency, to approve a short-term loan each fiscal year from the Labor and Workforce Development Fund to the State Public Works Enforcement Fund, as provided.

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This bill would also make conforming changes and delete obsolete provisions with regard to specified awarding body compliance programs and specified awarding body collective bargaining agreements.

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(3) The Public Employees’ Retirement Law (PERL) prescribes a comprehensive set of rights and duties for members of the Public Employees’ Retirement System (PERS) and provides those members a defined benefit based upon age, service credit, and final compensation. PERL provides various definitions of final compensation based upon when PERS members are first employed and member classifications. Existing law, the California Public Employees’ Pension Reform Act of 2013 (PEPRA), establishes various limits on retirement benefits generally applicable to a public employee retirement system in the state, with specified exceptions. PEPRA defines final compensation for members of public employee retirement systems hired after January 1, 2013, as specified.

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This bill would provide for the phased application of specified salary increases to supervisors and managers of State Bargaining Unit 9 and State Bargaining Unit 10, effective July 1, 2014, for the purposes of defining final compensation and calculating pensionable compensation or compensation earnable in relation to pensions and benefits. The bill would require these supervisors and managers to pay employee retirement contributions on the full amount of the salary increase provided pursuant to the pay letter and would prohibit a refund of the contributions unless a supervisor or manager elects a full refund of retirement contributions and ceases to be a member of the retirement system. The bill would require that any increased costs of administration of these provisions would be paid by the employers. The bill would prescribe duties for the Department of Human Resources and the Controller in connection with implementing and administration of these provisions.

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(4) Existing law requires the Secretary of State to appoint a Keeper of the Archives who is responsible for the preservation and indexing of material deposited in the State Archives.

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This bill would change the title of that position to Chief of Archives.

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Existing law requires the Department of General Services to manage state records.

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This bill would instead require the Secretary of State to manage state records and the Department of General Services to store state records, as specified.

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Existing law authorizes the Workers’ Compensation Appeals Board, with the approval of the Department of Finance, to dispose of specified files the board maintains.

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This bill would instead require the board to obtain the approval of the Secretary of State.

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This bill would also make technical, nonsubstantive, and conforming changes to these provisions.

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(5) Existing law creates the Department of Technology Services Revolving Fund within the State Treasury to receive all revenues from the sale of technology or specified technology services, for other services rendered by the Department of Technology, and all other moneys properly credited to the Department of Technology and to be used, upon appropriation by the Legislature, for specified purposes with respect to the administration of the Department of Technology. Existing law authorizes the Department of Technology to collect payments and require monthly payments from public agencies that have requested services for the services provided.

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This bill would instead authorize the Department of Technology to collect payments and require monthly payments from public agencies for services provided.

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(6) Existing law, until January 1, 2015, creates within the Government Operations Agency the Department of Technology which is supervised by the Director of Technology. Existing law authorizes the Director of Technology and the Department of Technology to exercise various powers in creating and managing the information technology policy of the state among other things.

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This bill would extend the operation of these provisions indefinitely.

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(7) Existing law requires the Department of Finance to certify annually to the Controller the amount determined to be the fair share of administrative costs due and payable from each state agency and to certify to the Controller any amount redetermined to be the fair share of administrative costs due and payable from a state agency. Existing law requires the Controller to notify a state agency of that amount, and, unless the state agency requests that those payments be deferred, to transfer that amount from specified funds to the Central Service Cost Recovery Fund or the General Fund, as specified. Existing law defines “administrative costs” as the amounts expended by various specified state entities for supervision or administration of the state government or for services to the various state agencies.

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Within that definition, this bill would make technical changes by updating the names of various states entities and would also make a conforming change.

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(8) Existing law requires the Department of Finance, the Controller, the Treasurer, and the Department of General Services to collaboratively develop, implement, utilize, and maintain the Financial Information System for California, also known as FISCal, to optimize the financial business management of the state. Existing law establishes the FISCal Internal Services Fund, the FISCal Support Fund, the FISCal Debt Service Fund, and the FISCal System Development Fund in the State Treasury, and provides that funds in the FISCal Internal Services Fund and a specified subaccount are continuously appropriated. Existing law authorizes the State Public Works Board to issue bonds, notes, or certificates to finance and to refinance the costs of the FISCal system and authorizes loans from the General Fund to pay for the costs of the FISCal system. Existing law authorized the FISCal Project Office in the Department of Finance to establish rates and a payment schedule for state departments and agencies to use the FISCal system.

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This bill would repeal these provisions and establish instead revised and modified provisions continuing the existence of the FISCal system pursuant to the Financial Information System for California (FISCal) Act. The act would, among other things, require the Department of Finance, the Controller, the Treasurer, and the Department of General Services to collaboratively develop, implement, utilize, and maintain the FISCal system to be used upon full implementation, by all state departments and agencies, as defined. The act would require, throughout the development of the FISCal system, the California State Auditor’s Office to independently monitor the FISCal system as the California State Auditor deems appropriate in accordance with certain factors.

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The act would continue the existence of the FISCal Internal Services Fund and create the FISCal Consolidated Payment Fund for consolidated payments to payees of moneys otherwise appropriated to those payees from the State Treasury. The act would require the FISCal project office, subject to the approval of the Department of Finance, to establish and assess fees and a payment schedule for state departments and agencies to use or interface with the FISCal system. The act would further require the office and the FISCal Service Center to obtain fingerprint images and associated information from any employee, prospective employee, contractor, subcontractor, volunteer, vendor, and partner agency employee assigned to the office whose duties include, or would include, having access to confidential or sensitive information or data on the network or computing infrastructure. The act would authorize individuals, based on the results of their background check performed through the fingerprint identification, to be rejected from employment, as specified.

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The act would establish the FISCal Service Center to incrementally assume responsibility of the FISCal system functionality, as portions of the FISCal system are implemented and accepted, and to, upon full implementation and final acceptance of the FISCal system, perform all maintenance and operation of the FISCal system.

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Existing law authorizes the Controller, if a warrant is lost or destroyed before it is paid by the Treasurer, to issue of a duplicate warrant under specified conditions and subject to certain limitations.

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This bill would replace the term “duplicate” with “replacement” and make other nonsubstantive conforming changes.

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(9) Existing law authorizes, until June 30, 2014, the Controller to procure, modify, and implement a new human resource management system that meets the needs of a modern state government, known as the 21st Century Project.

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This bill would extend that authorization for one more year, until June 30, 2015.

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(10) Existing law, except as specified, prohibits any state agency from expending funds appropriated for capital outlay projects or for design-build projects until the Department of Finance and the State Public Works Board have approved preliminary plans for a capital outlay project, or concept drawings and performance criteria for a design-build project. Existing law authorizes the board to augment a major capital outlay project or a design-build project in an amount of up to 20% of the total appropriation for that project, including a reasonable construction reserve within the project construction fund. Existing law authorizes the board to use the reserve amount to augment a capital outlay project or design-build project, when and if necessary, after the lease revenue bonds are sold to ensure completion of the project. Existing law requires, upon completion of a capital outlay project or design-build project, that any amount remaining in the construction reserve fund be used to offset rental payments.

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This bill would delete that offset requirement for both capital outlay projects and design-build projects.

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(11) Existing law establishes the Local Agency Investment Fund, a trust fund in the custody of the Treasurer, in which local governments and other specified governmental entities, with the required consent, may deposit for investment moneys in their treasuries that are not required for immediate needs. Existing law requires, immediately at the conclusion of each calendar quarter, that all interest earned and other increment derived from investments be distributed by the Controller to the contributing governmental units or entities, as specified, in amounts directly proportionate to the respective amounts deposited in the fund and the length of time the amounts remained therein. Existing law requires, however, that an amount equal to the reasonable costs incurred in administering the fund, not to exceed a maximum of 5% of the earnings of the fund or the amount appropriated in the annual Budget Act for this function, be deducted from the earnings prior to distribution and be credited as reimbursements to the state agencies incurring costs in administering the fund.

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This bill would, if the 13-week Daily Treasury Bill Rate, as published as of the last day of the state’s fiscal year, is below 1%, increase the amount of reasonable costs to be so deducted from the earnings to a maximum of 8% of the earnings of this fund for the subsequent fiscal year, as specified.

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(12) The State General Obligation Bond Law generally provides for a procedure that may be adopted by other acts, with any necessary modifications, in authorizing the issuance and sale of state general obligation bonds and providing for the repayment of those bonds. Existing law authorizes the financing committee created by the bond act to issue bonds in the form of commercial paper notes. Under existing law, an amount to pay interest payable on maturing commercial paper notes and other costs associated with the commercial paper is continuously appropriated from the General Fund.

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This bill would specify that the above-described costs associated with the commercial paper include any fees, costs, indemnities, and other similar expenses incurred under or in connection with agreements to purchase commercial paper notes. The bill would limit the specified costs to an annual amount that does not exceed, depending upon the type of cost, 3% of the maximum principle amount of commercial paper notes that could be purchased and outstanding at any one time pursuant to an agreement or 0.25% of the highest sum of the maximum principle amount of commercial paper notes authorized by certain resolutions.

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(13) Existing law, the Public Employees’ Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees’ Retirement System (board), authorizes the board to contract for health benefit plans for employees and annuitants, as defined, which may include employees and annuitants of contracting agencies. Contributions and premiums paid under PEMHCA are deposited in the Public Employees’ Health Care Fund and the Public Employees’ Contingency Reserve Fund, both of which are continuously appropriated. Existing law requires the state, contracting agencies, employees, and annuitants to contribute to the cost of providing the benefit coverage under the applicable approved health benefit plans. Existing law requires the Controller to identify and remit the state’s contributions for employees and annuitant monthly to the Public Employees’ Health Care Fund or to the carriers, as defined, together with amounts authorized by the employees and annuitants to be deducted from their salaries or retirement allowances for payment of their contributions. Existing law requires the contributions of employees and annuitants of contracting agencies and the contributions of contracting agency employers to be identified and remitted monthly to the carriers by warrant upon claims filed by the board.

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This bill would create a continuously appropriated account in the Public Employees’ Contingency Reserve Fund for the deposit of contributions by the state, employees, and annuitants for the payment of premiums or other charges to carriers or the Public Employees’ Health Care Fund. By providing for deposit of new moneys into continuously appropriated funds, this bill would make an appropriation. The bill would require the Controller to remit contributions of the state, contracting agencies, employees, and annuitants currently required to be directed to the Public Employees’ Health Care Fund or to the carriers to instead remit those moneys to the Public Employees’ Contingency Reserve Fund. The bill would make technical and conforming changes.

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(14) Existing law authorizes the Orange County Board of Supervisors to elect, for a period of up to 2 years, that any requirement that an audit be performed by the county auditor may also be performed by a county employee or officer who meets specified qualifications.

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This bill would repeal this authorization.

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(15) Existing law creates the Housing Rehabilitation Loan Fund and continuously appropriates moneys in the fund for, among other purposes, making specified deferred payment housing rehabilitation loans.

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Existing law creates the California Housing Trust Fund and continuously appropriates moneys deposited in the fund for the purposes of investment of those moneys. Existing law authorizes, upon appropriation by the Legislature, all interest or other increment resulting from the investment of moneys in the fund to be used for housing programs that serve lower and very low income households, as specified.

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This bill would, effective July 1, 2014, abolish the California Housing Trust Fund and require any remaining balance, assets, liabilities, and encumberances to be transferred to and become part of the Housing Rehabilitation Loan Fund. The bill would continuously appropriate all transferred amounts to the Department of Housing and Community Development for the purpose of satisfying any liabilities and encumbrances and for the purposes of the Housing Rehabilitation Loan Fund. The bill would repeal the continuous appropriation of the moneys in the California Housing Trust Fund for investment purposes and would repeal authorization for the moneys in the fund to be used for housing programs.

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Existing law establishes the Homebuyer Down Payment Assistance Program and the Rental Assistance Program, which are administered by the California Housing Finance Agency pursuant to a contract with the Department of General Services, to provide assistance in the amount of the applicable school facility fee for affordable housing developments. Existing law establishes the School Facilities Fee Assistance Fund, which is continuously appropriated to the Department of General Services for the purposes of those programs.

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This bill would, effective July 1, 2014, abolish the School Facilities Fee Assistance Fund and transfer any remaining balance, assets, liabilities, and encumberances in the fund as of that date to the Housing Rehabilitation Loan Fund. The bill would provide that transferred amounts are continuously appropriated to the Department of Housing and Community Development for the purpose of satisfying any liabilities, encumbrances, and purposes related to the abolished fund.

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(16)  The Housing and Emergency Shelter Trust Fund Act of 2006, adopted and approved by the voters at the November 7, 2006, statewide general election, authorized the issuance of bonds in the amount of $2,850,000,000 pursuant to the State General Obligation Bond Law. Under the act, $135,000,000 is transferred to the Joe Serna, Jr. Farmworker Housing Grant Fund to be expended for the programs authorized by the Joe Serna, Jr. Farmworker Housing Grant Program which includes grants, loans, or both, to local public entities, nonprofit corporations, limited liability companies, and limited partnerships, for the construction or rehabilitation of housing for agricultural employees and their families, subject to specified requirements.

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This bill would add the Department of Housing and Community Development as an eligible recipient for this grant program to reconstruct and rehabilitate migrant centers that are in need of significant repairs or rehabilitation to ensure the health and safety of residents. This bill would exempt the Department of Housing and Community Development from the recipient requirements specified by the Joe Serna, Jr. Farmworker Housing Grant Program. This bill, to the extent no other funding sources are available, would permit the Department of Housing and Community Development to directly expend up to $11,000,000 of the transferred moneys to reconstruct and rehabilitate migrant centers.

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(17) Existing law requires the Adjutant General to establish a California State Military Museum and Resource Center and to enter into an operating agreement with the California State Military Museum Foundation to conduct the day-to-day operations of the museum, as specified. Existing law appropriates $100,000 for each fiscal year from the General Fund to the California State Military Museum for the establishment and operation of the museum and resource center.

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This bill would instead appropriate that amount to the Military Department for the establishment and operation of the California State Military Museum and Resource Center. This bill would remove the requirement that the Adjutant General enter into an operating agreement with the California State Military Museum Foundation and would instead authorize the Adjutant General to enter into operating agreements with nonprofit historical foundations, military museums, historical societies or other entities to conduct museum activities pursuant to the rules and regulations promulgated hereunder.

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Existing law requires the museum to consist of specified facilities.

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This bill would instead authorize the museum to consist of those facilities.

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Existing law requires the Board of Directors of the California State Military Museum Foundation to include the Adjutant General, or the Assistant Adjutant General, or any Deputy Adjutant General designated by the Adjutant General, as an ex officio voting member of the board.

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This bill would remove the membership requirements of the board of directors.

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Existing law requires the California State Military Museum Foundation to perform specified duties and grants the foundation the authorization to make specified determinations or engage in specified activities related to the museum.

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This bill would instead require the Military Department to perform those duties and authorize the Military Department or an entity that enters into an operating agreement with the department to make those determinations or engage in those specified activities related to the museum.

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(18) Existing law authorizes every person who is unlawfully imprisoned or restrained of his or her liberty to prosecute a writ of habeas corpus to inquire into the cause of that imprisonment or restraint, and provides for the release of that person if no legal cause is shown for his or her imprisonment or restraint. Existing law provides that if the district attorney or Attorney General stipulates to or does not contest the factual allegations underlying one or more of the grounds for granting a writ of habeas corpus or a motion to vacate a judgment, the facts underlying the basis for the court’s ruling or order shall be binding on the Attorney General, the factfinder, and the California Victim Compensation and Government Claims Board. Existing law also provides that the express factual findings made by the court in considering a petition for habeas corpus, a motion to vacate judgment on the basis of newly discovered evidence relating to misconduct by a government official, as specified, or an application for a certificate of factual innocence, is binding on the Attorney General, the factfinder, and the California Victim Compensation and Government Claims Board.

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This bill would provide that a court, for purposes of those provisions governing binding factual allegations and express factual findings, is defined as a state or federal court.

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(19) Existing law establishes in the State Treasury the Victim-Witness Assistance Fund, to be administered by the Office of Emergency Services. Existing law requires the moneys in the fund to be made available through the Office of Emergency Services to any public or private nonprofit agency for the assistance of victims and witnesses and for the support of specified victim counseling centers.

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This bill would additionally authorize the moneys in the fund to be used for any other purpose that supports victims.

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(20) The California Victim Compensation and Government Claims Board administers a program to assist state residents to obtain compensation for their pecuniary losses suffered as a direct result of criminal acts. Payment is made under these provisions from the Restitution Fund, which is continuously appropriated to the board for these purposes. Existing law authorizes the board, as specified, to administer a program to award, upon appropriation by the Legislature, up to $2,000,000 in grants to trauma recovery centers for up to a maximum period of 3 years, funded from the Restitution Fund.

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This bill would instead state the intent of the Legislature to annually appropriate $2 million per year from the Restitution Fund.

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(21) Existing property tax law requires the county auditor to allocate and pay certain property tax revenues to designated local jurisdictions within the county in accordance with specified formulas, including allocating and paying remaining revenues to all elementary, high school, and unified school districts within the county in proportion to each school district’s average daily attendance, as certified by the Superintendent of Public Instruction for the purposes of the advance apportionment of state aid in the then current fiscal year. That law requires the average daily attendance of certain school districts to be deemed to be zero.

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This bill would require the county auditor, if the average daily attendance of all elementary, high school, and unified school districts within the county is deemed to be zero, to reallocate the school district revenues to other designated local jurisdictions in proportion to each entity’s percentage of revenues in comparison to the aggregate total of revenues.

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By imposing new duties in the annual allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.

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(22) Existing law established, until the end of the 2006-07 fiscal year, the State-County Property Tax Administration Grant Program under which a county that enacted a specified resolution and met certain conditions was authorized to receive from the state a grant, if funds were appropriated for this purpose, of a specified amount of money for property tax administration, as specified.

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This bill would, for the 2014-15 fiscal year to the 2016-17 fiscal year, establish the State-County Assessors’ Partnership Agreement Program, to be administered by the Department of Finance, under which counties selected by the Department of Finance, as specified, would receive funding for certain property tax administration purposes. Funding for the program would be subject to appropriation in the annual budget, and would require the program to be inoperative in any fiscal year in which an appropriation is not provided. This bill would require county assessors’ offices that elect to participate in the program to transmit a resolution and an application, as specified, to the Department of Finance, and would require each participating county to annually match the program funds apportioned to its county assessor’s office. This bill would also require each participating county assessor’s office to report specified information to the Department of Finance while the program is operative. This bill would require the Department of Finance to submit a report that includes specified information for each fiscal year that the program was in operation to the Joint Legislative Budget Committee.

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(23) Existing law requires every employer, with specified exceptions, to pay contributions to the Unemployment Fund at specified rates to fund the payment of unemployment compensation benefits to eligible unemployed individuals and requires those employers to submit specified reports regarding those contributions. Existing law imposes a penalty upon employers who, without good cause, fail to pay contributions, fail to remit payments by electronic funds transfer, fail to file specified returns and reports, where the Director of Employment Development is not satisfied with the return or report, and where an assessment becomes delinquent. The funds are deposited into the Employment Development Department Contingent Fund, a continuously appropriated fund.

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This bill would, on and after July 1, 2014, increase the penalty amounts from 10% to 15%, where applicable, and from $10 to $20, where applicable. By increasing the amount of funds deposited into a continuously appropriated fund, this bill would make an appropriation.

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(24) The Personal Income Tax Law imposes a tax on the income of California residents and on the income that nonresidents derive within California. Existing law requires the Employment Development Department to administer the reporting, collection, and enforcement of personal income tax wage withholding and deposits any penalties and interest related to the withholding of personal income tax into the Employment Development Department Contingent Fund. Existing law requires the Director of the Employment Development Department to estimate the amount of penalties and interest collected related to the withholding of personal income tax and transfer that amount into the Personal Income Tax Fund on a quarterly basis.

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This bill would suspend that transfer for the 2014-15 fiscal year.

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(25) Existing law specifies that the total amount due to each city, county, city and county, and special district in reimbursement of state-mandated local costs, as specified in a provision of the California Constitution, be appropriated for payment to these entities over a period of not more than 15 years, commencing with the Budget Act for the 2006-07 fiscal year and concluding with the Budget Act for the 2020-21 fiscal year. Existing law provides that there shall be no appropriation for payment of reimbursement claims pursuant to these provisions for the 2012-13, 2013-14, and 2014-15 fiscal years.

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This bill would delete the 2014-15 fiscal year from that latter provision.

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(26) The Economic Revitalization Act establishes the Governor’s Office of Business and Economic Development, also known as “GO-Biz,” to, among other duties, serve the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth.

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This bill would appropriate $2,000,000 from the General Fund to GO-Biz, on a one-time basis, to be used to draw down federal funding in support of the Small Business Development Center Network Program. This bill would also make these funds available for encumbrance and expenditure until June 30, 2017.

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(27) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

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(28) 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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2014.

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Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . 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   

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begin insert Section 17224 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

17224.  

begin insert (a) end insert begin insert   end insert Any funds in the State School Site Utilization Fund,
including interest, that are not subject to return to a school district
pursuant to Section 17223 begin delete shall revert to the Deferred Maintenance
Fund. end delete begin insert shall, upon appropriation by the Legislature, be allocated
for purposes of administering the Leroy F. Greene School Facilities
Act of 1998 (Chapter 12.5 (commencing with Section 17070.10)
of Part 10). end insert

begin insert

(b) Any unencumbered funds in the State School Deferred
Maintenance Fund on July 1, 2014, shall be transferred to the
State School Site Utilization Fund.

end insert

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begin insert SEC. 2. end insert   

end insert

begin insert Section 17250.30 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

17250.30.  

(a) Any design-build entity that is selected to design
and build a project pursuant to this chapter shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omissions insurance coverage sufficient
to cover all design and architectural services provided in the
contract. This chapter does not prohibit a general or engineering
contractor from being designated the lead entity on a design-build
entity for the purposes of purchasing necessary bonding to cover
the activities of the design-build entity.

(b) Any payment or performance bond written for the purposes
of this chapter shall use a bond form developed by the Department
of General Services pursuant to subdivision (g) of Section 14661
of the Government Code. The purpose of this subdivision is to
promote uniformity of bond forms to be used on school district
design-build projects throughout the state.

(c) (1) All subcontracts that were not listed by the design-build
entity in accordance with Section 17250.25 shall be awarded by
the design-build entity.

(2) The design-build entity shall do all of the following:

(A) Provide public notice of the availability of work to be
subcontracted.

(B) Provide a fixed date and time on which the subcontracted
work will be awarded.

(3) Subcontractors bidding on contracts pursuant to this
subdivision shall be afforded the protections contained in Chapter
4 (commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code.

(4) (A) If the school district elects to award a project pursuant
to this section, retention proceeds withheld by the school district
from the design-build entity shall not exceed 5 percent if a
performance and payment bond, issued by an admitted surety
insurer, is required in the solicitation of bids.

(B) In a contract between the design-build entity and a
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the school district and the design-build entity. If the
design-build entity provides written notice to any subcontractor
who is not a member of the design-build entity, prior to or at the
time the bid is requested, that a bond may be required and the
subcontractor subsequently is unable or refuses to furnish a bond
to the design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the school district and the design-build entity
from any payment made by the design-build entity to the
subcontractor.

(5) In accordance with the provisions of applicable state law,
the design-build entity may be permitted to substitute securities
in lieu of the withholding from progress payments. Substitutions
shall be made in accordance with Section 22300 of the Public
Contract Code.

(d) (1) For contracts for public works projects awarded prior
to begin delete the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert the school district shall
establish and enforce a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code or shall
contract with a third party to operate a labor compliance program
containing the requirements outlined in Section 1771.5 of the Labor
Code. This requirement shall not apply to projects where the school
district or the design-build entity has entered into a collective
bargaining agreement that binds all of the contractors performing
work on the project.

(2) For contracts for public works projects awarded on or after begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the school district shall reimburse the
department for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects pursuant to rates established by the department as
set forth in subdivision (h) of Section 1771.5 of the Labor Code.
All moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects. end delete begin insert January 1,
2012, the project shall be subject to the requirements of Section
1771.4 of the Labor Code. end insert

begin delete

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing,
monitoring, and enforcement on public works projects, the school
district may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 81704 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

81704.  

(a) Any design-build entity that is selected to design
and build a project pursuant to this chapter shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This chapter does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.

(b) Any payment or performance bond written for the purposes
of this chapter shall use a bond form developed by the Department
of General Services pursuant to subdivision begin delete (i) end delete begin insert (g) end insert of Section 14661
of the Government Code. The purpose of this subdivision is to
promote uniformity of bond forms to be used on community college
district design-build projects throughout the state.

(c) (1) All subcontracts that were not listed by the design-build
entity in accordance with Section 81703 shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the community college district in the design-build
package.

(2) The design-build entity shall do all of the following:

(A) Provide public notice of the availability of work to be
subcontracted.

(B) Provide a fixed date and time on which the subcontracted
work will be awarded.

(3) Subcontractors bidding on contracts pursuant to this
subdivision shall be afforded the protections contained in Chapter
4 (commencing with Section 4100) of Part 1 of Division 2 of the
Public Contract Code.

(4) (A) If the community college district elects to award a
project pursuant to this section, retention proceeds withheld by the
community college district from the design-build entity shall not
exceed 5 percent if a performance and payment bond, issued by
an admitted surety insurer, is required in the solicitation of bids.

(B) In a contract between the design-build entity and a
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the community college district and the design-build entity.
If the design-build entity provides written notice to any
subcontractor who is not a member of the design-build entity, prior
to or at the time the bid is requested, that a bond may be required
and the subcontractor subsequently is unable or refuses to furnish
a bond to the design-build entity, then the design-build entity may
withhold retention proceeds in excess of the percentage specified
in the contract between the community college district and the
design-build entity from any payment made by the design-build
entity to the subcontractor.

(5) In accordance with the provisions of applicable state law,
the design-build entity may be permitted to substitute securities
in lieu of the withholding from progress payments. Substitutions
shall be made in accordance with Section 22300 of the Public
Contract Code.

(d) (1) For contracts for public works projects awarded prior
to begin delete the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert the community college district
shall establish and enforce a labor compliance program containing
the requirements outlined in Section 1771.5 of the Labor Code or
shall contract with a third party to operate a labor compliance
program containing the requirements outlined in Section 1771.5
of the Labor Code. This requirement shall not apply to projects
where the community college district or the design-build entity
has entered into a collective bargaining agreement that binds all
of the contractors performing work on the project.

(2) For contracts for public works projects awarded on or after begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the community college district shall reimburse
the department for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects, pursuant to rates established by the department as
set forth in subdivision (h) of Section 1771.5 of the Labor Code.
All moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects. end delete begin insert January 1,
2012, the project shall be subject to the requirements of Section
1771.4 of the Labor Code. end insert

begin delete

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the
community college district may elect to continue operating an
existing previously approved labor compliance program to monitor
and enforce prevailing wage requirements on the project if it has
either not contracted with a third party to conduct its labor
compliance program and requests and receives approval from the
department to continue its existing program or it enters into a
collective bargaining agreement that binds all of the contractors
performing work on the project and that includes a mechanism for
resolving disputes about the payment of wages.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 6204 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

6204.  

(a) For purposes of this chapter, the following definitions
shall apply:

(1) “Archivist” means the begin delete Keeper of the end delete begin insert Chief of end insert Archives, as
specified in Section 12227.

(2) “Record” has the same meaning as “public records” is
defined in subdivision (e) of Section 6252, and includes, but is not
limited to, any writing containing information relating to the
conduct of the public’s business prepared, owned, used, or retained
by a state or local agency regardless of physical form or
characteristics.

(3) “Secretary” means the Secretary of State.

(b) Whenever the secretary, in consultation with the archivist,
has reasonable grounds to believe that a record belonging to the
state or a local agency is in the possession of a person, organization,
or institution not authorized by law to possess begin delete those records, end delete begin insert that
record, end insert the secretary may issue a written notice demanding that
person, organization, or institution to do either of the following
within 20 calendar days of receiving the notice:

(1) Return the record to the appropriate state or local agency.

(2) Respond in writing and declare why the record does not
belong to the state or a local agency.

(c) The notice and demand issued pursuant to subdivision (b)
shall identify the record claimed to belong to the state or local
agency with reasonable specificity, and shall state that the secretary
is authorized to take legal action to recover the record if the person,
organization, or institution fails to respond in writing within the
required time or does not adequately demonstrate that the record
does not belong to the state or a local agency.

(d) The secretary shall send the notice and demand specified in
subdivision (b) by certified or registered mail, return receipt
requested.

(e) When a record is returned pursuant to paragraph (1) of
subdivision (b), upon the request of the person, organization, or
institution that returned the record, the secretary or a local agency
that receives the record shall issue to that person, organization, or
institution a copy or digital image of the record, which shall be
certified as a true copy of the record that was returned to the state
or local agency, and dated on the same day the record was returned.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 6531 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

6531.  

(a) The Legislature finds and declares all of the
following:

(1) It is in the best interests of communities located within the
City of San Diego for the local public agencies that have
jurisdiction within the city to form a joint powers agency to provide
for the orderly and coordinated acquisition, construction, and
development of model school projects. These projects may include
the acquisition of land by negotiation or eminent domain, the
construction of schools, the construction of recreational facilities
or park sites or both, and the construction of replacement and other
housing, including market rate, moderate-income, and low-income
housing.

(2) The coordinated construction of these projects by
redevelopment agencies, school districts, housing authorities,
housing commissions, and the city is of great public benefit and
will save public money and time in supplying much needed
replacement housing lost when schools are constructed within
existing communities.

(3) Legislation is needed to allow redevelopment agencies,
school districts, housing authorities, housing commissions, and
the city to use their powers to the greatest extent possible to
expedite, coordinate, and streamline the construction and eventual
operation of such projects.

(b) (1) Notwithstanding any other provision of law, the
Redevelopment Agency of the City of San Diego, the Housing
Authority of the City of San Diego, the San Diego Housing
Commission, the San Diego Unified School District, and the City
of San Diego may enter into a joint powers agreement to create
and operate a joint powers agency for the development and
construction of a model school project located within the City
Heights Project Area. The agency created pursuant to this section
shall be known as the San Diego Model School Development
Agency. The San Diego Model School Development Agency shall
have all the powers of a redevelopment agency pursuant to Part 1
(commencing with Section 33000) of Division 24 of the Health
and Safety Code, all of the powers of a housing authority pursuant
to Part 2 (commencing with Section 34200) of Division 24 of the
Health and Safety Code, and all of the powers of the San Diego
Unified School District, as well as all the powers of a joint powers
agency granted pursuant to this chapter, to acquire property and
to construct and improve and finance one or more schools, housing
projects, parks, recreational facilities, and any other facilities
reasonably necessary for their proper operation. Further, the San
Diego Model School Development Agency shall have all of the
powers of the City of San Diego pursuant to its charter and state
law to acquire property and to finance and operate parks and
recreational facilities and any other facilities reasonably necessary
for their proper operation.

(2) Notwithstanding paragraph (1), neither the San Diego Model
School Development Agency nor the Redevelopment Agency of
the City of San Diego shall expend any property tax increment
revenues to acquire property, and to construct, improve, and finance
a school within the City Heights Project Area.

(3) Nothing in this section shall relieve the San Diego Model
School Development Agency or the Redevelopment Agency of
the City of San Diego from its obligations to increase, improve,
and preserve the community’s supply of low- and moderate-income
housing, including, but not limited to, the obligation to provide
relocation assistance, the obligation to provide replacement
housing, the obligation to meet housing production quotas, and
the obligation to set aside property tax increment funds for those
purposes.

(4) The San Diego Model School Development Agency shall
perform any construction activities in accordance with the
applicable provisions of the Public Contract Code, the Education
Code, and the Labor Code that apply, respectively, to the
redevelopment agency, housing authority, housing commission,
school district, or city creating the San Diego Model School
Development Agency. Funding pursuant to Proposition MM, a
local San Diego County bond measure enacted by the voters for
the purpose of school construction, shall be used only for the
design, development, construction, and financing of school-related
facilities and improvements, including schools, as authorized and
to the extent authorized under Proposition MM.

(c) Any member of the joint powers agency, including the school
district, may, to the extent permitted by law, transfer and contribute
funds to the agency, including bond funds, to be deposited into
and to be held in a facility fund to be expended for purposes of the
acquisition of property for, and the development and construction
of, any school, housing project, or other facility described in this
section.

(d) Nothing contained in this section shall preclude the joint
powers agency from distributing funds, upon completion of
construction, the school, housing project, park, recreational facility,
or other facility to a member of the agency to operate the school,
housing project, park, or other facility that the member is otherwise
authorized to operate. These distribution provisions shall be set
forth in the joint powers agreement, if applicable.

(e) The San Diego Model School Development Agency may
construct a school in the City Heights Project Area pursuant to
Chapter 2.5 (commencing with Section 17250.10) of Part 10.5 of
the Education Code.

(f) (1) For contracts for public works projects awarded prior to begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert the San Diego Model School
Development Agency shall establish and enforce, with respect to
construction contracts awarded by the joint powers agency, a labor
compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code or shall contract with a third
party to operate a labor compliance program containing those
requirements. This requirement shall not apply to projects where
the agency has entered into a collective bargaining agreement that
binds all of the contractors and subcontractors performing work
on the project, but nothing shall prevent the joint powers agency
from operating a labor compliance program with respect to those
projects.

(2) For contracts for public works projects awarded on or after begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the agency shall reimburse the department for
its reasonable and directly related costs of performing prevailing
wage monitoring and enforcement on public works projects
pursuant to rates established by the department as set forth in
subdivision (h) of Section 1771.5 of the Labor Code. All moneys
collected pursuant to this subdivision shall be deposited in the
State Public Works Enforcement Fund created by Section 1771.3
of the Labor Code, and shall be used only for enforcement of
prevailing wage requirements on those projects. end delete begin insert January 1, 2012,
the project shall be subject to the requirements of Section 1771.4
of the Labor Code. end insert

begin delete

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the San
Diego Model School Development Agency may elect to continue
operating an existing previously approved labor compliance
program to monitor and enforce prevailing wage requirements on
the project if it has either not contracted with a third party to
conduct its labor compliance program and requests and receives
approval from the department to continue its existing program or
it enters into a collective bargaining agreement that binds all of
the contractors performing work on the project and that includes
a mechanism for resolving disputes about the payment of wages.

end delete

(g) Construction workers employed as apprentices by contractors
and subcontractors on contracts awarded by the San Diego Model
School Development Agency shall be enrolled in a registered
apprenticeship program, approved by the California Apprenticeship
Council, that has graduated apprentices in the same craft in each
of the preceding five years. This graduation requirement shall be
applicable for any craft that was first deemed by the Department
of Labor and the Department of Industrial Relations to be an
apprenticeable craft prior to January 1, 1998. A contractor or
subcontractor need not submit contract award information to an
apprenticeship program that does not meet the graduation
requirements of this subdivision. If no apprenticeship program
meets the graduation requirements of this subdivision for a
particular craft, the graduation requirements shall not apply for
that craft.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 11270 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

11270.  

As used in this article, “administrative costs” means
the amounts expended by the Legislature, the Legislative Counsel
Bureau, the Governor’s Office, the begin delete California Technology Agency, end delete
begin insert Department of Technology, end insert the Office of Planning and Research,
the Department of Justice, the State Controller’s Office, the State
Treasurer’s Office, the State Personnel Board, the Department of
Finance, the Financial Information System for California, the
Office of Administrative Law, the Department of Human
Resources, begin delete the Secretary of State and Consumer Services, end delete the
Secretary of California Health and Human Services, begin delete the Bureau
of State Audits, end delete begin insert the California State Auditor’s Office, end insert and the
California State Library, and a proration of any other cost to or
expense of the state for services or facilities provided for the
Legislature and the above agencies, for supervision or
administration of the state government or for services to other state
agencies.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 11544 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

11544.  

(a) The Technology Services Revolving Fund, hereafter
known as the fund, is hereby created within the State Treasury.
The fund shall be administered by the Director of Technology to
receive all revenues from the sale of technology or technology
services provided for in this chapter, for other services rendered
by the Department of Technology, and all other moneys properly
credited to the Department of Technology from any other source,
to pay, upon appropriation by the Legislature, all costs arising
from this chapter and rendering of services to state and other public
agencies, including, but not limited to, employment and
compensation of necessary personnel and expenses, such as
operating and other expenses of the Department of Technology,
and costs associated with approved information technology
projects, and to establish reserves. At the discretion of the Director
of Technology, segregated, dedicated accounts within the fund
may be established. The amendments made to this section by the
act adding this sentence shall apply to all revenues earned on or
after July 1, 2010.

(b) The fund shall consist of all of the following:

(1) Moneys appropriated and made available by the Legislature
for the purposes of this chapter.

(2) Any other moneys that may be made available to the
Department of Technology from any other source, including the
return from investments of moneys by the Treasurer.

(c) The Department of Technology may collect payments from
public agencies for providing services to begin delete those agencies that the
agencies have requested from the Department of Technology. end delete
begin insert client agencies. end insert The Department of Technology may require
monthly payments by client agencies for the services begin delete the agencies
have requested. end delete begin insert provided. end insert Pursuant to Section 11255, the Controller
shall transfer any amounts so authorized by the Department of
Technology, consistent with the annual budget of each department,
to the fund. The Department of Technology shall notify each
affected state agency upon requesting the Controller to make the
transfer.

(d) At the end of any fiscal year, if the balance remaining in the
fund at the end of that fiscal year exceeds 25 percent of the portion
of the Department of Technology’s current fiscal year budget used
for support of data center and other client services, the excess
amount shall be used to reduce the billing rates for services
rendered during the following fiscal year.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 11548.5 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

11548.5.  

This chapter shall remain in effect only until January
1, 2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.

end delete

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Chapter 10 (commencing with Section 11850) is added
to Part 1 of Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 10. end insert The Financial Information System for
California (FISCal)

 

Article begin insert 1. end insert   General Provisions

 

begin insert 11850. end insert   

This chapter shall be known, and may be cited, as the
Financial Information System for California (FISCal) Act.

begin insert 11852. end insert   

For purposes of this chapter, the following terms shall
have the following meanings:

(a) “Approved FISCal Project documents” means any Special
Project Report approved by the Department of Technology, or its
successor agency, for the FISCal, as may be amended, augmented,
or changed by any subsequent approved Special Project Report
or legislative action.

(b) “Cost or costs of the FISCal system” means all costs related
to the acquisition, design, development, installation, and
deployment, maintenance, operation, and enhancement of the
system, including, but not limited to, software, hardware, licenses,
upgrades, training, facilities, contractors, and staff.

(c) “Cost allocation plan” means the plan described in Section
11874.

(d) “FISCal” means the Financial Information System for
California.

(e) “FISCal Internal Services Fund” means the fund created
pursuant to Section 11870.

(f) “FISCal Service Center” means the entity created pursuant
to Section 11890.

(g) “Interface” means to communicate or interoperate with the
FISCal system.

(h) “Office” means the FISCal project office.

(i) “State departments and agencies” means all state offices,
officers, departments, divisions, bureaus, boards, commissions,
organizations, or agencies, claims against which are paid by
warrants drawn by the Controller, and whose financial activities
are reported in the annual financial statement of the state or are
included in the annual Governor’s Budget, including, but not
limited to, the California State University, the University of
California, the legislative branch, and the judicial branch.

(j) “System” or “FISCal system” means a single integrated
financial management system for the state that encompasses the
management of resources and dollars as described in the approved
FISCal Project documents and includes the information required
by Section 11862.

begin insert 11854. end insert   

The Legislature intends that the FISCal system meet
all of the following objectives:

(a) Replace the state’s aging legacy financial management
systems and eliminate fragmented and diverse reporting by
implementing standardized financial management processes and
systems across all departments and control agencies. For purposes
of this subdivision, “financial management” means accounting,
budgeting, cash management, asset accounting, vendor
management, and procurement.

(b) Increase competition by promoting business opportunities
through the use of electronic bidding, online vendor interaction,
and automated vendor functions.

(c) Maintain a central source for financial management data
to reduce the time and expense of vendors, departments, and
agencies collecting, maintaining, and reconciling redundant data.

(d) Increase investment returns through timely and accurate
monitoring of cash balances, cashflow forecasting, and timing of
receipts and disbursements.

(e) Improve fiscal controls and support better decisionmaking
by state managers and the Legislature by enhancing the quality,
timeliness, consistency, and accessibility of financial management
information through the use of powerful data access tools,
standardized data, and financial management reports.

(f) Improve access and transparency of California’s financial
management information allowing the implementation of increased
auditing, compliance reporting, and fiscal accountability while
sharing information between the public, the Legislature, external
stakeholders, state, federal, and local agencies.

(g) Automate manual processes by providing the ability to
electronically receive and submit financial management documents
and data between agencies, departments, banks, vendors, and
other government entities.

(h) Provide online access to financial management information
resulting in a reduction of payment or approval inquiries, or both.

(i) Improve the state’s ability to preserve, access, and analyze
historical financial management information to reduce the
workload required to research and prepare this information.

(j) Enable the state to more quickly implement, track, and report
on changes to financial management processes and systems to
accommodate new information such as statutory changes and
performance information.

(k) Reduce the time, workload, and costs associated with
capturing and projecting revenues, expenditures, and program
needs for multiple years and scenarios, and for tracking, reporting,
and responding to legislative actions.

(l) Track purchase volumes and costs by vendor and commodity
code or service code to increase strategic sourcing opportunities,
reduce purchase prices, and capture total state spending data.

(m) Reduce procurement cycle time by automating purchasing
authority limits and approval dependencies, and easing access to
goods and services available from existing sources, including, but
not limited to, using leveraged procurement agreements.

(n) Streamline the accounts receivable collections process and
allow for offset capability which will provide the ability for
increased cash collection.

(o) Streamline the payment process and allow for faster vendor
payments that will reduce late payment penalty fees paid by the
state.

(p) Improve role-based security and workflow authorization by
capturing near real-time data from the state’s human resources
system of record.

(q) Implement a stable and secure information technology
infrastructure.

 

Article begin insert 2. end insert   Development and Implementation of FISCal

 

begin insert 11860. end insert   

(a) To serve the best interest of the state by optimizing
the financial business management of the state, the Department
of Finance, the Controller, the Treasurer, and the Department of
General Services shall collaboratively develop, implement, utilize,
and maintain the FISCal system. This effort will ensure best
business practices by embracing opportunities to reengineer the
state’s business processes and will encompass the management of
resources and funds in the areas of budgeting, accounting,
procurement, cash management, financial management, financial
reporting, cost accounting, asset accounting, project accounting,
and grant accounting.

(b) (1) All state departments and agencies shall use the FISCal
system, or, upon approval from the office, a department or agency
shall be permitted to interface its system with the FISCal system.
The FISCal system is intended to replace any existing central or
departmental systems duplicative of the functionality of the FISCal
system.

(2) The FISCal system shall first be developed and implemented
with a select number of state departments and agencies, as selected
by the office. Once the FISCal system has developed end-to-end
processes that meet the financial management needs of the state
and has been determined by the office to be effective, operationally
efficient, and secure, the FISCal system shall be further
implemented, in phases, as more fully described in the approved
FISCal project documents, at all remaining state departments and
agencies.

begin insert 11862. end insert   

(a) In addition to the requirements set forth in the
approved FISCal project documents, the FISCal system shall
include a state budget transparency component that allows the
public to have information regarding General Fund and federal
fund expenditure data, using an Internet Web site, by including
all of the following information for each General Fund and federal
fund expenditure:

(1) The name and principal location of each entity or other
recipient of the funds.

(2) The amount of expenditure.

(3) The type of transaction.

(4) The identity of the state department or agency making the
expenditure.

(5) The budget program source for the expenditure.

(6) A brief description of the purpose for the expenditure.

(7) A brief description of any item purchased pursuant to the
expenditure.

(b) This section shall not require the disclosure of information
deemed confidential or otherwise exempt from disclosure under
state or federal law.

begin insert 11864. end insert   

(a) Throughout the development of the FISCal system,
the California State Auditor’s Office shall independently monitor
the FISCal system as the California State Auditor deems
appropriate. The California State Auditor’s Office independent
monitoring of the FISCal system shall include, but not be limited
to, all of the following:

(1) Monitoring the contract for independent project oversight
and independent verification and validation services relating to
the FISCal system.

(2) Assessing whether concerns about the FISCal project raised
by the independent project oversight and independent verification
and validation services are being addressed by the office and the
steering committee of the office.

(3) Assessing whether the FISCal system is progressing timely
and within its budget.

(b) The California State Auditor’s Office shall report, at a
minimum, on or before January 10 of each year, on the FISCal
system activities that the California State Auditor’s Office deems
appropriate to monitor pursuant to this section in a manner
consistent with Chapter 6.5 (commencing with Section 8543) of
Division 1.

(c) This section shall not supersede or compromise the
Department of Technology’s oversight authority and
responsibilities with respect to the FISCal system.

 

Article begin insert 3. end insert   Funding and Accounts

 

begin insert 11870. end insert   

The FISCal Internal Services Fund continues in
existence in the State Treasury to pay the costs of development,
implementation, operations, and maintenance of the FISCal System.
All assets, liabilities, and surplus shall remain in the FISCal
Internal Services Fund. The Department of Finance shall make
the final determination of the budgetary and accounting
transactions that are required to carry out this section. Accounts
and subaccounts may be created within the FISCal Internal
Services Fund as needed. Moneys in the FISCal Internal Services
Fund, and its accounts and subaccounts, are available for cashflow
borrowing by the General Fund pursuant to Section 16310.

begin insert 11872. end insert   

(a) The FISCal Consolidated Payment Fund is created
in the State Treasury for the purpose of allowing the Controller
to issue consolidated payments, excluding payroll, to any payee,
of costs that are chargeable to appropriations made from other
funds in the State Treasury, thereby allowing for efficient
processing through the FISCal system of payments.

(b) The amounts to be disbursed from the FISCal Consolidated
Payment Fund shall be transferred by the Controller, from the
funds and appropriations otherwise chargeable therewith, to the
FISCal Consolidated Payment Fund prior to the time of
disbursement. All amounts in the FISCal Consolidated Payment
Fund that are derived from abatements, refunds of amounts
disbursed, returned warrants, or the cancellation of warrants
issued from the FISCal Consolidated Payment Fund shall be
returned by the Controller to the funds and appropriations from
which the amounts were originally transferred.

begin insert 11874. end insert   

(a) The office, subject to the approval of the
Department of Finance, shall establish and assess fees and a
payment schedule for state departments and agencies to use or
interface with the FISCal system. The fees shall recover the costs
of the FISCal system, including, but not limited to, the ongoing
maintenance and operation costs of the FISCal system and shall
be deposited in the FISCal Internal Services Fund. The fees shall
be based on an interim cost allocation plan until statistically valid
usage data is available.

(b) The office shall submit the cost allocation plan, including
the methodology used to develop fees, to the Department of Finance
during the state’s annual budget development processes for review
and approval. The office shall submit any proposed changes in
fees or methodology to the Department of Finance concurrently
with budget requests.

 

Article begin insert 4. end insert   Background Check Program

 

begin insert 11880. end insert   

(a) The office and the FISCal Service Center shall
require fingerprint images and associated information from any
employee, prospective employee, contractor, subcontractor,
volunteer, vendor, and partner agency employee assigned to either
the office or the FISCal Service Center whose duties include, or
would include, having access to confidential or sensitive
information or data on the network or computing infrastructure.

(b) The fingerprint images and associated information described
in subdivision (a) shall be furnished to the Department of Justice
for the purpose of obtaining information as to the existence and
nature of any of the following:

(1) A record of state or federal convictions and the existence
and nature of state or federal arrests for which the person is free
on bail or on his or her own recognizance pending trial or appeal.

(2) Being convicted of, or pleading nolo contendere to, a crime,
or having committed an act involving dishonesty, fraud, or deceit,
if the crime or act is substantially related to the qualifications,
functions, or duties of the person in accordance with this provision.

(3) Any conviction or arrest, for which the person is free on bail
or on his or her own recognizance pending trial or appeal, with
a reasonable nexus to the information or data to which the person
shall have access.

(c) Requests for federal criminal offender record information
received by the Department of Justice pursuant to this section shall
be forwarded to the Federal Bureau of Investigation by the
Department of Justice.

(d) The Department of Justice shall respond to the Chief of
Human Resources of the office or the FISCal Service Center with
information as provided under subdivision (p) of Section 11105
of the Penal Code.

(e) The Chief of Human Resources of the office or the FISCal
Service Center shall request subsequent arrest notifications from
the Department of Justice as provided under Section 11105.2 of
the Penal Code.

(f) The Department of Justice may assess a fee sufficient to cover
the processing costs required under this section, as authorized
pursuant to subdivision (e) of Section 11105 of the Penal Code.

(g) Persons described in subdivision (a) may be rejected if it is
determined they meet the criteria described in paragraph (2) or
(3) of subdivision (b). If a person is rejected, the individual shall
receive a copy of the response record from the Chief of Human
Resources of the office or the FISCal Service Center.

(h) The Chief of Human Resources of the office or the FISCal
Service Center shall follow a written appeal process for an
individual described in subdivision (a) who is determined ineligible
for employment because of his or her Department of Justice or
Federal Bureau of Investigation criminal offender record.

(i) When considering the background information received
pursuant to this section, the Chief of Human Resources of the office
or the FISCal Service Center shall take under consideration any
evidence of rehabilitation, including, but not limited to,
participation in treatment programs and age and specifics of the
offense.

 

Article begin insert 5. end insert   FISCal Service Center

 

begin insert 11890. end insert   

There is in state government the FISCal Service Center.

begin insert 11892. end insert   

(a) Consistent with the FISCal Service Center Charter,
the FISCal Service Center shall incrementally assume
responsibility of the FISCal system functionality as portions of the
FISCal system are implemented and accepted.

(b) The FISCal Service Center shall provide the administrative
functions for the FISCal system, including those functions of the
office, during its existence.

(c) The office and the FISCal Service Center shall exist
concurrently during the phased implementation of the FISCal
system. Upon full implementation and final acceptance of the
FISCal system, the FISCal Service Center shall perform all
maintenance and operation of the FISCal system.

begin insert 11894. end insert   

The FISCal Executive Partner shall have appointment
power for both the office and the FISCal Service Center and shall
oversee the day-to-day functions of both the office and the FISCal
Service Center. The FISCal Executive Partner shall identify and
transfer staff from the office to the FISCal Service Center to further
performance of the duties specified in Section 11892, in accordance
with Section 19050.9.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 12153 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12153.  

The Secretary of State shall appoint a competent person
to the position of begin delete Keeper of the end delete begin insert Chief of end insert Archives.

In case of his begin insert or her end insert absence or inability to perform the duties
of his begin insert or her end insert position, the Secretary of State shall designate some
other competent person to act in his begin insert or her end insert place.

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 12168.7 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12168.7.  

(a) The California Legislature hereby recognizes the
need to adopt uniform statewide standards for the purpose of
storing and recording permanent and nonpermanent documents in
electronic media.

(b) In order to ensure that uniform statewide standards remain
current and relevant, the Secretary of begin delete State, in consultation with
the Department of General Services, end delete begin insert State end insert shall approve and adopt
appropriate standards established by the American National
Standards Institute or the Association for Information and Image
Management.

(c) The standards specified in subdivision (b) shall include a
requirement that a trusted system be utilized. For this purpose and
for purposes of Sections 25105, 26205, 26205.1, 26205.5, 26907,
27001, 27322.2, 34090.5, and 60203, Section 102235 of the Health
and Safety Code, and Section 10851 of the Welfare and Institutions
Code, “trusted system” means a combination of techniques,
policies, and procedures for which there is no plausible scenario
in which a document retrieved from or reproduced by the system
could differ substantially from the document that is originally
stored.

(d) In order to develop statewide standards as expeditiously as
possible, and until the time that statewide standards are adopted
pursuant to subdivision (b), state officials shall ensure that
microfilming, electronic data imaging, and photographic
reproduction are done in compliance with the minimum standards
or guidelines, or both, as recommended by the American National
Standards Institute or the Association for Information and Image
Management for recording of permanent records or nonpermanent
records.

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 12224 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12224.  

The Secretary of State may receive into the archives
any item that he begin insert or she end insert deems to be of historical begin delete value and shall
receive into the archives any other item from a state agency if
directed to do so by the Department of General Services. end delete begin insert value. end insert

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 12225 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12225.  

begin delete With the approval of the Department of General
Services, the end delete begin insert The end insert Secretary of State may at any time return to the
state agency from which it was received any item in the archives
which he begin insert or she end insert does not deem to be of historical value.

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 12227 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12227.  

The begin delete Keeper of the end delete begin insert Chief of end insert Archives is responsible for
the preservation and indexing of material deposited in the State
begin delete archives, end delete begin insert Archives, end insert and shall make the material readily available
for use.

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 12228 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12228.  

The begin delete Keeper of the end delete begin insert Chief of end insert Archives shall give an
appropriate receipt for all material received by him begin insert or her end insert as a part
of the archives.

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 12229 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12229.  

The Secretary of State may maintain any item in an
active file in his begin insert or her end insert office for such time as he begin insert or she end insert deems
proper before transferring it to the archives.

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 12230 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12230.  

The Secretary of State shall establish a Document
Preservation Shop and an Indexing Section to facilitate the
preservation and indexing of the archives. begin delete He shall also prepare
exhibitions of documentary materials from the archives to be
displayed in the State Capitol Building. end delete

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 12231 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12231.  

In carrying out the provisions of this article, the
Secretary of State shall consult with and give consideration to the
recommendations of the begin delete California Heritage Preservation
Commission, end delete begin insert California Historical Records Advisory Board, end insert which
for that purpose shall serve in an advisory capacity to the Secretary
of State.

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 12232 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12232.  

The Secretary of State shall utilize the begin delete California State
Library end delete begin insert California Historical Records Advisory Board end insert to advise,
encourage, and coordinate the activities of the county historical
records commissions, either designated or appointed by the county
boards of supervisors pursuant to Section 26490. The chairman or
his or her designee of each county historical records commission
may attend an annual begin delete meeting with the California State Library, end delete
begin insert meeting, end insert at state expense, to receive advice in the preservation of
local government archives and public library collections of
historical materials.

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 12233 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12233.  

begin delete (a) end delete begin delete   end delete The Secretary of State shall conduct under the
administration of the State Archives a regular governmental history
documentation program to provide through the use of oral history
a continuing documentation of state policy development as
reflected in California’s legislative and executive history. The
secretary may contract with oral history units affiliated with public
or private nonprofit colleges, universities, or historical societies
located in California to perform selected program activities. The
secretary shall prescribe professional standards for the
accomplishment and governance of the program.

begin delete

(b) The Secretary of State shall submit annually a report to the
Legislature on the program conducted pursuant to this section.

end delete

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Section 12234 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

12234.  

The secretary shall conduct a feasibility study to assess
the needs, costs, and appropriate location for a new facility or
conversion of an existing facility, or both, to house the collections
and operations of the California State Archives for at least the next
50 years. The study shall take into consideration the
appropriateness of combining compatible needs of other agencies
to allow for cost-effective construction or conversion, or both, of
facilities.

end delete

begin insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 12235 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

12235.  

(a) The Director of General Services, as agent for the
Secretary of State, shall construct on Site 7, Capital Area Plan, a
Secretary of State and State Archives Building Complex, parking
facilities, and any other improvements, betterments, and facilities
related thereto, for the primary use of the Secretary of State and
State Archives as outlined in the study report required by Section
12234.

(b) Revenue bonds, negotiable notes, and negotiable bond
anticipation notes may be issued by the State Public Works Board
pursuant to the State Building Construction Act of 1955, Part 10b
(commencing with Section 15800), to finance the construction and
equipping of the Secretary of State and State Archives Building
Complex, parking facilities, and any other improvements,
betterments, and facilities related thereto as described in
subdivision (a).

(c) The amount of revenue bonds, negotiable notes, or negotiable
bond anticipation notes to be sold shall equal the cost of
construction and equipping of the complex and facilities, the cost
of working drawings, sums necessary to pay financing costs,
including interest during construction, and a reasonable reserve
fund. Construction costs shall not exceed one hundred million
dollars ($100,000,000) based on the Lee-Saylor Cost Index 433.

(d) The amount of negotiable bond anticipation notes sold shall
not exceed the amount of revenue bonds and negotiable notes
authorized by this section. Any augmentation of the approved
project costs shall be subject to Section 13332.11. The board may
borrow funds for project costs from the Pooled Money Investment
Account pursuant to Sections 16312 and 16313.

(e)  At least 20 days prior to the award of the principal bid for
the construction of the complex, the director shall notify the
chairpersons of the fiscal committees of each house of the
Legislature of the amount of the bid.

(f) (1) The Director of General Services may lease the complex
and facilities financed with the proceeds of the revenue bonds,
negotiable notes, or negotiable bond anticipation notes from the
board pursuant to Section 15817 for use by the Secretary of State
and State Archives.

(2) The director shall notify the Chairperson of the Joint
Legislative Budget Committee of the director’s intention to execute
any lease agreement authorized by paragraph (1) at least 20 days
prior to its execution.

end delete

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 12236 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12236.  

(a) The Secretary of State shall establish begin delete the end delete begin insert a end insert Local
Government Records Program to be administered by the State
Archives to establish guidelines for local government records
retention and to provide archival support to local agencies in this
state.

(b) The Secretary of State shall establish, publish, update, and
maintain on a permanent basis guidelines for local government
records retention. The Secretary of State may consult with
appropriate professional organizations representing city, county,
and special district records administrators regarding the
establishment of these guidelines.

(c) The program shall be primarily responsible for the
performance of the following functions:

(1) Publish the guidelines developed pursuant to subdivision
(b) in paper form initially and on the Internet web site for the
Secretary of State.

(2) Monitor and review changes in state laws and administrative
regulations that pertain to local government records retention.

(3) Monitor practices and procedures in records administration
that have bearing on local government records retention and
management.

(4) Update published guidelines on a current and timely basis
as changes occur.

(5) Make supporting information about state laws and
administrative regulations that pertain to local government records
retention available to local government agencies.

(6) Function as the liaison for the State Archives with
appropriate professional organizations.

(7) Maintain communication with individual local government
agencies.

(8) Consult and provide information and advice to local
government agencies on archival begin insert and records management end insert
practices.

(9) Consult and provide information and advice to local
government agencies on history and heritage.

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Article 7 (commencing with Section 12270) is added
to Chapter 3 of Part 2 of Division 3 of Title 2 of the end insert begin insert Government
Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 7. end insert   State Records Management Act

 

begin insert 12270. end insert   

This article shall be known, and may be cited, as the
State Records Management Act.

begin insert 12271. end insert   

For the purposes of this article, the following terms
shall have the following meanings:

(a) “Acquire” includes acquisition by gift, purchase, lease,
eminent domain, or otherwise.

(b) “Archival value” means the ongoing usefulness or
significance of a record based on the administrative, legal, fiscal,
evidential, or historical information it contains, justifying its
permanent preservation.

(c) “Public record plant” means the plant, or any part thereof,
or any record therein, of any person engaged in the business of
searching or publishing public records or insuring or guaranteeing
titles to real property, including copies of public records or
abstracts and memoranda taken from public records that are
owned by or in possession of that person or that are used by that
person in his or her business.

(d) “Public use form” means a form used by the state to obtain
or to solicit facts, opinions, or other information from the public
or a private citizen, partnership, corporation, organization,
business trust, or nongovernmental entity or legal representative
thereof.

(e) “Record” has the same meaning as “public records” as
defined in subdivision (e) of Section 6252, and includes, but is not
limited to, any writing containing information relating to the
conduct of the public’s business prepared, owned, used, or retained
by a state or local agency regardless of physical form or
characteristics. Library and museum materials made or acquired
and preserved solely for reference or exhibition purposes and
stocks of publications and of processed documents are not included
within the definition of the term “record” as used in this article.

begin insert 12272. end insert   

(a) The Secretary of State shall establish and
administer a records management program that will apply efficient
and economical management methods to the creation, utilization,
maintenance, retention, preservation, and disposal of state records.

(b) The duties of the Secretary of State shall include, but shall
not be limited to:

(1) Establishing standards, procedures, and techniques for
effective management of records.

(2) Obtaining from agencies reports required for the
administration of the program.

begin insert 12273. end insert   

Notwithstanding any other law, a record held in the
State Records Center or by a state agency determined by the
Secretary of State to have archival value and to be at risk of
damage or loss, or in poor physical condition, shall be transferred
to the State Archives at the direction of the Secretary of State with
notification to the head of the agency not less than 10 days prior
to the transfer. The Secretary of State shall enforce all statutory
requirements regarding the confidentiality of records transferred
to the State Archives pursuant to this section and shall make the
records available to authorized individuals or the public, as
determined by applicable law.

begin insert 12274. end insert   

The head of a state agency shall do all of the following:

(a) Establish and maintain an active, continuing program for
the economical and efficient management of the records and
information collection practices of the agency. The program shall
ensure that the information needed by the agency may be obtained
with a minimum burden upon individuals and businesses, especially
small business enterprises and others required to furnish the
information. Unnecessary duplication of efforts in obtaining
information shall be eliminated as rapidly as practical. Information
collected by the agency shall, as far as is expedient, be collected
and tabulated in a manner that maximizes the usefulness of the
information to other state agencies and the public.

(b) Determine, with the concurrence of the Secretary of State,
records essential to the functioning of state government in the
event of a major disaster.

(c) When requested by the Secretary of State, provide a written
justification for storage or extension of scheduled retention of a
record in the State Records Center for a period of 50 years or
more. The Secretary of State shall review and approve any
scheduled retention of a record in the State Records Center for a
period of 50 years or more. A record deemed to have archival
value shall be transferred to the State Archives.

(d) Comply with the rules, regulations, standards, and
procedures issued by the Secretary of State.

begin insert 12275. end insert   

(a) A record shall not be destroyed or otherwise
disposed of by an agency of the state, unless it is determined by
the Secretary of State that the record has no further administrative,
legal, or fiscal value and the Secretary of State has determined
that the record is inappropriate for preservation in the State
Archives.

(b) The Secretary of State shall not authorize the destruction of
a record subject to audit until he or she has determined that the
audit has been performed.

(c) The Secretary of State shall not authorize the destruction of
all or any part of an agency rulemaking file subject to Section
11347.3.

begin insert 12276. end insert   

(a) The records of a state agency may be microfilmed,
electronically data imaged, or otherwise photographically
reproduced and certified upon the written authorization of the
head of the agency. The microfilming, electronic data imaging, or
photographic reproduction shall be made in compliance with the
minimum standards or guidelines, or both, as recommended by
the American National Standards Institute or the Association for
Information and Image Management, and as adopted by the
Secretary of State, for recording of permanent records or
nonpermanent records.

(b) The certification of each reproduction or set of reproductions
shall be in accordance with the standards, or have the approval,
of the Attorney General. The certification shall contain a statement
of the identity, description, and disposition or location of the
records reproduced, the date, reason, and authorization for the
reproduction, and other information that the Attorney General
requires.

(c) The certified reproductions shall be deemed to be original
records for all purposes, including introduction in courts of law
and state agencies.

begin insert 12277. end insert   

A person, other than a temporary employee, serving in
the state civil service and employed by the Department of General
Services in the California State Records and Information
Management Program shall remain in the state civil service and
is hereby transferred to the Secretary of State. The status, position,
and rights of the person shall not be affected by the transfer and
shall continue to be retained by the person pursuant to the State
Civil Service Act.

begin insert 12278. end insert   

All equipment and records in the California State
Records and Information Management Program in the Department
of General Services are transferred to the Secretary of State.

begin insert 12279. end insert   

If a record of a state agency has been lost or destroyed
by conflagration or other public calamity, the Secretary of State
may acquire the right to reproduce any portion of a public record
plant as is necessary for the purpose of restoring or replacing the
record or its substance.

end insert

begin insert

begin insert SEC. 25. end insert   

end insert

begin insert Section 12432 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12432.  

(a) The Legislature hereby finds and declares that it is
essential for the state to replace the current automated human
resource/payroll systems operated by the Controller to ensure that
state employees continue to be paid accurately and on time and
that the state may take advantage of new capabilities and improved
business practices. To achieve this replacement of the current
systems, the Controller is authorized to procure, modify, and
implement a new human resource management system that meets
the needs of a modern state government. This replacement effort
is known as the 21st Century Project.

(b) Notwithstanding any other law, beginning with the 2004-05
fiscal year, the Controller may assess the special and
nongovernmental cost funds in sufficient amounts to pay for the
authorized 21st Century Project costs that are attributable to those
funds. Assessments in support of the expenditures for the 21st
Century Project shall be made quarterly, and the total amount
assessed from these funds annually shall not exceed the total
expenditures incurred by the Controller for the 21st Century Project
that are attributable to those funds in that fiscal year.
Appropriations for this purpose shall be made in the annual Budget
Act.

(c) To the extent permitted by law, beginning with the 2004-05
fiscal year, the Controller shall establish agreements with various
agencies and departments for the collection from federal funds of
costs that are attributable to federal funds. The total amount
collected from those agencies and departments annually shall not
exceed the total expenditures incurred by the Controller for the
21st Century Project that are attributable to federal funds in that
fiscal year. Appropriations for that purpose shall be made in the
annual Budget Act.

(d) It is the intent of the Legislature that, beginning not earlier
than the 2006-07 fiscal year, future annual Budget Acts include
General Fund appropriations in sufficient amounts for expenditures
for the 21st Century Project that are attributable to the General
Fund. It is the Legislature’s intent that the share of the total project
costs paid for by the General Fund shall be equivalent to the share
of the total project costs paid for from special and nongovernmental
cost fund assessments and collections from federal funds.

(e) This section shall remain in effect only until June 30, begin delete 2014, end delete
begin insert 2015, end insert and as of that date is begin delete repealed, unless a later enacted statute,
that is enacted before June 30, 2014, deletes or extends that date. end delete
begin insert repealed. end insert

begin insert

begin insert SEC. 26. end insert   

end insert

begin insert Section 12478 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12478.  

Upon receipt of proof, satisfactory to the Controller,
that a pay roll warrant issued by the Controller has been lost or
destroyed prior to its delivery to the employee to whom it is
payable, the Controller shall, upon certification by the payee’s
appointing power, issue a begin delete duplicate end delete begin insert replacement end insert warrant in
payment of the same amount, without requiring a bond from the
payee, and any loss incurred in connection therewith shall be
charged against the account from which the payment was derived.
Without limiting the generality of the preceding sentence, a pay
roll warrant shall be considered to have been lost if it has been
sent to the payee but not received by him within a reasonable time,
consistent with the policy of prompt payment of employees or if
it has been sent to a state officer or employee for delivery to the
payee or for forwarding to another state officer or employee for
such delivery, and has not been received within such reasonable
time.

A begin delete duplicate end delete begin insert replacement end insert warrant is void if not presented for
payment to the begin delete State end delete Treasurer within the same time limit provided
by law for the original warrant.

begin insert

begin insert SEC. 27. end insert   

end insert

begin insert Section 13300.5 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

13300.5.  

(a) The Legislature finds and declares that the project
of the FISCal Project to modernize the state’s internal financial
systems is a critical project that must be subject to the highest level
of oversight. According to the begin delete California Technology Agency, end delete
begin insert Department of Technology, end insert the size and scope of this modernization
and automation effort make this project one of the highest risk
projects undertaken by the state. Therefore, the Legislature must
take steps to ensure it is fully informed as the project is
implemented. It is the intent of the Legislature to adopt additional
reporting requirements for the FISCal Project Office to adequately
manage the project’s risk and to ensure the successful
implementation of this effort.

(b) The FISCal Project Office shall report to the Legislature,
by February 15 of each year, an update on the project. The report
shall include all of the following:

(1) An executive summary and overview of the project’s status.

(2) An overview of the project’s history.

(3) Significant events of the project within the current reporting
period and a projection of events during the next reporting period.

(4) A discussion of mitigation actions being taken by the project
for any missed major milestones.

(5) A comparison of actual to budgeted expenditures, and an
explanation of variances and any planned corrective actions,
including a summary of FISCal project and staffing levels and an
estimate of staff participation from partner agencies.

(6) An articulation of expected functionality and qualitative
benefits from the project that were achieved during the reporting
period and that are expected to be achieved in the subsequent year.

(7) An overview of change management activities and
stakeholder engagement in the project, including a summary of
departmental participation in the FISCal project.

(8) A discussion of lessons learned and best practices that will
be incorporated into future changes in management activities.

(9) A description of any significant software customization,
including a justification for why, if any, customization was granted.

(10) Updates on the progress of meeting the project begin delete objectives,
including the objectives provided in paragraph (1) of subdivision
(c) of Section 15849.22. end delete begin insert objectives. end insert

(c) The initial report, due February 15, 2013, shall provide a
description of the approved project scope. Later reports shall
describe any later deviations to the project scope, cost, or schedule.

(d) The initial report shall also provide a summary of the project
history from Special Project Report 1 to Special Project Report 4,
inclusive.

(e) This section shall remain in effect until a postimplementation
evaluation report has been approved by the begin delete California Technology
Agency. end delete begin insert Department of Technology. end insert The begin delete California Technology
Agency end delete begin insert Department of Technology end insert shall post a notice on its
Internet Web site when the report is approved.

begin insert

begin insert SEC. 28. end insert   

end insert

begin insert Section 13332.11 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

13332.11.  

(a) (1) Except as otherwise specified in paragraph
(2), begin delete no end delete funds appropriated for capital outlay begin delete may end delete begin insert shall not end insert be
expended by any state agency, including begin insert , but not limited to, end insert the
University of California, the California State University, the
California Community Colleges, and the Judicial begin delete Council end delete begin insert Council, end insert
until the Department of Finance and the State Public Works Board
have approved preliminary plans for the project to be funded from
a capital outlay appropriation.

(2) Paragraph (1) shall not apply to any of the following:

(A) Amounts for acquisition of real property in fee, or any other
lesser interest.

(B) Amounts for equipment or minor capital outlay projects.

(C) Amounts appropriated for preliminary plans, surveys, and
studies.

(b) Notwithstanding subdivision (a), approvals by the State
Public Works Board and the Department of Finance for the
University of California and the California Community Colleges
shall apply only to the allocation of state capital outlay funds
appropriated by the Legislature, including land acquisition and
equipment funds.

(c) Any appropriated amounts for working drawings or
construction where the working drawings or construction have
been started by any state agency prior to approval of the
preliminary plans by the State Public Works Board shall be reverted
to the fund from which the appropriation was made, as approved
by the Department of Finance. begin delete No end delete begin insert A end insert major project for which a
capital outlay appropriation is made shall begin insert not end insert be put out to bid
until the working drawings have been approved by the Department
of Finance. begin delete No end delete begin insert A end insert substantial change shall begin insert not end insert be made to the
approved preliminary plans or approved working drawings without
written approval by the Department of Finance. begin delete Any end delete begin insert The
Department of Finance shall approve any end insert proposed construction
bid begin delete alternates shall be approved by the Department of Finance. end delete
begin insert alternates. end insert

(d) The Department of Finance shall approve the use of funds
from a capital outlay appropriation for the purchase of any
significant unit of equipment.

(e) The State Public Works Board may augment a major project
in an amount of up to 20 percent of the total of the capital outlay
appropriations for the project, irrespective of whether any such
appropriation has reverted. For projects authorized through multiple
fund sources, including, but not limited to, general obligation bonds
and lease-revenue bonds, to the extent otherwise permissible, the
Department of Finance shall have full authority to determine which
of the fund sources will bear all or part of an augmentation. The
board shall defer all augmentations in excess of 20 percent of the
amount appropriated for each capital outlay project until the
Legislature makes additional funds available for the specific
project.

(f) In addition to the powers provided by Section 15849.6, the
State Public Works Board may further increase the additional
amount in Section 15849.6 to include a reasonable construction
reserve within the construction fund for any capital outlay project
without augmenting the project. The amount of the construction
reserve shall be within the 20 percent augmentation limitation.
The board may use this amount to augment the project, when and
if necessary, after the lease revenue bonds are sold to begin delete assure end delete begin insert ensure end insert
completion of the project. begin delete Upon completion of the project, any
amount remaining in the construction reserve funds shall be used
to offset rental payments. end delete

(g) Augmentations in excess of 10 percent of the amount
appropriated for each capital outlay project shall be reported to
the Chairperson of the Joint Legislative Budget Committee, or his
or her designee, 20 days prior to board approval, or not sooner
than whatever lesser time the chairperson, or his or her designee,
may in each instance determine.

(h) (1) The Department of Finance may change the
administratively or legislatively approved scope for major capital
outlay projects.

(2) If the Department of Finance changes the approved scope
pursuant to paragraph (1), the department shall report the changes
and associated cost implications to the Chairperson of the Joint
Legislative Budget Committee, the chairpersons of the respective
fiscal committees, and the legislative advisers of the State Public
Works Board 20 days prior to the proposed board action to
recognize the scope change.

(i) The State Public Works Board shall defer action with respect
to approval of an acquisition project, when it is determined that
the estimated cost of the total acquisition project, as approved by
the Legislature is in excess of 20 percent of the amount
appropriated, unless it is determined that a lesser portion of the
property is sufficient to meet the objectives of the project approved
by the Legislature, and the Chairperson of the Joint Legislative
Budget Committee, or his or her designee, is provided a 20-day
prior notification of the proposed reductions in the acquisition
project, or whatever lesser period the chairperson, or his or her
designee, may in each instance determine.

(j) The Department of Finance shall report to the Chairperson
of the Joint Legislative Budget Committee, the chairpersons of the
respective fiscal committees, and legislative advisers of the State
Public Works Board 20 days prior to the proposed board approval
of preliminary plans when it is determined that the estimated cost
of the total capital outlay construction project is in excess of 20
percent of the amount recognized by the Legislature.

(k) Nothing in this section shall be construed to limit or control
the Department of Transportation or the California Exposition and
State Fair in the expenditure of all funds appropriated to the
department for capital outlay purposes.

begin insert

begin insert SEC. 29. end insert   

end insert

begin insert Section 13332.19 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

13332.19.  

(a) For the purposes of this section, the following
definitions shall apply:

(1) “Design-build” means a construction procurement process
in which both the design and construction of a project are procured
from a single entity.

(2) “Design-build project” means a capital outlay project using
the design-build construction procurement process.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed.

(4) “Design-build solicitation package” means the performance
criteria, any concept drawings, the form of contract, and all other
documents and information that serve as the basis on which bids
or proposals will be solicited from the design-build entities.

(5) “Design-build phase” means the period following the award
of a contract to a design-build entity in which the design-build
entity completes the design and construction activities necessary
to fully complete the project in compliance with the terms of the
contract.

(6) “Performance criteria” means the information that fully
describes the scope of the proposed project and includes, but is
not limited to, the size, type, and design character of the buildings
and site; the required form, fit, function, operational requirements,
and quality of design, materials, equipment, and workmanship;
and any other information deemed necessary to sufficiently
describe the state’s needs.

(7) “Concept drawings” means any schematic drawings or
architectural renderings that are prepared, in addition to
performance criteria, in such detail as is necessary to sufficiently
describe the state’s needs.

(b)  begin insert (1) end insert begin insert   end insert Except as otherwise specified in begin delete paragraphs (1) to (4), end delete
begin insert subparagraphs (A) to (D), end insert inclusive, begin delete no end delete begin insert of paragraph (2) end insert funds
appropriated for a design-build project begin delete may end delete begin insert shall not end insert be expended
by any state agency, including, but not limited to, the University
of California, the California State University, the California
Community Colleges, and the Judicial Council, until the
Department of Finance and the State Public Works Board have
approved performance criteria or performance criteria and concept
drawings for the project.

begin delete

This

end delete

begin insert (2) end insert begin insert   end insert begin insert This end insert section shall not apply to any of the following:

begin delete

(1)

end delete

begin insert (A) end insert  Amounts for acquisition of real property, in fee or any lesser
interest.

begin delete

(2)

end delete

begin insert (B) end insert  Amounts for equipment or minor capital outlay projects.

begin delete

(3)

end delete

begin insert (C) end insert  Amounts appropriated for performance criteria and concept
drawings.

begin delete

(4)

end delete

begin insert (D) end insert  Amounts appropriated for preliminary plans, if the
appropriation was made prior to January 1, 2005.

(c) Any appropriated amounts for the design-build phase of a
design-build project, where funds have been expended on the
design-build phase by any state agency prior to the approval of
the performance criteria or the performance criteria and concept
drawings by the State Public Works Board, and all amounts not
approved by the board under this section shall be reverted to the
fund from which the appropriation was made. begin delete No end delete begin insert A end insert design-build
project for which a capital outlay appropriation is made shall begin insert not end insert
be put out to design-build solicitation until the bid package has
been approved by the Department of Finance. begin delete No end delete begin insert A end insert substantial
change shall begin insert not end insert be made to the performance criteria or to
performance criteria and concept drawings as approved by the
board and the Department of Finance without written approval by
the Department of Finance. begin delete Any end delete begin insert The Department of Finance shall
approve any end insert proposed bid or proposal alternates set forth in the
design-build solicitation begin delete package shall be approved by the
Department of Finance. end delete begin insert package. end insert

(d) The State Public Works Board may augment a design-build
project in an amount of up to 20 percent of the capital outlay
appropriations for the project, irrespective of whether any such
appropriation has reverted. For projects authorized through multiple
fund sources, including, but not limited to, general obligation bonds
and lease-revenue bonds, to the extent permissible, the Department
of Finance shall have full authority to determine which of the fund
sources will bear all or part of an augmentation. The board shall
defer all augmentations in excess of 20 percent of the amount
appropriated for each design-build project until the Legislature
makes additional funds available for the specific project.

(e) In addition to the powers provided by Section 15849.6, the
State Public Works Board may further increase the additional
amount in Section 15849.6 to include a reasonable construction
reserve within the construction fund for any capital outlay project
without augmenting the project. The amount of the construction
reserve shall be within the 20 percent augmentation limitation.
The board may use this amount to augment the project, when and
if necessary, after the lease-revenue bonds are sold to begin delete assure end delete begin insert ensure end insert
completion of the project. begin delete Upon completion of the project, any
amount remaining in the construction reserve fund shall be used
to offset rental payments. end delete

(f) Any augmentation in excess of 10 percent of the amounts
appropriated for each design-build project shall be reported to the
Chairperson of the Joint Legislative Budget Committee, or his or
her designee, 20 days prior to board approval, or not sooner than
whatever lesser time the chairperson, or his or her designee, may
in each instance determine.

(g) (1) The Department of Finance may change the
administratively or legislatively approved scope for major
design-build projects.

(2) If the Department of Finance changes the approved scope
pursuant to paragraph (1), the department shall report the changes
and associated cost implications to the Chairperson of the Joint
Legislative Budget Committee, the chairpersons of the respective
fiscal committees, and the legislative members of the State Public
Works Board 20 days prior to the proposed board action to
recognize the scope change.

(h) The Department of Finance shall report to the Chairperson
of the Joint Legislative Budget Committee, the chairpersons of the
respective fiscal committees, and the legislative members of the
State Public Works Board 20 days prior to the proposed board
approval of performance criteria or performance criteria and
concept drawings for any project when it is determined that the
estimated cost of the total design-build project is in excess of 20
percent of the amount recognized by the Legislature.

begin insert

begin insert SEC. 30. end insert   

end insert

begin insert Section 13963.1 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

13963.1.  

(a) The Legislature finds and declares all of the
following:

(1) Without treatment, approximately 50 percent of people who
survive a traumatic, violent injury experience lasting or extended
psychological or social difficulties. Untreated psychological trauma
often has severe economic consequences, including overuse of
costly medical services, loss of income, failure to return to gainful
employment, loss of medical insurance, and loss of stable housing.

(2) Victims of crime should receive timely and effective mental
health treatment.

(3) The board shall administer a program to evaluate applications
and award grants to trauma recovery centers.

(b) The board shall award a grant only to a trauma recovery
center that meets both of the following criteria:

(1) The trauma recovery center demonstrates that it serves as a
community resource by providing services, including, but not
limited to, making presentations and providing training to law
enforcement, community-based agencies, and other health care
providers on the identification and effects of violent crime.

(2) Any other related criteria required by the board.

begin delete

(c) Upon appropriation by the Legislature, the board shall award
grants totaling up to two million dollars ($2,000,000) per year. All
grants shall be funded only from the Restitution Fund.

end delete begin insert

(c) It is the intent of the Legislature to provide an annual
appropriation of two million dollars ($2,000,000) per year. All
grants awarded by the board shall be funded only from the
Restitution Fund.

end insert

(d) The board may award a grant providing funding for up to a
maximum period of three years. Any portion of a grant that a
trauma recovery center does not use within the specified grant
period shall revert to the Restitution Fund. The board may award
consecutive grants to a trauma recovery center to prevent a lapse
in funding. The board shall not award a trauma recovery center
more than one grant for any period of time.

(e) The board, when considering grant applications, shall give
preference to a trauma recovery center that conducts outreach to,
and serves, both of the following:

(1) Crime victims who typically are unable to access traditional
services, including, but not limited to, victims who are homeless,
chronically mentally ill, of diverse ethnicity, members of immigrant
and refugee groups, disabled, who have severe trauma-related
symptoms or complex psychological issues, or juvenile victims,
including minors who have had contact with the juvenile
dependency or justice system.

(2) Victims of a wide range of crimes, including, but not limited
to, victims of sexual assault, domestic violence, physical assault,
shooting, stabbing, and vehicular assault, and family members of
homicide victims.

(f) The trauma recovery center sites shall be selected by the
board through a well-defined selection process that takes into
account the rate of crime and geographic distribution to serve the
greatest number of victims.

(g) A trauma recovery center that is awarded a grant shall do
both of the following:

(1) Report to the board annually on how grant funds were spent,
how many clients were served (counting an individual client who
receives multiple services only once), units of service, staff
productivity, treatment outcomes, and patient flow throughout
both the clinical and evaluation components of service.

(2) In compliance with federal statutes and rules governing
federal matching funds for victims’ services, each center shall
submit any forms and data requested by the board to allow the
board to receive the 60 percent federal matching funds for eligible
victim services and allowable expenses.

(h) For purposes of this section, a trauma recovery center
provides, including, but not limited to, all of the following
resources, treatments, and recovery services to crime victims:

(1) Mental health services.

(2) Assertive community-based outreach and clinical case
management.

(3) Coordination of care among medical and mental health care
providers, law enforcement agencies, and other social services.

(4) Services to family members and loved ones of homicide
victims.

(5) A multidisciplinary staff of clinicians that includes
psychiatrists, psychologists, and social workers.

begin insert

begin insert SEC. 31. end insert   

end insert

begin insert Section 14740 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

14740.  

This chapter shall be known as the begin delete “State end delete begin insert State end insert Records
begin delete Management Act.” end delete begin insert Storage Act. end insert

begin insert

begin insert SEC. 32. end insert   

end insert

begin insert Section 14745 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

14745.  

The director shall establish and administer in the
executive branch of state government a records begin delete management
program, which end delete begin insert storage program that end insert will apply efficient and
economical begin delete management end delete begin insert records storage end insert methods to the begin delete creation, end delete
utilization, maintenance, retention, preservation, and disposal of
state records.

begin insert

begin insert SEC. 33. end insert   

end insert

begin insert Section 14746 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

14746.  

The duties of the director shall begin delete include end delete begin insert include, end insert but not
be limited to:

(a) Establishing standards, procedures, and techniques for
effective begin delete management end delete begin insert storage end insert of records.

(b) Providing appropriate protection for records designated by
state agencies, with the concurrence of the director, as essential to
the functioning of state government in the event of a major disaster.

(c) Obtaining from agencies reports required for the
administration of the program.

begin insert

(d) Establishing, maintaining, and operating record centers for
the storage, processing, and servicing of scheduled records for
state agencies pending their deposit with the State Archives or
their disposition in any other manner authorized by law.

end insert

begin insert

begin insert SEC. 34. end insert   

end insert

begin insert Article 3 (commencing with Section 14750) of Chapter
5 of Part 5.5 of Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert is
repealed. end insert

begin insert

begin insert SEC. 35. end insert   

end insert

begin insert Article 4 (commencing with Section 14755) of Chapter
5 of Part 5.5 of Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert is
repealed. end insert

begin insert

begin insert SEC. 36. end insert   

end insert

begin insert Article 6 (commencing with Section 14765) of Chapter
5 of Part 5.5 of Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert is
repealed. end insert

begin insert

begin insert SEC. 37. end insert   

end insert

begin insert Article 7 (commencing with Section 14769) of Chapter
5 of Part 5.5 of Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert is
repealed. end insert

begin insert

begin insert SEC. 38. end insert   

end insert

begin insert Chapter 7 (commencing with Section 15849.20) of
Part 10b of Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert is
repealed. end insert

begin insert

begin insert SEC. 39. end insert   

end insert

begin insert Section 16429.1 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

16429.1.  

(a) There is in trust in the custody of the Treasurer
the Local Agency Investment Fund, which fund is hereby created.
The Controller shall maintain a separate account for each
governmental unit having deposits in this fund.

(b) Notwithstanding any other begin delete provisions of end delete law, a local
governmental official, with the consent of the governing body of
that agency, having money in its treasury not required for
immediate needs, may remit the money to the Treasurer for deposit
in the Local Agency Investment Fund for the purpose of
investment.

(c) Notwithstanding any other begin delete provisions of end delete law, an officer of
any nonprofit corporation whose membership is confined to public
agencies or public officials, or an officer of a qualified
quasi-governmental agency, with the consent of the governing
body of that agency, having money in its treasury not required for
immediate needs, may remit the money to the Treasurer for deposit
in the Local Agency Investment Fund for the purpose of
investment.

(d) Notwithstanding any other begin delete provision of end delete law or begin insert provision end insert of
this section, a local agency, with the approval of its governing
body, may deposit in the Local Agency Investment Fund proceeds
of the issuance of bonds, notes, certificates of participation, or
other evidences of indebtedness of the agency pending expenditure
of the proceeds for the authorized purpose of their issuance. In
connection with these deposits of proceeds, the Local Agency
Investment Fund is authorized to receive and disburse moneys,
and to provide information, directly with or to an authorized officer
of a trustee or fiscal agent engaged by the local agency, the Local
Agency Investment Fund is authorized to hold investments in the
name and for the account of that trustee or fiscal agent, and the
Controller shall maintain a separate account for each deposit of
proceeds.

(e) The local governmental unit, the nonprofit corporation, or
the quasi-governmental agency has the exclusive determination
of the length of time its money will be on deposit with the
Treasurer.

(f) The trustee or fiscal agent of the local governmental unit has
the exclusive determination of the length of time proceeds from
the issuance of bonds will be on deposit with the Treasurer.

(g) The Local Investment Advisory Board shall determine those
quasi-governmental agencies which qualify to participate in the
Local Agency Investment Fund.

(h) The Treasurer may refuse to accept deposits into the fund
if, in the judgment of the Treasurer, the deposit would adversely
affect the state’s portfolio.

(i) The Treasurer may invest the money of the fund in securities
prescribed in Section 16430. The Treasurer may elect to have the
money of the fund invested through the Surplus Money Investment
Fund as provided in Article 4 (commencing with Section 16470)
of Chapter begin delete 3 of Part 2 of Division 4 of Title 2. end delete begin insert 3. end insert

(j) Money in the fund shall be invested to achieve the objective
of the fund which is to realize the maximum return consistent with
safe and prudent treasury management.

(k) All instruments of title of all investments of the fund shall
remain in the Treasurer’s vault or be held in safekeeping under
control of the Treasurer in any federal reserve bank, or any branch
thereof, or the Federal Home Loan Bank of San Francisco, with
any trust company, or the trust department of any state or national
bank.

(l) Immediately at the conclusion of each calendar quarter, all
interest earned and other increment derived from investments shall
be distributed by the Controller to the contributing governmental
units or trustees or fiscal agents, nonprofit corporations, and
quasi-governmental agencies in amounts directly proportionate to
the respective amounts deposited in the Local Agency Investment
Fund and the length of time the amounts remained therein. An
amount equal to the reasonable costs incurred in carrying out the
provisions of this section, not to exceed a maximum of 5 percent
of the earnings of this fund and not to exceed the amount
appropriated in the annual Budget Act for this function, shall be
deducted from the earnings prior to distribution. begin insert However, if the
13-week Daily Treasury Bill Rate, as published by the United
States Department of the Treasury on the last day of the state’s
fiscal year is below 1 percent, then the above-noted reasonable
costs shall not exceed a maximum of 8 percent of the earnings of
this fund for the subsequent fiscal year, shall not exceed the amount
appropriated in the annual Budget Act for this function, and shall
be deducted from the earnings prior to distribution. end insert The amount
of begin delete this end delete begin insert the end insert deduction shall be credited as reimbursements to the
state agencies, including the Treasurer, the Controller, and the
Department of Finance, having incurred costs in carrying out the
provisions of this section.

(m) The Treasurer shall prepare for distribution a monthly report
of investments made during the preceding month.

(n) As used in this section, “local agency,” “local governmental
unit,” and “local governmental official” includes a campus or other
unit and an official, respectively, of the California State University
who deposits moneys in funds described in Sections 89721, 89722,
and 89725 of the Education Code.

begin insert

begin insert SEC. 40. end insert   

end insert

begin insert Section 16731.6 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

16731.6.  

(a) Notwithstanding any other provision of this
chapter, and as an alternative to the procedures set forth in Section
16731, the committee may provide for the issuance of all or part
of the bonds authorized to be issued as commercial paper notes.
The committee shall adopt a resolution finding that issuance of
the bonds in the form of commercial paper notes is necessary and
desirable, directing the Treasurer to arrange for preparation of the
requisite number of suitable notes, and specifying other provisions
relating to the commercial paper notes, including all of the
following:

(1) For each program of commercial paper notes authorized,
the resolution shall contain the final date of maturity and the total
aggregate principal amount of the commercial paper notes
authorized to be outstanding at any one time up to the maturity
date, in accordance with all of the following:

(A) The resolution may provide that the commercial paper notes
may be issued and renewed from time to time until the final
maturity date, and that the amount issued from time to time may
be set by the Treasurer up to the maximum amount authorized to
be outstanding at any one time.

(B) The resolution shall include methods of setting the dates,
numbers, and denominations of the commercial paper notes.

(C) The determination of the final maturity date and total amount
by the committee shall be made upon recommendation of the
Treasurer to meet the needs of the state for funds, to provide the
maximum benefit to potential purchasers, and to respond to the
expected demand for the commercial paper notes.

(D) Notwithstanding any other provision of this chapter,
whenever the committee determines to issue commercial paper
notes, the committee is not required to comply with the
requirements of Section 16732.

(2) The method of setting the interest rates and interest payment
dates applicable to the commercial paper notes, in accordance with
the following:

(A) Commercial paper notes may bear a stated rate of interest
payable only at maturity, which rate or rates may be determined
at the time of sale of each unit of commercial paper notes.

(B) The rate of interest borne by the commercial paper notes
shall not exceed 11 percent per annum.

(C) Notwithstanding any other provision of this chapter,
whenever the committee determines to issue commercial paper
notes, the committee is not required to comply with the
requirements of Section 16733.

(3) Any provisions for the redemption of the commercial paper
notes prior to stated maturity.

(4) The technical form and language of the commercial paper
notes.

(5) All other terms and conditions of the commercial paper notes
and of their execution, issuance, and sale, deemed necessary and
appropriate by the committee.

(b) Notwithstanding any other provision of this chapter, when
the committee determines to issue commercial paper notes, all of
the following shall apply:

(1) The commercial paper notes may be sold at negotiated sale
at a price below the par value in a manner consistent with paragraph
(2) of subdivision (a).

(2) During the term of any program of commercial paper notes,
the renewal and reissuance from time to time of the commercial
paper notes in an amount up to the maximum amount authorized
by the resolution shall be deemed to be a refunding of the
previously maturing amount, permitted by and consistent with
Article 6 (commencing with Section 16780).

(3) Consistent with the intent for the General Fund to realize a
savings in debt service costs when commercial paper notes are
issued in place of bonds without shifting or adding financing and
debt service costs to the bond funds, the state administrative costs
of commercial paper and interest payable and other costs associated
with commercial paper notes shall be paid for as follows:

(A) The proceeds of commercial paper notes are,
notwithstanding Section 13340, continuously appropriated to pay
the state administrative costs of commercial paper including, but
not limited to, costs of the Treasurer’s office, the Controller’s
office, and the Department of Finance.

(B)  begin delete The end delete begin insert An amount necessary to pay the end insert interest payable on
maturing commercial paper begin delete notes and other costs associated with
commercial paper notes not specified in subparagraph (A),
including, but not limited to, remarketing fees, issuing and paying
agent fees, the letter or line of credit provider fees, the rating
agency fees, and bond counsel fees, shall be paid from the General
Fund which, end delete begin insert notes, up to the maximum rate authorized by law, is, end insert
notwithstanding Section 13340, begin delete is end delete continuously appropriated begin insert from
the General Fund end insert to pay the begin delete interests and costs. end delete begin insert interest. end insert

begin insert

(C) Notwithstanding Section 13340, there is continuously
appropriated from the General Fund, an amount necessary to pay
the costs associated with commercial paper notes that are not
described in subparagraph (A), including, but not limited to, both
of the following:

end insert begin insert

(i) Fees, costs, indemnities, and other similar expenses incurred
under or in connection with agreements to purchase commercial
paper notes, including, but not limited to, letters or lines of credit,
not to exceed annually for each agreement 3 percent of the
maximum principal amount of commercial paper notes that could
be purchased and outstanding at any one time pursuant to an
agreement.

end insert begin insert

(ii) All other costs, including, but not limited to, remarketing
and dealer fees, issuing and paying agent fees, rating agency fees,
and bond counsel fees, in an annual amount not to exceed 0.25
percent of the highest sum at any time during that year of the
maximum principal amount of commercial paper notes authorized
by all resolutions.

end insert

begin insert

begin insert SEC. 41. end insert   

end insert

begin insert Section 17090 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17090.  

Whenever any warrant lawfully drawn by the Controller
is lost or destroyed before it is paid by the Treasurer, the owner
or custodian may, prior to the time the warrant becomes void,
procure the issuance of a begin delete duplicate end delete begin insert replacement end insert warrant upon
compliance with this article.

begin insert

begin insert SEC. 42. end insert   

end insert

begin insert Section 17091 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17091.  

Application for a begin delete duplicate end delete begin insert replacement end insert warrant shall
be made by filing with the Controller:

(a) An affidavit setting forth the fact of its loss or destruction,
giving the number, date, amount, and name of the payee, together
with all material facts relative to the loss or destruction.

(b) An agreement to indemnify and hold harmless the state, its
begin delete officers end delete begin insert officers, end insert and employees, from any loss resulting from the
issuance of the begin delete duplicate end delete begin insert replacement end insert warrant.

No indemnity agreement shall be required: (1) when the payee
is the United States Government, a state of the United States, any
agency, instrumentality or officer of the United States Government
or of a state, or any county, city, city and county, town, district,
or other political subdivision of a state, or any officer thereof; or
(2) when the owner or custodian is the State of California or any
agency or officer thereof.

The Controller need not require an indemnity agreement if the
Controller determines that it is in the best interest of the state and
that the state is adequately protected without an agreement.

begin insert

begin insert SEC. 43. end insert   

end insert

begin insert Section 17093 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17093.  

If the application is approved, the Controller shall issue
and deliver to the applicant, on demand, a begin delete duplicate end delete begin insert replacement end insert
warrant for the full amount of the original warrant. When the
Controller issues the begin delete duplicate, end delete begin insert replacement, end insert he begin insert or she end insert shall notify
the Treasurer that a begin delete duplicate end delete begin insert replacement end insert warrant has been issued
and identify the warrant.

begin insert

begin insert SEC. 44. end insert   

end insert

begin insert Section 17094 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17094.  

The Controller shall make the proper entries on his
books, showing the lost or destroyed warrants, and the issuance
of begin delete duplicate end delete begin insert replacement end insert warrants in lieu thereof.

begin insert

begin insert SEC. 45. end insert   

end insert

begin insert Section 17095 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17095.  

The Treasurer shall pay begin delete such a duplicate end delete begin insert a replacement end insert
warrant as though it were the original.

begin insert

begin insert SEC. 46. end insert   

end insert

begin insert Section 17096 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17096.  

A begin delete duplicate end delete begin insert replacement end insert warrant is void if not presented
to the Treasurer for payment within the same time limit provided
by law for the original warrant.

begin insert

begin insert SEC. 47. end insert   

end insert

begin insert Section 17097 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17097.  

Any loss incurred in connection with the issuance of a
begin delete duplicate end delete begin insert replacement end insert warrant shall be charged against the account
from which the payment was derived.

begin insert

begin insert SEC. 48. end insert   

end insert

begin insert Section 17617 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

17617.  

The total amount due to each city, county, city and
county, and special district, for which the state has determined that
reimbursement is required under paragraph (2) of subdivision (b)
of Section 6 of Article XIII B of the California Constitution, shall
be appropriated for payment to these entities over a period of not
more than 15 years, commencing with the Budget Act for the
2006-07 fiscal year and concluding with the Budget Act for the
2020-21 fiscal year. There shall be no appropriation for payment
of reimbursement claims submitted pursuant to this section for the
begin delete 2012-13, 2013-14, and 2014-15 end delete begin insert 2012-13 and 2013- end insert begin insert 14 end insert fiscal
years.

begin insert

begin insert SEC. 49. end insert   

end insert

begin insert Section 20035.11 is added to the end insert begin insert Government Code end insert begin insert , end insert immediately following Section 20035.10 begin insert , to read: end insert

begin insert

begin insert 20035.11. end insert   

(a) For purposes of this section, “pay letter” means
the set of instructions issued by the Department of Human
Resources to the Controller and other state agencies of approved
changes to civil service pay scales that affect a supervisor or
manager of State Bargaining Unit 9 or State Bargaining Unit 10
whose monthly salary is increased effective July 1, 2014, pursuant
to this pay letter.

(b) A supervisor or manager of State Bargaining Unit 9 or State
Bargaining Unit 10 to whom the pay letter applies and who retires
or dies on or after July 1, 2014, shall, for purposes of determining
any pension or benefit, have his or her final compensation pursuant
to Section 7522.32, 20035, 20035.9, 20035.10, 20037, 20037.11,
or 20037.15, modified as described in this section. Any salary
increase as provided in the pay letter that exceeds 5 percent shall
not be included in final pensionable compensation or compensation
earnable for the member, except as follows:

(1) For July 1, 2014, to June 30, 2015, inclusive, only that
portion of the salary increase representing up to 33 1⁄3 percent of
the excess salary increase identified in the pay letter shall be
recognized for purposes of determining his or her compensation
earnable or pensionable compensation during the fiscal year
period.

(2) For July 1, 2015, to June 30, 2016, inclusive, only that
portion of the salary increase representing up to 66 2⁄3 percent of
the excess salary increase identified in the pay letter shall be
recognized for purposes of determining his or her compensation
earnable or pensionable compensation during the fiscal year
period.

(3) On and after July 1, 2016, the entire pay increase identified
in the pay letter shall be recognized for purposes of determining
his or her compensation earnable or pensionable compensation
for service performed on or after that date.

(c) A supervisor or manager of State Bargaining Unit 9 or State
Bargaining Unit 10 shall pay employee retirement contributions
on the full amount of the salary increase provided pursuant to the
pay letter. A member that has his or her final compensation
modified pursuant to subdivision (b) shall not be eligible for any
refund of his or her employee retirement contributions associated
with that salary increase unless he or she elects a full refund of
his or her retirement contributions and ceases to be a member of
the system.

(d) The increased costs, if any, that result from the
administration of this section shall be paid by the employer.

(e) The Department of Human Resources shall identify the job
classifications receiving salary increases in the pay letter. The
Department of Human Resources and any department that employs
the affected managers and supervisors shall provide the system
and the Controller, upon request, any information necessary to
implement this section. The Controller shall provide the system,
upon request, any information necessary to implement this section.

end insert

begin insert

begin insert SEC. 50. end insert   

end insert

begin insert Section 22802 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

22802.  

(a) An annuitant whose retirement allowance is not
sufficient to pay his or her required contribution for the health
benefit plan in which he or she is enrolled may only remain
enrolled if the annuitant pays to the board the balance of the
contributions plus the related administrative costs, as determined
by the board.

(b) (1) The annuitant shall pay the complementary annuitant
premium by remitting to the board quarterly payments in advance,
or by alternative monthly payment as determined by the board.

(2) The board may charge each annuitant who elects to pay the
complementary annuitant premium an initial setup charge and a
monthly maintenance charge, in amounts sufficient to ensure the
ongoing support of the complementary annuitant premium program.

(3) If payments are not received by the 10th of the month for
the following month, coverage shall be terminated and may not
be resumed until the next open enrollment period.

(c) Upon receipt of a written application, the benefits provided
by this section shall commence on the first day of the month
following receipt of the application and the payment required by
the board.

(d) The board has no duty to identify, locate, or notify any
annuitant who may be eligible for the benefit provided by this
section.

(e) Any complementary annuitant premium or any balance of
unpaid health benefit plan premiums that accrues and remains
unpaid at the time of the death of an annuitant shall be paid in
accordance with the sequence prescribed in Section 21506.

(f) All moneys received pursuant to this section shall be
deposited in the Public Employees’ Contingency Reserve Fund in
the account provided by subdivision begin delete (e) end delete begin insert (f) end insert of Section 22910.

begin insert

begin insert SEC. 51. end insert   

end insert

begin insert Section 22910 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

22910.  

(a) There shall be maintained in the State Treasury the
Public Employees’ Contingency Reserve Fund. The board may
invest funds in the Public Employees’ Contingency Reserve Fund
in accordance with the provisions of law governing its investment
of the retirement fund.

(b) (1) An account shall be maintained within the Public
Employees’ Contingency Reserve Fund with respect to the health
benefit plans the board has approved or that have entered into a
contract with the board. The account shall be credited, from time
to time and in amounts as determined by the board, with moneys
contributed under Section 22885 or 22901 to provide an adequate
contingency reserve. The income derived from any dividends, rate
adjustments, or other funds received from a health benefit plan
shall be credited to the account. The board may deposit, in the
same manner as provided in paragraph (4), up to one-half of 1
percent of premiums in the account for purposes of cost
containment programs, subject to approval as provided in paragraph
(2) of subdivision (c).

(2) The account for health benefit plans may be utilized to defray
increases in future rates, to reduce the contributions of employees
and annuitants and employers, to implement cost containment
programs, or to increase the benefits provided by a health benefit
plan, as determined by the board. The board may use penalties and
interest deposited pursuant to subdivision (c) of Section 22899 to
pay any difference between the adjusted rate set by the board
pursuant to Section 22864 and the applicable health benefit plan
contract rates.

(3) The total credited to the account for health benefit plans at
any time shall be limited, in the manner and to the extent the board
may find to be most practical, to a maximum of 10 percent of the
total of the contributions of the employers and employees and
annuitants in any fiscal year. The board may undertake any action
to ensure that the maximum amount prescribed for the fund is
approximately maintained.

(4) Board rules and regulations adopted pursuant to Section
22831 to minimize the impact of adverse selection or contracts
entered into pursuant to Section 22864 to implement health benefit
plan performance incentives may provide for deposit in and
disbursement to carriers or to Medicare from the account the
portion of the contributions otherwise payable directly to the
carriers by the Controller under Section 22913 as may be required
for that purpose. The deposits shall not be included in applying
the limitations, prescribed in paragraph (3), on total amounts that
may be deposited in or credited to the fund.

(5) Notwithstanding Section 13340, all moneys in the account
for health benefit plans are continuously appropriated without
regard to fiscal year for the purposes provided in this subdivision.

(c) (1) An account shall also be maintained in the Public
Employees’ Contingency Reserve Fund for administrative expenses
consisting of funds deposited for this purpose pursuant to Sections
22885 and 22901.

(2) The moneys deposited pursuant to Sections 22885 and 22901
in the Public Employees’ Contingency Reserve Fund may be
expended by the board for administrative purposes, provided that
the expenditure is approved by the Department of Finance and the
Joint Legislative Budget Committee in the manner provided in the
Budget Act for obtaining authorization to expend at rates requiring
a deficiency appropriation, regardless of whether the expenses
were anticipated.

begin insert

(d) An account shall be maintained in the Public Employees’
Contingency Reserve Fund for the contributions required pursuant
to Section 22870. Notwithstanding Section 13340, the funds are
continuously appropriated, without regard to fiscal year, for the
payment of premiums or other charges to carriers or the Public
Employees’ Health Care Fund. This subdivision shall not apply
to state administrative costs, which shall continue to be subject to
Section 13340.

end insert begin delete

(d)

end delete

begin insert (e) end insert  An account shall be maintained in the Public Employees’
Contingency Reserve Fund for begin delete health plan premiums paid by
contracting agencies, including end delete begin insert the contributions required pursuant
to Section 22890 and for end insert payments made pursuant to subdivision
(f) of Section 22850. Notwithstanding Section 13340, the funds
are continuously appropriated, without regard to fiscal year, for
the payment of premiums or other charges to carriers or the Public
Employees’ Health Care Fund. Penalties and interest paid pursuant
to subdivision (c) of Section 22899 shall be deposited in the
account pursuant to paragraphs (1) and (2) of subdivision (b).

begin delete

(e)

end delete

begin insert (f) end insert  Accounts shall be maintained in the Public Employees’
Contingency Reserve Fund for complementary annuitant premiums
and related administrative expenses paid by annuitants pursuant
to Section 22802. Notwithstanding Section 13340, the funds are
continuously appropriated, without regard to fiscal year, to
reimburse the Public Employees’ Retirement Fund, the Judges’
Retirement Fund, the Judges’ Retirement Fund II, and the
Legislators’ Retirement Fund, as applicable, for payment of
annuitant health premiums, and for the payment of premiums and
other charges to carriers or to the Public Employees’ Health Care
Fund. Administrative expenses deposited in this account shall be
credited to the account provided by subdivision (c).

begin delete

(f)

end delete

begin insert (g) end insert  Amounts received by the board for retiree drug subsidy
payments that are attributed to contracting agencies and their
annuitants and employees pursuant to subdivision (c) of Section
22910.5 shall be deposited in the Public Employees’ Contingency
Reserve Fund. Notwithstanding Section 13340, these amounts are
continuously appropriated, without regard to fiscal year, for the
payment of premiums, costs, contributions, or other benefits related
to contracting agencies and their employees and annuitants, and
as consistent with the Medicare Prescription Drug Improvement
and Modernization Act, as amended.

begin delete

(g)

end delete

begin insert (h) end insert  The Account for Retiree Drug Subsidy Payments is hereby
established in the Public Employees’ Contingency Reserve Fund
and funds in that account shall, upon appropriation by the
Legislature, be used for the purposes described in Section 22910.5.

begin delete

(h)

end delete

begin insert (i) end insert  Notwithstanding any other law, the Controller may use the
moneys in the Public Employees’ Contingency Reserve Fund for
loans to the General Fund as provided in Sections 16310 and
16381. However, interest shall be paid on all moneys loaned to
the General Fund from the Public Employees’ Contingency Reserve
Fund. Interest payable shall be computed at a rate determined by
the Pooled Money Investment Board to be the current earning rate
of the fund from which loaned. This subdivision does not authorize
any transfer that will interfere with the carrying out of the object
for which the Public Employees’ Contingency Reserve Fund was
created.

begin insert

begin insert SEC. 52. end insert   

end insert

begin insert Section 22910.5 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

22910.5.  

(a) For purposes of this section, the following
definitions shall apply:

(1) “Local annuitant” means an annuitant other than a state
annuitant.

(2) “Local employee” means an employee other than a state
employee.

(3) “Retiree drug subsidy” means those amounts described in
Section 423.886 of Title 42 of the Code of Federal Regulations.

(4) “State annuitant” means an annuitant who is retired from
service with the state, including the California State University.

(5) “State employee” means an employee who is in the
employment of the state, including the California State University.

(b) For purposes of applying for and receiving funds as part of
a retiree drug subsidy, the board is designated as the sponsor of a
qualified retiree prescription drug plan for a state or contracting
agency plan, or a related plan, or an individual if both of the
following apply:

(1) The system applies for a retiree drug subsidy related to the
plan or individual.

(2) The system meets the definition of a plan sponsor as
described in Section 1395w-132(c) of Title 42 of the United States
Code.

(c) When the board performs the duties described in subdivision
(b) related to, or applies for funds attributable to, a retiree drug
subsidy for a contracting agency plan, local annuitant, or local
employee, the board shall take all necessary steps to ensure that
any funds received by the board shall be deposited in the Public
Employees’ Contingency Reserve Fund as described in subdivision
begin delete (f) end delete begin insert (g) end insert of Section 22910.

(d) When the board performs the duties described in subdivision
(b) related to, or applies for funds attributable to, a retiree drug
subsidy for a state plan, state annuitant, state employee, or state
employee association health benefit plan, the board shall take all
necessary steps to deposit these funds in the Account for Retiree
Drug Subsidy Payments as described in subdivision begin delete (g) end delete begin insert (h) end insert of
Section 22910.

(e) Notwithstanding any other law, all funds received by the
board as a result of a retiree drug subsidy application attributable
to a state employee or state annuitant, or the eligible dependent,
beneficiary, or similarly situated person of that state employee or
state annuitant, shall be deposited in the Account for Retiree Drug
Subsidy Payments, as described in subdivision begin delete (g) end delete begin insert (h) end insert of Section
22910.

(f) Notwithstanding any other law, funds from the Account for
Retiree Drug Subsidy Payments that is maintained in the Public
Employees’ Contingency Reserve Fund shall be appropriated by
the Legislature in the annual Budget Act for the purposes described
in this section. The Legislature shall, in the annual Budget Act,
specify how these funds are to be used, consistent with the federal
Medicare Prescription Drug Improvement and Modernization Act,
as amended, including the following purposes:

(1) Reducing the contributions by the state from the General
Fund or other funds in the State Treasury for health benefits that
include prescription drug benefits for state annuitants.

(2) Reducing contributions by state annuitants for their health
benefits that include prescription drug benefits.

(3) Defraying increases in future employer or state annuitant
health benefit or prescription drug rates.

(4) Implementing cost containment programs related to state
annuitant health benefits that include prescription drug benefits.

(5) Increasing state annuitant health benefits or prescription
drug benefits.

begin insert

begin insert SEC. 53. end insert   

end insert

begin insert Section 22913 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

begin delete

22913.  

(a) Contributions of employees, annuitants, and
employers not credited to the Public Employees’ Contingency
Reserve Fund for purposes specified in Section 22885 or 22901
shall be utilized to pay the premiums or other charges to carriers
or to the Public Employees’ Health Care Fund.

(b)

end delete

begin insert

begin insert 22913. end insert   

end insert

begin insert (a) end insert  The Controller shall suitably identify and remit the
state’s contribution for each employee or annuitant monthly to the
Public Employees’ begin delete Health Care Fund or to the carriers, end delete
begin insert Contingency Reserve Fund, end insert together with amounts authorized by
the employees and annuitants to be deducted from their salaries
or retirement allowances for payment of the employee contribution.

begin delete

(c)

end delete

begin insert (b) end insert  The contributions of employees and annuitants of contracting
agencies and the contributions of contracting agency employers
shall be suitably identified and remitted monthly to the begin delete carriers end delete
begin insert Public Employees’ Contingency Reserve Fund end insert by warrant of the
Controller upon claims filed by the board.

begin insert

begin insert SEC. 54. end insert   

end insert

begin insert Section 26915 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

26915.  

(a) Any requirement that an audit be performed by the
county auditor may, at the election of the board of supervisors,
also be performed by a county employee or officer who meets both
of the following qualifications:

(1) The person possesses a valid certificate issued by the
California Board of Accountancy and a permit authorizing the
person to practice as a certified public accountant or as a public
accountant.

(2) The employee or officer is independent in accordance with
Rule 101 of the American Institute of Certified Public Accountants’
Code of Professional Conduct.

(b) The election made by the board of supervisors pursuant to
subdivision (a) may be in effect for no more than two years after
the date that the vote is taken by the board, but the election may
be renewed upon expiration.

(c) This section shall only be applicable in the County of Orange.

(d) Nothing in this section is intended to preclude a county
auditor from performing his or her statutorily prescribed duties.

end delete

begin insert

begin insert SEC. 55. end insert   

end insert

begin insert Section 50661 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

50661.  

(a)  There is hereby created in the State Treasury the
Housing Rehabilitation Loan Fund. All interest or other increments
resulting from the investment of moneys in the Housing
Rehabilitation Loan Fund shall be deposited in the fund,
notwithstanding Section 16305.7 of the Government Code.
Notwithstanding Section 13340 of the Government Code, all
money in the fund is continuously appropriated to the department
for the following purposes:

(1)  For making deferred-payment rehabilitation loans for
financing all or a portion of the cost of rehabilitating existing
housing to meet rehabilitation standards as provided in this chapter.

(2)  For making deferred payment loans as provided in Sections
50668.5, 50669, and 50670.

(3)  For making deferred payment loans pursuant to Sections
50662.5 and 50671.

(4)  Subject to the restrictions of Section 53131, if applicable,
for administrative expenses of the department made pursuant to
this chapter, Article 3 (commencing with Section 50693) of Chapter
7.5, and Chapter 10 (commencing with Section 50775).

(5)  For related administrative costs of nonprofit corporations
and local public entities contracting with the department pursuant
to Section 50663 in an amount, if any, as determined by the
department, to enable the entities and corporations to implement
a program pursuant to this chapter. The department shall ensure
that not less than 20 percent of the funds loaned pursuant to this
chapter shall be allocated to rural areas. For purposes of this chapter
“rural area” shall have the same meaning as in Section 50199.21.

(b)  There shall be paid into the fund the following:

(1)  Any moneys appropriated and made available by the
Legislature for purposes of the fund.

(2)  Any moneys that the department receives in repayment of
loans made from the fund, including any interest thereon.

(3)  Any other moneys that may be made available to the
department for the purposes of this chapter from any other source
or sources.

(4)  Moneys transferred or deposited to the fund pursuant to
Sections 50661.5 and 50778.

(c)  Notwithstanding any other provision of law, any interest or
other increment earned by the investment or deposit of moneys
appropriated by subdivision (b) of Section 3 of Chapter 2 of the
Statutes of the 1987-88 First Extraordinary Session, or Section 7
of Chapter 4 of the Statutes of the 1987-88 First Extraordinary
Session, shall be deposited in a special account in the Housing
Rehabilitation Loan Fund and shall be used exclusively for
purposes of Sections 50662.5 and 50671.

(d)  Notwithstanding any other provision of law, effective with
the date of the act adding this subdivision, appropriations
authorized by the Budget Act of 1996 for support of the
Department of Housing and Community Development from the
California Disaster Housing Repair Fund and the California
Homeownership Assistance Fund shall instead be authorized for
expenditure from the Housing Rehabilitation Loan Fund.

begin insert

(e) Effective July 1, 2014, the California Housing Trust Fund
in the State Treasury is abolished and any remaining balance,
assets, liabilities, and encumbrances shall be transferred to, and
become part of, the Housing Rehabilitation Loan Fund.
Notwithstanding Section 13340 of the Government Code, all
transferred amounts are continuously appropriated to the
department for the purpose of satisfying any liabilities and
encumbrances and the purposes specified in this section.

end insert

begin insert

begin insert SEC. 56. end insert   

end insert

begin insert Section 50840 of the end insert begin insert Health and Safety Code end insert begin insert is
repealed. end insert

begin delete

50840.  

(a)  The Legislature hereby finds and declares all of
the following:

(1)  California is experiencing a severe housing shortage that
compounds itself further each year. While it is estimated that
250,000 new homes are needed each year to keep up with demand,
only 140,000 building permits for new residential housing were
issued in 1999. Moreover, the average number of residential
building permits issued over the last seven years is only 105,000
new units per year.

(2)  The shortage in housing supply has led to skyrocketing
home sale and rental prices, which have made housing unaffordable
to many Californians. Seven of the nation’s 10 least affordable
metropolitan areas for housing are in California. More than 35
percent of renter households experience an extreme housing cost
burden, which has been defined as paying more than 50 percent
of their income for housing.

(3)  Long-term strategies are needed to address this ongoing
deficit in new home production and to meet the state’s housing
needs.

(4)  In addition to helping meet the immediate need for housing,
the state will always have a role to play in assisting in the provision
of housing for families unable to afford market-rate rents.

(5)  A permanent source of financing is needed to fulfill this
ongoing need for state housing assistance.

(6)  A housing trust fund would provide a permanent source of
financing to be used solely to fund housing programs that serve
low- and very low income households.

(b)  (1)  It is the intent of the Legislature that the principal in
the California Housing Trust Fund shall not be spent, but rather
invested as an endowment, and that the return on this investment
be used to fund programs that meet the housing needs of lower
and very low income households.

(2)  It is the intent of the Legislature to make a significant
appropriation to the California Housing Trust Fund in the 2001-02
fiscal year to ensure that there are sufficient ongoing resources to
provide for the housing needs of lower income households.

end delete

begin insert

begin insert SEC. 57. end insert   

end insert

begin insert Section 50841 of the end insert begin insert Health and Safety Code end insert begin insert is
repealed. end insert

begin delete

50841.  

(a)  There is hereby created in the State Treasury the
California Housing Trust Fund. Notwithstanding Section 13340
of the Government Code, all money in the fund is continuously
appropriated for the purposes of investment in a manner calculated
to deliver the greatest rate of return consistent with the
requirements of Section 16430 of the Government Code.

(b)  All interest or other increment resulting from investment
or deposit of moneys in the fund shall be deposited in the fund,
notwithstanding Section 16305.7 of the Government Code. Except
as provided in Section 50842, no money in the fund shall be spent,
loaned, transferred, or otherwise removed from the fund.

end delete

begin insert

begin insert SEC. 58. end insert   

end insert

begin insert Section 50842 of the end insert begin insert Health and Safety Code end insert begin insert is
repealed. end insert

begin delete

50842.  

(a)  All interest or other increment resulting from any
investment of money in the California Housing Trust Fund may
only be expended, upon appropriation by the Legislature, after
allocation to the Treasurer of an amount not to exceed one-half of
1 percent of any interest and other increment to cover the actual
cost of administering those investments, for housing programs or
those portions of housing programs authorized by law that serve
lower and very low income households, as defined in Sections
50079.5 and 50105, respectively.

(b)  Not less than 20 percent of any interest or other increment
appropriated by the Legislature in any fiscal year from the
California Housing Trust Fund shall be expended in rural areas,
as defined by Section 50199.21.

(c)  Any interest or other increment not appropriated by the
Legislature for the purpose described in subdivision (a) in the fiscal
year succeeding its accrual shall be deposited in the California
Housing Trust Fund and shall no longer be deemed interest or
other increment for the purposes of this section.

end delete

begin insert

begin insert SEC. 59. end insert   

end insert

begin insert Section 51452 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

51452.  

(a)  The School Facilities Fee Assistance Fund is hereby
established in the State Treasury and, notwithstanding Section
13340 of the Government Code, all money in the fund is
continuously appropriated to the Department of General Services
for the purposes of this chapter. All repayments of disbursed funds
pursuant to this chapter or any interest earned from the investment
in the Surplus Money Investment Fund or any other moneys
accruing to the fund from whatever source shall be returned to the
fund and are available for allocation by the California Housing
Finance Agency to programs established pursuant to this chapter.

(b)  The following amounts are hereby appropriated from the
General Fund to the School Facilities Fee Assistance Fund for
administrative costs and to make payments to purchasers of newly
constructed residential structures and housing sponsors of housing
developments pursuant to this chapter from that fund by fiscal year
as follows:

(1)  Twenty million dollars ($20,000,000) in the 1998-99 fiscal
year.

(2)  Forty million dollars ($40,000,000) in the 1999-2000 fiscal
year.

(3)  Forty million dollars ($40,000,000) in the 2000-01 fiscal
year.

(4)  Forty million dollars ($40,000,000) in the 2001-02 fiscal
year.

(c)  The funds shall be distributed to each program in proportion
to the original total amounts available for each program as follows:

(1)  Twenty-eight million dollars ($28,000,000) shall be
available for the program set forth in paragraph (1) of subdivision
(a) of Section 51451, except that any funds not expended within
18 months of their appropriation and availability may also be
available for programs set forth in paragraphs (2) and (3) of
subdivision (a) of Section 51451.

(2)  Twenty-eight million dollars ($28,000,000) shall be
available for the program set forth in paragraph (2) of subdivision
(a) of Section 51451, except that any funds not expended within
18 months of their appropriation and availability may also be
available for the program set forth in paragraph (3) of subdivision
(a) of Section 51451.

(3)  Fifty-two million dollars ($52,000,000) shall be available
for the program set forth in paragraph (3) of subdivision (a) of
Section 51451.

(4)  Fifty-two million dollars ($52,000,000) shall be available
for the program set forth in subdivision (b) of Section 51451.

(d)  Reservations received on or after January 1, 2002, for
participation in the programs authorized by Section 51451 shall
not be honored by the California Housing Finance Agency. As of
that date, any unobligated amounts remaining in the School
Facilities Fee Assistance Fund after the transfer made pursuant to
Item 1760-115-0101 of Section 2.00 of the Budget Act of 2001
(Chapter 106 of the Statutes of 2001) shall be transferred to the
General Fund.

begin delete

(e)  Any right to receive repayments of assistance provided for
by Section 51451 shall be an asset of the School Facilities Fee
Assistance Fund. Any assistance provided for by Section 51451
that is reserved but not ultimately paid, or is repaid to the California
Housing Finance Agency, shall be remitted to the Department of
General Services for deposit into the General Fund.

end delete begin insert

(e) Effective July 1, 2014, the School Facilities Fee Assistance
Fund in the State Treasury is abolished and any remaining balance,
assets, liabilities, and encumberances in the fund as of July 1,
2014, are transferred to the Housing Rehabilitation Loan Fund.
Notwithstanding Section 13340 of the Government Code, all
transferred amounts are continuously appropriated to the
department for the purpose of satisfying any liabilities and
encumbrances and the purposes specified in this section.

end insert

begin insert

begin insert SEC. 60. end insert   

end insert

begin insert Section 53545 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

53545.  

The Housing and Emergency Shelter Trust Fund of
2006 is hereby created in the State Treasury. The Legislature
intends that the proceeds of bonds deposited in the fund shall be
used to fund the housing-related programs described in this chapter
over the course of the next decade. The proceeds of bonds issued
and sold pursuant to this part for the purposes specified in this
chapter shall be allocated in the following manner:

(a) (1) One billion five hundred million dollars ($1,500,000,000)
to be deposited in the Affordable Housing Account, which is
hereby created in the fund. Notwithstanding Section 13340 of the
Government Code, the money in the account shall be continuously
appropriated in accordance with the following schedule:

(A) (i) Three hundred forty-five million dollars ($345,000,000)
shall be transferred to the Housing Rehabilitation Loan Fund to
be expended for the Multifamily Housing Program authorized by
Chapter 6.7 (commencing with Section 50675) of Part 2. The
priorities specified in Section 50675.13 shall apply to the
expenditure of funds pursuant to this clause.

(ii) Fifty million dollars ($50,000,000) shall be transferred to
the Housing Rehabilitation Loan Fund to be expended under the
Multifamily Housing Program authorized by Chapter 6.7
(commencing with Section 50675) of Part 2 for housing meeting
the definitions in paragraphs (2) and (3) of subdivision (e) of
Section 11139.3 of the Government Code. The department may
provide higher per-unit loan limits as necessary to achieve
affordable housing costs to the target population. Any funds not
encumbered for the purposes of this clause by July 31, 2011, shall
revert for general use in the Multifamily Housing Program unless
the department determines that funds should revert sooner due to
diminished demand.

(B) One hundred ninety-five million dollars ($195,000,000)
shall be transferred to the Housing Rehabilitation Loan Fund to
be expended for the Multifamily Housing Program authorized by
Chapter 6.7 (commencing with Section 50675) of Part 2, to be
used for supportive housing for individuals and households moving
from emergency shelters or transitional housing or those at risk of
homelessness. The Department of Housing and Community
Development shall provide for higher per-unit loan limits as
reasonably necessary to achieve housing costs affordable to those
individuals and households. For purposes of this subparagraph,
“supportive housing” means housing with no limit on length of
stay, that is occupied by the target population, as defined in
subdivision (d) of Section 53260, and that is linked to onsite or
offsite services that assist the tenant to retain the housing, improve
his or her health status, maximize his or her ability to live, and,
when possible, work in the community. The criteria for selecting
projects shall give priority to:

(i) Supportive housing for people with disabilities who would
otherwise be at high risk of homelessness where the applications
represent collaboration with programs that meet the needs of the
person’s disabilities.

(ii) Projects that demonstrate funding commitments from local
governments for operating subsidies or services funding, or both,
for five years or longer.

(C) One hundred thirty-five million dollars ($135,000,000) shall
be transferred to the fund created by subdivision (b) of Section
50517.5 to be expended for the programs authorized by Chapter
3.2 (commencing with Section 50517.5) of Part 2. begin insert The Department
of Housing and Community Development shall be deemed an
eligible recipient for the purposes of reconstructing and
rehabilitating migrant centers operated through the Office of
Migrant Services pursuant to Chapter 8.5 (commencing with
Section 50710) of Part 2 that are in need of significant repairs or
rehabilitation to ensure the health and safety of residents, and
shall not be subject to any of the recipient requirements of Chapter
3.2 (commencing with Section 50517.5) of Part 2. To the extent
no other funding sources are available, the department may directly
expend up to eleven million dollars ($11,000,000) for purposes of
reconstructing and rehabilitating migrant centers. end insert

(D) Three hundred million dollars ($300,000,000) shall be
transferred to the Self-Help Housing Fund created by Section
50697.1. These funds shall be available to the Department of
Housing and Community Development, to be expended for the
purposes of enabling households to become or remain homeowners
pursuant to the CalHome Program authorized by Chapter 6
(commencing with Section 50650) of Part 2, except ten million
dollars ($10,000,000) shall be expended for construction
management under the California Self-Help Housing Program
pursuant to subdivision (b) of Section 50696.

(E) Two hundred million dollars ($200,000,000) shall be
transferred to the Self-Help Housing Fund created by Section
50697.1. These funds shall be available to the California Housing
Finance Agency, to be expended for the purposes of the California
Homebuyer’s Downpayment Assistance Program authorized by
Chapter 11 (commencing with Section 51500) of Part 3. Up to one
hundred million dollars ($100,000,000) of these funds may be
expended pursuant to subdivision (b) of Section 51504.

(F) One hundred million dollars ($100,000,000) shall be
transferred to the Affordable Housing Innovation Fund, which is
hereby created in the State Treasury, to be administered by the
Department of Housing and Community Development. Funds shall
be expended for competitive grants or loans to sponsoring entities
that develop, own, lend, or invest in affordable housing and used
to create pilot programs to demonstrate innovative, cost-saving
approaches to creating or preserving affordable housing. Specific
criteria establishing eligibility for and use of the funds shall be
established in statute as approved by a 2⁄3 vote of each house of
the Legislature. Any funds not encumbered for the purposes set
forth in this subparagraph within 30 months of availability shall
revert to the Self-Help Housing Fund created by Section 50697.1
and shall be available for the purposes described in subparagraph
(D).

(G) One hundred twenty-five million dollars ($125,000,000)
shall be transferred to the Building Equity and Growth in
Neighborhoods Fund to be used for the Building Equity and
Growth in Neighborhoods (BEGIN) Program pursuant to Chapter
14.5 (commencing with Section 50860) of Part 1. Any funds not
encumbered for the purposes set forth in this subparagraph by
November 17, 2011, shall revert for general use in the CalHome
Program unless the department determines that funds should revert
sooner due to diminished demand.

(H) Fifty million dollars ($50,000,000) shall be transferred to
the Emergency Housing and Assistance Fund for both of the
following purposes:

(i)  Distribution of capital development grants under the
Emergency Housing and Assistance Program authorized by Chapter
11.5 (commencing with Section 50800) of Part 2 of Division 31.
The funds shall be administered by the Department of Housing
and Community Development in a manner consistent with the
restrictions and authorizations contained in Provision 3 of Item
2240-105-0001 of the Budget Act of 2000, except that any
appropriations in that item shall not apply. The competitive system
used by the department shall incorporate priorities set by the
designated local boards and their input as to the relative merits of
submitted applications from within the designated local board’s
county in relation to those priorities. In addition, the funding
limitations contained in this section shall not apply to the
appropriation in that budget item.

(ii) The availability of funds for supportive housing purposes
specified in subparagraph (B).

(2) The Legislature may, from time to time, amend the
provisions of law related to programs to which funds are, or have
been, allocated pursuant to this subdivision for the purpose of
improving the efficiency and effectiveness of the program, or for
the purpose of furthering the goals of the program.

(3) With the revenues from bond proceeds issued and sold
pursuant to this part, the Bureau of State Audits shall conduct
periodic audits to ensure that bond proceeds are awarded in a timely
fashion and in a manner consistent with the requirements of this
section, and that awardees of bond proceeds are using funds in
compliance with applicable provisions of this section. The first
audit shall be conducted no later than one year from voter approval
of this part.

(4) In its annual report to the Legislature, the Department of
Housing and Community Development shall report how funds that
were made available pursuant to this subdivision and allocated in
the prior year were expended. The department shall make the report
available to the public on its Internet Web site.

(b) Eight hundred fifty million dollars ($850,000,000) shall be
deposited in the Regional Planning, Housing, and Infill Incentive
Account, which is hereby created in the fund. Funds in the account
shall be available, upon appropriation by the Legislature, and
subject to such other conditions and criteria as the Legislature may
provide in statute, for the following purposes:

(1) For infill incentive grants for capital outlay related to infill
housing development and other related infill development,
including, but not limited to, all of the following:

(A) No more than two hundred million dollars ($200,000,000)
for park creation, development, or rehabilitation to encourage infill
development.

(B) Water, sewer, or other public infrastructure costs associated
with infill development.

(C) Transportation improvements related to infill development
projects.

(D) Traffic mitigation.

(2) For brownfield cleanup that promotes infill housing
development and other related infill development consistent with
regional and local plans.

(c) Three hundred million dollars ($300,000,000) to be deposited
in the Transit-Oriented Development Account, which is hereby
created in the fund, for transfer to the Transit-Oriented
Development Implementation Fund, for expenditure, upon
appropriation by the Legislature, pursuant to the Transit-Oriented
Development Implementation Program authorized by Part 13
(commencing with Section 53560).

(d) Two hundred million dollars ($200,000,000) shall be
deposited in the Housing Urban-Suburban-and-Rural Parks
Account, which is hereby created in the fund. Funds in the account
shall be available upon appropriation by the Legislature for
housing-related parks grants in urban, suburban, and rural areas,
subject to the conditions and criteria that the Legislature may
provide in statute.

begin insert

begin insert SEC. 61. end insert   

end insert

begin insert Section 135 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

135.  

In accordance with rules of practice and procedure that it
may adopt, the appeals board may, with the approval of the
begin delete Department of Finance, end delete begin insert Secretary of State, end insert destroy or otherwise
dispose of any file kept by it in connection with any proceeding
under Division 4 (commencing with Section 3200) or Division 4.5
(commencing with Section 6100).

begin insert

begin insert SEC. 62. end insert   

end insert

begin insert Section 1725.5 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 1725.5. end insert   

A contractor shall be registered pursuant to this section
to be qualified to bid on, be listed in a bid proposal, subject to the
requirements of Section 4104 of the Public Contract Code, or
engage in the performance of any public work contract that is
subject to the requirements of this chapter. For the purposes of
this section, “contractor” includes a subcontractor as defined by
Section 1722.1.

(a) To qualify for registration under this section, a contractor
shall do all of the following:

(1) Beginning July 1, 2014, register with the Department of
Industrial Relations in the manner prescribed by the department
and pay an initial nonrefundable application fee of three hundred
dollars ($300) to qualify for registration under this section and
an annual renewal fee on or before July 1 of each year thereafter.
The annual renewal fee shall be in a uniform amount set by the
Director of Industrial Relations, and the initial registration and
renewal fees may be adjusted no more than annually by the director
to support the costs specified in Section 1771.3.

(2) Provide evidence, disclosures, or releases as are necessary
to establish all of the following:

(A) Workers’ Compensation coverage that meets the
requirements of Division 4 (commencing with Section 3200) and
includes sufficient coverage for any worker whom the contractor
employs to perform work that is subject to prevailing wage
requirements other than a contractor who is separately registered
under this section. Coverage may be evidenced by a current and
valid certificate of workers’ compensation Insurance or
certification of self-insurance required under Section 7125 of the
Business and Professions Code.

(B) If applicable, the contractor is licensed in accordance with
Chapter 9 (commencing with Section 7000) of the Business and
Professions Code.

(C) The contractor does not have any delinquent liability to an
employee or the state for any assessment of back wages or related
damages, interest, fines, or penalties pursuant to any final
judgment, order, or determination by a court or any federal, state,
or local administrative agency, including a confirmed arbitration
award. However, for purposes of this paragraph, the contractor
shall not be disqualified for any judgment, order, or determination
that is under appeal, provided that the contractor has secured the
payment of any amount eventually found due through a bond or
other appropriate means.

(D) The contractor is not currently debarred under Section
1777.1 or under any other federal or state law providing for the
debarment of contractors from public works.

(E) The contractor has not bid on a public works contract, been
listed in a bid proposal, or engaged in the performance of a
contract for public works without being lawfully registered in
accordance with this section, within the preceding 12 months or
since the effective date of the requirements set forth in subdivision
(e), whichever is earlier. If a contractor is found to be in violation
of the requirements of this paragraph, the period of disqualification
shall be waived if both of the following are true:

(i) The contractor has not previously been found to be in
violation of the requirements of this paragraph within the
preceding 12 months.

(ii) The contractor pays an additional nonrefundable penalty
registration fee of two thousand dollars ($2,000).

(b) Fees received pursuant to this section shall be deposited in
the State Public Works Enforcement Fund established by Section
1771.3 and shall be used only for the purposes specified in that
section.

(c) A contractor who fails to pay the renewal fee required under
paragraph (1) of subdivision (a) on or before the expiration of any
prior period of registration shall be prohibited from bidding on
or engaging in the performance of any contract for public work
until once again registered pursuant to this section. If the failure
to pay the renewal fee was inadvertent, the contractor may renew
its registration retroactively by paying an additional nonrefundable
penalty renewal fee equal to the amount of the renewal fee within
90 days of the due date of the renewal fee.

(d) If, after a body awarding a contract accepts the contractor’s
bid or awards the contract, the work covered by the bid or contract
is determined to be a public work to which Section 1771 applies,
either as the result of a determination by the director pursuant to
Section 1773.5 or a court decision, the requirements of this section
shall not apply, subject to the following requirements:

(1) The body that awarded the contract failed, in the bid
specification or in the contract documents, to identify as a public
work that portion of the work that the determination or decision
subsequently classifies as a public work.

(2) Within 20 days following service of notice on the awarding
body of a determination by the Director of Industrial Relations
pursuant to Section 1773.5 or a decision by a court that the
contract was for public work as defined in this chapter, the
contractor and any subcontractors are registered under this section
or are replaced by a contractor or subcontractors who are
registered under this section.

(3) The requirements of this section shall apply prospectively
only to any subsequent bid, bid proposal, contract, or work
performed after the awarding body is served with notice of the
determination or decision referred to in paragraph (2) of this
subdivision.

(e) The requirements of this section shall apply to any bid
proposal submitted on or after March 1, 2015, and any contract
for public work, as defined in this chapter, entered into on or after
April 1, 2015.

end insert

begin insert

begin insert SEC. 63. end insert   

end insert

begin insert Section 1771.1 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 1771.1. end insert   

(a) A contractor or subcontractor shall not be qualified
to bid on, be listed in a bid proposal, subject to the requirements
of Section 4104 of the Public Contract Code, or engage in the
performance of any contract for public work, as defined in this
chapter, unless currently registered and qualified to perform public
work pursuant to Section 1725.5. It is not a violation of this section
for an unregistered contractor to submit a bid that is authorized
by Section 7029.1 of the Business and Professions Code or by
Section 10164 or 20103.5 of the Public Contract Code, provided
the contractor is registered to perform public work pursuant to
Section 1725.5 at the time the contract is awarded.

(b) Notice of the requirement described in subdivision (a) shall
be included in all bid invitations and public works contracts, and
a bid shall not be accepted nor any contract or subcontract entered
into without proof of the contractor or subcontractor’s current
registration to perform public work pursuant to Section 1725.5.

(c) An inadvertent error in listing a subcontractor who is not
registered pursuant to Section 1725.5 in a bid proposal shall not
be grounds for filing a bid protest or grounds for considering the
bid nonresponsive, provided that any of the following apply:

(1) The subcontractor is registered prior to the bid opening.

(2) Within 24 hours after the bid opening, the subcontractor is
registered and has paid the penalty registration fee specified in
subparagraph (E) of paragraph (2) of subdivision (a) of Section
1725.5.

(3) The subcontractor is replaced by another registered
subcontractor pursuant to Section 4107 of the Public Contract
Code.

(d) Failure by a subcontractor to be registered to perform public
work as required by subdivision (a) shall be grounds under Section
4107 of the Public Contract Code for the contractor, with the
consent of the awarding authority, to substitute a subcontractor
who is registered to perform public work pursuant to Section
1725.5 in place of the unregistered subcontractor.

(e) The department shall maintain on its Internet Web site a list
of contractors who are currently registered to perform public work
pursuant to Section 1725.5.

(f) A contract entered into with any contractor or subcontractor
in violation of subdivision (a) shall be subject to cancellation,
provided that a contract for public work shall not be unlawful,
void, or voidable solely due to the failure of the awarding body,
contractor, or any subcontractor to comply with the requirements
of Section 1725.5 or this section.

(g) This section shall apply to any bid proposal submitted on
or after March 1, 2015, and any contract for public work entered
into on or after April 1, 2015.

end insert

begin insert

begin insert SEC. 64. end insert   

end insert

begin insert Section 1771.3 of the end insert begin insert Labor Code end insert begin insert is repealed. end insert

begin delete

1771.3.  

(a) (1) The Department of Industrial Relations shall
monitor and enforce compliance with applicable prevailing wage
requirements for any public works project paid for in whole or
part out of public funds, within the meaning of subdivision (b) of
Section 1720, that are derived from bonds issued by the state, and
shall charge each awarding body for the reasonable and directly
related costs of monitoring and enforcing compliance with the
prevailing wage requirements on each project.

(2) (A) The State Public Works Enforcement Fund is hereby
created as a special fund in the State Treasury. All moneys received
by the department pursuant to this section shall be deposited in
the fund. Notwithstanding Section 13340 of the Government Code,
all moneys in the fund shall be continuously appropriated to the
Department of Industrial Relations, to monitor and enforce
compliance with the applicable prevailing wage requirements on
public works projects paid for in whole or part out of public funds,
within the meaning of subdivision (b) of Section 1720, that are
derived from bonds issued by the state and other projects for which
the department provides prevailing wage monitoring and
enforcement activities and for which it is to be reimbursed by the
awarding body, and shall not be used or borrowed for any other
purpose.

(B) Notwithstanding any other law, upon order of the Director
of Finance, a loan in the amount of four million three hundred
thousand dollars ($4,300,000) shall be provided from the Uninsured
Employers Benefit Trust Fund to the State Public Works
Enforcement Fund to meet the startup needs of the Labor
Compliance Monitoring Unit.

(3) The Director of Industrial Relations shall adopt regulations
implementing this section, specifying the activities, including, but
not limited to, monthly review, and audit if appropriate, of payroll
records, which the department will undertake to monitor and
enforce compliance with applicable prevailing wage requirements
on public works projects paid for in whole or part out of public
funds, within the meaning of subdivision (b) of Section 1720, that
are derived from bonds issued by the state. The department, with
the approval of the Director of Finance, shall determine the rate,
which the department may from time to time amend, that the
department will charge to recover the reasonable and directly
related costs of performing the monitoring and enforcement
services for public works projects. The amount of bond funds
utilized by an awarding body to pay the department’s fee shall not
exceed one-fourth of 1 percent of the state bond proceeds used for
the public works projects, with any other remaining costs of
monitoring and enforcing compliance to be paid by the awarding
body from other funds authorized to be used to finance the project.

(4) The reasonable and directly related costs of monitoring and
enforcing compliance with the prevailing wage requirements on
a public works project incurred by the department in accordance
with this section are payable by the awarding body of the public
works project as a cost of construction. Notwithstanding any other
provision of law, but subject to any limitations or restrictions of
the bond act, the board, commission, department, agency, or official
responsible for the allocation of bond proceeds from the bond
funds shall consider and provide for amounts in support of the
costs when allocating or approving expenditures of bond proceeds
for the construction of the authorized project. The awarding body
may elect not to receive or expend amounts from bond proceeds
to pay the costs of the project; however, that election does not
relieve the awarding body from reimbursing the Department of
Industrial Relations from other funding sources for monitoring
and enforcing prevailing wage requirements on the project pursuant
to this section or any other applicable provision of law. The
department shall annually provide information, as specified in
regulations, to assist an awarding body to reasonably estimate the
annual cost of monitoring and enforcing compliance.

(b) Paragraph (1) of subdivision (a) shall not apply to any
contract for a public works project paid for in whole or part out of
public funds, within the meaning of subdivision (b) of Section
1720, that are derived from bonds issued by the state if the contract
was awarded under any of the following conditions:

(1) The contract was awarded prior to the effective date of
implementing regulations adopted by the department pursuant to
paragraph (3) of subdivision (a).

(2) The contract was awarded on or after the effective date of
the regulations described in paragraph (1), if the awarding body
had previously initiated a labor compliance program approved by
the department for some or all of its public works projects and had
not contracted with a third party to conduct such program, and
requests and receives approval from the department to continue
to operate its existing labor compliance program for its public
works projects paid for in whole or part out of public funds, within
the meaning of subdivision (b) of Section 1720, that are derived
from bonds issued by the state, in place of the department
monitoring and enforcing compliance on projects pursuant to
subdivision (a).

(3) The contract is awarded on or after the effective date of the
regulations described in paragraph (1), if the awarding body has
entered into a collective bargaining agreement that binds all of the
contractors performing work on the project and that includes a
mechanism for resolving disputes about the payment of wages.

(c) This section shall not apply to public works projects subject
to Section 75075 of the Public Resources Code.

end delete

begin insert

begin insert SEC. 65. end insert   

end insert

begin insert Section 1771.3 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 1771.3. end insert   

(a) The State Public Works Enforcement Fund is
hereby created as a special fund in the State Treasury to be
available upon appropriation of the Legislature. All registration
fees collected pursuant to Section 1725.5 and any other moneys
as are designated by statute or order shall be deposited in the fund
for the purposes specified in subdivision (b).

(b) Moneys in the State Public Works Enforcement Fund shall
be used only for the following purposes:

(1) The reasonable costs of administering the registration of
contractors and subcontractors to perform public work pursuant
to Section 1725.5.

(2) The costs and obligations associated with the administration
and enforcement of the requirements of this chapter by the
Department of Industrial Relations.

(3) The monitoring and enforcement of any requirement of this
code by the Labor Commissioner on a public works project or in
connection with the performance of public work as defined
pursuant to this chapter.

(c) The annual contractor registration renewal fee specified in
subdivision (a) of Section 1725.5, and any adjusted application
or renewal fee, shall be set in amounts that are sufficient to support
the annual appropriation approved by the Legislature for the State
Public Works Enforcement Fund and not result in a fund balance
greater than 25 percent of the appropriation. Any yearend balance
in the fund greater than 25 percent of the appropriation shall be
applied as a credit when determining any fee adjustments for the
subsequent fiscal year.

(d) To provide adequate cashflow for the purposes specified in
subdivision (b), the Director of Finance, with the concurrence of
the Secretary of the Labor and Workforce Development Agency,
may approve a short-term loan each fiscal year from the Labor
and Workforce Development Fund to the State Public Works
Enforcement Fund.

(1) The maximum amount of the annual loan allowable may be
up to, but shall not exceed 50 percent of the appropriation authority
of the State Public Works Enforcement Fund in the same year in
which the loan was made.

(2) For the purposes of this section, a “short-term loan” is a
transfer that is made subject to both of the following conditions:

(A) Any amount loaned is to be repaid in full during the same
fiscal year in which the loan was made, except that repayment may
be delayed until a date not more than 30 days after the date of
enactment of the annual Budget Act for the subsequent fiscal year.

(B) Loans shall be repaid whenever the funds are needed to
meet cash expenditure needs in the loaning fund or account.

end insert

begin insert

begin insert SEC. 66. end insert   

end insert

begin insert Section 1771.4 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 1771.4. end insert   

(a) All of the following are applicable to all public
works projects that are otherwise subject to the requirements of
this chapter:

(1) The call for bids and contract documents shall specify that
the project is subject to compliance monitoring and enforcement
by the Department of Industrial Relations.

(2) The awarding body shall post or require the prime contractor
to post job site notices, as prescribed by regulation.

(3) Each contractor and subcontractor shall furnish the records
specified in Section 1776 directly to the Labor Commissioner, in
the following manner:

(A) At least monthly or more frequently if specified in the
contract with the awarding body.

(B) In a format prescribed by the Labor Commissioner.

(4) The department shall undertake those activities it deems
necessary to monitor and enforce compliance with prevailing wage
requirements.

(b) The Labor Commissioner may exempt a public works project
from compliance with all or part of the requirements of subdivision
(a) of this section if either of the following occurs:

(1) The awarding body has enforced an approved labor
compliance program, as defined in Section 1771.5, on all public
works projects under its authority, except those deemed exempt
pursuant to subdivision (a) of Section 1771.5, continuously since
December 31, 2011.

(2) The awarding body has entered into a collective bargaining
agreement that binds all contractors performing work on the
project and that includes a mechanism for resolving disputes about
the payment of wages.

(c) (1) The requirements of paragraph (1) of subdivision (a)
shall only apply to contracts for public works projects awarded
on or after January 1, 2015.

(2) The requirements of paragraph (3) of subdivision (a) shall
only apply to the following projects:

(A) Projects that were subject to a requirement to furnish
records to the Compliance Monitoring Unit pursuant to Section
16461 of Title 8 of the California Code of Regulations, prior to
the effective date of this section.

(B) Projects for which the initial contract is awarded on or after
April 1, 2015.

(C) Any other ongoing project in which the Labor Commissioner
directs the contractors or subcontractors on the project to furnish
records in accordance with paragraph (3) of subdivision (a).

(D) All projects, whether new or ongoing, on or after January
1, 2016.

end insert

begin insert

begin insert SEC. 67. end insert   

end insert

begin insert Section 1771.5 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

1771.5.  

(a) Notwithstanding Section 1771, an awarding body
may choose not to require the payment of the general prevailing
rate of per diem wages or the general prevailing rate of per diem
wages for holiday and overtime work for any public works project
of twenty-five thousand dollars ($25,000) or less when the project
is for construction work, or for any public works project of fifteen
thousand dollars ($15,000) or less when the project is for alteration,
demolition, repair, or maintenance work, if the awarding body
begin delete elects to either: end delete

begin delete (1) end delete begin delete   end delete begin delete Initiate and end delete begin insert has elected to initiate and has been approved
by the Director of Industrial Relations to end insert enforce a labor
compliance program pursuant to subdivision (b) for every public
works project under the authority of the awarding begin delete body as described
in subdivision (e). end delete begin insert body. end insert

begin delete

(2) Reimburse the Department of Industrial Relations for the
cost of monitoring and enforcing compliance with prevailing wage
requirements for every public works project of the awarding body
as described in subdivision (f).

end delete

(b) For purposes of this section, a labor compliance program
shall include, but not be limited to, the following requirements:

(1) All bid invitations and public works contracts shall contain
appropriate language concerning the requirements of this chapter.

(2) A prejob conference shall be conducted with the contractor
and subcontractors to discuss federal and state labor law
requirements applicable to the contract.

(3) Project contractors and subcontractors shall maintain and
furnish, at a designated time, a certified copy of each weekly
payroll containing a statement of compliance signed under penalty
of perjury.

(4) The awarding body shall review, and, if appropriate, audit
payroll records to verify compliance with this chapter.

(5) The awarding body shall withhold contract payments when
payroll records are delinquent or inadequate.

(6) The awarding body shall withhold contract payments equal
to the amount of underpayment and applicable penalties when,
after investigation, it is established that underpayment has occurred.

(7) The awarding body shall comply with any other prevailing
wage monitoring and enforcement activities that are required to
be conducted by labor compliance programs by the Department
of Industrial Relations.

(c) For purposes of this chapter, “labor compliance program”
means a labor compliance program that is approved, as specified
in state regulations, by the Director of Industrial Relations.

(d) For purposes of this chapter, the Director of Industrial
Relations may revoke the approval of a labor compliance program
in the manner specified in state regulations.

begin delete

(e) An awarding body that elects to use a labor compliance
program pursuant to subdivision (a) shall use the labor compliance
program for all contracts for public works projects awarded prior
to the effective date of the regulations adopted by the department
as specified in subdivision (g). For contracts for public works
projects awarded on or after the effective date of regulations
adopted by the department as specified in subdivision (g), the
awarding body may also elect to continue operating an existing
previously approved labor compliance program in lieu of
reimbursing the Department of Industrial Relations for the cost of
monitoring and enforcing compliance with prevailing wage
requirements on the awarding body’s public works projects if it
has not contracted with a third party to conduct its labor compliance
program and if it requests and receives approval from the
department to continue its existing program.

(f) An awarding body that elects to reimburse the department
for the cost of monitoring and enforcing compliance with prevailing
wage requirements for public works projects of the awarding body,
pursuant to subdivision (a), shall, for all of its contracts for public
works projects awarded on or after the effective date of the
regulations adopted by the department as specified in subdivision
(g) do all of the following:

(1) Ensure that all bid invitations and public works contracts
contain appropriate language concerning the requirements of this
chapter.

(2) Conduct a prejob conference with the contractor and
subcontractor to discuss federal and state labor law requirements
applicable to the contract.

(3) Enter into an agreement with the department to reimburse
the department for its costs of performing the service of monitoring
and enforcing compliance with applicable prevailing wage
requirements on the awarding body’s projects.

(g) The Department of Industrial Relations shall adopt
regulations implementing this section specifying the activities that
the department shall undertake to monitor and enforce compliance
with the prevailing wage requirements on the public works projects,
including, but not limited to, monthly review, and audit if
appropriate, of payroll records.

(h) (1) The Department of Industrial Relations shall, in
accordance with paragraphs (3) and (4) of subdivision (a) of
Section 1771.3, determine the rate, which the department may
from time to time amend, that the department will charge for
reimbursement from an awarding body for the reasonable and
directly related costs of performing the specified monitoring and
enforcement services for public works projects.

(2) Notwithstanding paragraph (1), for public works projects
paid for in whole or part out of public funds, within the meaning
of subdivision (b) of Section 1720, that are derived from bonds
issued by the state, the amount charged by the department shall
not exceed one-fourth of 1 percent of the state bond proceeds used
for the public works project, with any other remaining costs of
monitoring and enforcing compliance to be paid by the awarding
body from other funds authorized to be used to finance the project.

(i) All amounts collected by the Department of Industrial
Relations for its services pursuant to this section shall be deposited
in the State Public Works Enforcement Fund.

end delete

begin insert

begin insert SEC. 68. end insert   

end insert

begin insert Section 1771.7 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

1771.7.  

(a) (1) For contracts specified in subdivision (f), an
awarding body that chooses to use funds derived from either the
Kindergarten-University Public Education Facilities Bond Act of
2002 or the Kindergarten-University Public Education Facilities
Bond Act of 2004 for a public works project, shall initiate and
enforce, or contract with a third party to initiate and enforce, a
labor compliance program, as described in subdivision (b) of
Section 1771.5, with respect to that public works project.

(2) If an awarding body described in paragraph (1) chooses to
contract with a third party to initiate and enforce a labor compliance
program for a project described in paragraph (1), that third party
shall not review the payroll records of its own employees or the
employees of its subcontractors, and the awarding body or an
independent third party shall review these payroll records for
purposes of the labor compliance program.

(b) This section applies to public works that commence on or
after April 1, 2003. For purposes of this subdivision, work
performed during the design and preconstruction phases of
construction, including, but not limited to, inspection and land
surveying work, does not constitute the commencement of a public
work.

(c) (1) For purposes of this section, if any campus of the
California State University chooses to use the funds described in
subdivision (a), then the “awarding body” is the Chancellor of the
California State University. For purposes of this subdivision, if
the chancellor is required by subdivision (a) to initiate and enforce,
or to contract with a third party to initiate and enforce, a labor
compliance program, then in addition to the requirements described
in subdivision (b) of Section 1771.5, the Chancellor of the
California State University shall review the payroll records on at
least a monthly basis to ensure the awarding body’s compliance
with the labor compliance program.

(2) For purposes of this subdivision, if an awarding body
described in subdivision (a) is the University of California or any
campus of that university, and that awarding body is required by
subdivision (a) to initiate and enforce, or to contract with a third
party to initiate and enforce, a labor compliance program, then in
addition to the requirements described in subdivision (b) of Section
1771.5, the payroll records shall be reviewed on at least a monthly
basis to ensure the awarding body’s compliance with the labor
compliance program.

(d) (1) An awarding body described in subdivision (a) shall
make a written finding that the awarding body has initiated and
enforced, or has contracted with a third party to initiate and enforce,
the labor compliance program described in subdivision (a).

(2) (A) If an awarding body described in subdivision (a) is a
school district, the governing body of that district shall transmit
to the State Allocation Board, in the manner determined by that
board, a copy of the finding described in paragraph (1).

(B) The State Allocation Board shall not release the funds
described in subdivision (a) to an awarding body that is a school
district until the State Allocation Board has received the written
finding described in paragraph (1).

(C) If the State Allocation Board conducts a postaward audit
procedure with respect to an award of the funds described in
subdivision (a) to an awarding body that is a school district, the
State Allocation Board shall verify, in the manner determined by
that board, that the school district has complied with the
requirements of this subdivision.

(3) If an awarding body described in subdivision (a) is a
community college district, the Chancellor of the California State
University, or the office of the President of the University of
California or any campus of the University of California, that
awarding body shall transmit, in the manner determined by the
Director of Industrial Relations, a copy of the finding described
in paragraph (1) to the director of that department, or the director
of any successor agency that is responsible for the oversight of
employee wage and employee work hours laws.

(e) Because the reasonable costs directly related to monitoring
and enforcing compliance with the prevailing wage requirements
are necessary oversight activities, integral to the cost of
construction of the public works projects, notwithstanding Section
17070.63 of the Education Code, the grant amounts as described
in Chapter 12.5 (commencing with Section 17070.10) of Part 10
of Division 1 of Title 1 of the Education Code for the costs of a
new construction or modernization project shall include the state’s
share of the reasonable and directly related costs of the labor
compliance program used to monitor and enforce compliance with
prevailing wage requirements.

(f) This section shall only apply to contracts awarded prior to
begin delete the effective date of regulations adopted by the Department of
Industrial Relations pursuant to paragraph (3) of subdivision (a)
of Section 1771.3. end delete begin insert January 1, 2012. end insert

begin insert

begin insert SEC. 69. end insert   

end insert

begin insert Section 1773.3 of the end insert begin insert Labor Code end insert begin insert is repealed. end insert

begin delete

1773.3.  

An awarding agency whose public works contract falls
within the jurisdiction of Section 1771.3, 1771.5, or 1777.5, or
any other statute providing for the payment of fees to the
Department of Industrial Relations for enforcing prevailing wage
requirements on that project, shall, within five days of the award,
send a copy of the award to the department. In lieu of responding
to any specific request for contract award information, the
department my make such information available for public review
by posting on its Internet Web site. Within five days of a finding
of any discrepancy regarding the ratio of apprentices to
journeymen, pursuant to the certificated fixed number of
apprentices to journeymen, the awarding agency shall notify the
Division of Labor Standards Enforcement.

end delete

begin insert

begin insert SEC. 70. end insert   

end insert

begin insert Section 1773.3 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 1773.3. end insert   

(a) (1) An awarding agency shall provide notice to
the Department of Industrial Relations of any public works contract
subject to the requirements of this chapter, within five days of the
award.

(2) The notice shall be transmitted electronically in a format
specified by the department and shall include the name of the
contractor, any subcontractor listed on the successful bid, the bid
and contract award dates, the contract amount, the estimated start
and completion dates, job site location, and any additional
information the department specifies that aids in the administration
and enforcement of this chapter.

(b) In lieu of responding to any specific request for contract
award information, the department may make the information
provided by awarding bodies pursuant to this section available
for public review on its Internet Web site.

end insert

begin insert

begin insert SEC. 71. end insert   

end insert

begin insert Section 1776 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

1776.  

(a) Each contractor and subcontractor shall keep accurate
payroll records, showing the name, address, social security number,
work classification, straight time and overtime hours worked each
day and week, and the actual per diem wages paid to each
journeyman, apprentice, worker, or other employee employed by
him or her in connection with the public work. Each payroll record
shall contain or be verified by a written declaration that it is made
under penalty of perjury, stating both of the following:

(1) The information contained in the payroll record is true and
correct.

(2) The employer has complied with the requirements of
Sections 1771, 1811, and 1815 for any work performed by his or
her employees on the public works project.

(b) The payroll records enumerated under subdivision (a) shall
be certified and shall be available for inspection at all reasonable
hours at the principal office of the contractor on the following
basis:

(1) A certified copy of an employee’s payroll record shall be
made available for inspection or furnished to the employee or his
or her authorized representative on request.

(2) A certified copy of all payroll records enumerated in
subdivision (a) shall be made available for inspection or furnished
upon request to a representative of the body awarding the contract
and the Division of Labor Standards Enforcement of the
Department of Industrial Relations.

(3) A certified copy of all payroll records enumerated in
subdivision (a) shall be made available upon request by the public
for inspection or for copies thereof. However, a request by the
public shall be made through either the body awarding the contract
or the Division of Labor Standards Enforcement. If the requested
payroll records have not been provided pursuant to paragraph (2),
the requesting party shall, prior to being provided the records,
reimburse the costs of preparation by the contractor, subcontractors,
and the entity through which the request was made. The public
may not be given access to the records at the principal office of
the contractor.

(c)  begin delete The end delete begin insert Unless required to be furnished directly to the Labor
Commissioner in accordance with paragraph (3) of subdivision
(a) of Section 1771.4, the end insert certified payroll records shall be on forms
provided by the Division of Labor Standards Enforcement or shall
contain the same information as the forms provided by the division.
The payroll records may consist of printouts of payroll data that
are maintained as computer records, if the printouts contain the
same information as the forms provided by the division and the
printouts are verified in the manner specified in subdivision (a).

(d) A contractor or subcontractor shall file a certified copy of
the records enumerated in subdivision (a) with the entity that
requested the records within 10 days after receipt of a written
request.

(e) Except as provided in subdivision (f), any copy of records
made available for inspection as copies and furnished upon request
to the public or any public agency by the awarding body or the
Division of Labor Standards Enforcement shall be marked or
obliterated to prevent disclosure of an individual’s name, address,
and social security number. The name and address of the contractor
awarded the contract or the subcontractor performing the contract
shall not be marked or obliterated. Any copy of records made
available for inspection by, or furnished to, a multiemployer
Taft-Hartley trust fund (29 U.S.C. Sec. 186(c)(5)) that requests
the records for the purposes of allocating contributions to
participants shall be marked or obliterated only to prevent
disclosure of an individual’s full social security number, but shall
provide the last four digits of the social security number. Any copy
of records made available for inspection by, or furnished to, a joint
labor-management committee established pursuant to the federal
Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a)
shall be marked or obliterated only to prevent disclosure of an
individual’s social security number.

(f) (1) Notwithstanding any other provision of law, agencies
that are included in the Joint Enforcement Strike Force on the
Underground Economy established pursuant to Section 329 of the
Unemployment Insurance Code and other law enforcement
agencies investigating violations of law shall, upon request, be
provided nonredacted copies of certified payroll records. Any
copies of records or certified payroll made available for inspection
and furnished upon request to the public by an agency included in
the Joint Enforcement Strike Force on the Underground Economy
or to a law enforcement agency investigating a violation of law
shall be marked or redacted to prevent disclosure of an individual’s
name, address, and social security number.

(2) An employer shall not be liable for damages in a civil action
for any reasonable act or omission taken in good faith in
compliance with this subdivision.

(g) The contractor shall inform the body awarding the contract
of the location of the records enumerated under subdivision (a),
including the street address, city, and county, and shall, within five
working days, provide a notice of a change of location and address.

(h) The contractor or subcontractor has 10 days in which to
comply subsequent to receipt of a written notice requesting the
records enumerated in subdivision (a). In the event that the
contractor or subcontractor fails to comply within the 10-day
period, he or she shall, as a penalty to the state or political
subdivision on whose behalf the contract is made or awarded,
forfeit one hundred dollars ($100) for each calendar day, or portion
thereof, for each worker, until strict compliance is effectuated.
Upon the request of the Division of Labor Standards Enforcement,
these penalties shall be withheld from progress payments then due.
A contractor is not subject to a penalty assessment pursuant to this
section due to the failure of a subcontractor to comply with this
section.

(i) The body awarding the contract shall cause to be inserted in
the contract stipulations to effectuate this section.

(j) The director shall adopt rules consistent with the California
Public Records Act (Chapter 3.5 (commencing with Section 6250)
of Division 7 of Title 1 of the Government Code) and the
Information Practices Act of 1977 (Title 1.8 (commencing with
Section 1798) of Part 4 of Division 3 of the Civil Code) governing
the release of these records, including the establishment of
reasonable fees to be charged for reproducing copies of records
required by this section.

begin insert

begin insert SEC. 72. end insert   

end insert

begin insert Section 179 of the end insert begin insert Military and Veterans Code end insert begin insert is
amended to read: end insert

179.  

(a) The Adjutant General shall establish a California State
Military Museum and Resource Center as a repository for military
artifacts, memorabilia, equipment, documents, and other items
relating to the military history of California, and to the history of
the California National Guard, in accordance with applicable
regulations of the United States Army governing Army museum
activities. The museum begin delete shall end delete begin insert may end insert consist of the facility described
in the Proclamation of the Governor dated May 11, 1994, and any
branches as may currently exist or may from time to time be created
throughout the state. Each facility shall be deemed to be an armory
within the meaning of Section 430.

(b) The Adjutant General begin delete shall end delete begin insert may end insert enter into begin delete an end delete operating
begin delete agreement end delete begin insert agreements end insert with begin delete the California State Military Museum
Foundation, formerly known as the California National Guard
Historical Society, an existing California nonprofit public benefit
corporation that is tax exempt under Section 501(c)(3) of the
Internal Revenue Code. Under the operating agreement with the
Adjutant General, the foundation shall operate the California State
Military Museum and Resource Center in coordination with the
California State Military Reserve’s California Center for Military
History. The foundation shall develop, administer, interpret, and
manage museum historical programs and related public services,
and acquire and manage funding for museum programs and
services. end delete begin insert nonprofit historical foundations, military museums,
historical societies, or other entities to conduct museum activities
pursuant to the rules and regulations promulgated hereunder. end insert

(c) Volunteers, docents, members of the California State Military
Reserve, or others working with or for the California State Military
Museum begin delete Foundation, end delete begin insert and Resource Center, end insert for purposes consistent
with the mission of the organization, shall be considered volunteers
under Sections 3118 and 3119 of the Government Code and Section
3363.5 of the Labor Code.

begin delete

(d) The Board of Directors of the California State Military
Museum Foundation shall include the Adjutant General, or the
Assistant Adjutant General, or any Deputy Adjutant General
designated by the Adjutant General, as an ex officio voting member
of the board. The board of directors of the foundation shall be the
governing authority for operations funded through moneys received
by the foundation. The board of directors of the foundation shall,
no later than October 15 of each year, submit an audit report to
the Adjutant General, the Chair of the Joint Legislative Audit
Committee, the Chair of the Joint Legislative Budget Committee,
and the Director of Finance.

(e)

end delete

begin insert (d) end insert  No funds raised or assets acquired by begin delete the foundation end delete begin insert an
entity described in subdivision (b) end insert shall be used for purposes
inconsistent with support of the museum.

begin delete

(f)

end delete

begin insert (e) end insert  The begin delete Board of Directors of the California State Military
Museum Foundation end delete begin insert Military Department end insert shall, no later than
March 15 of each year, submit a business plan for the following
fiscal year to begin delete the Adjutant General, end delete the Director of begin delete Finance, end delete
begin insert Finance end insert and the Chair of the Joint Legislative Budget Committee
for review and comment. The begin delete board of directors end delete begin insert Military
Department end insert shall also submit, not less than 30 days prior to
adoption, any proposed formal amendments to the business plan
to begin delete the Adjutant General, end delete the Director of begin delete Finance, end delete begin insert Finance end insert and the
Chair of the Joint Legislative Budget Committee for review and
comment.

begin delete

(g)

end delete

begin insert (f) end insert  (1) The Adjutant General or begin delete the California State Military
Museum Foundation end delete begin insert an entity described in subdivision (b) end insert may
solicit, receive, and administer donations of funds or property for
the support and improvement of the museum. Any grants or
donations received may be expended or used for museum purposes.

(2) Property of historical military significance, not including
real property, that is owned by the state and is determined by the
Adjutant General to be in excess of the needs of the Military
Department, shall be transferred to the museum.

(3) Property determined by the begin delete California State Military Museum
Foundation end delete begin insert Adjutant General or an entity described in subdivision
(b) end insert to be in excess of the needs of the museum may be sold,
donated, exchanged, or otherwise disposed of, at its discretion, in
a manner appropriate to the historical and intrinsic value of the
property, and the benefits from the disposition shall inure to the
museum. This paragraph does not apply to property held in trust
for the Controller pursuant to Section 1563 of the Code of Civil
Procedure.

begin delete

(h)

end delete

begin insert (g) end insert  The Adjutant General or begin delete the California State Military
Museum Foundation end delete begin insert an entity described in subdivision (b) end insert may
solicit and receive firearms and other weaponry confiscated by or
otherwise in the possession of law enforcement officers as
donations to the museum if he or she deems them to be of historical
or military interest.

begin delete

(i)

end delete

begin insert (h) end insert  The Adjutant General shall, in cooperation with begin delete the
California State Military Museum Foundation, end delete begin insert an entity described
in subdivision (b), end insert conduct a study of the future needs of the
National Guard to preserve, display, and interpret artifacts,
documents, photographs, films, literature, and other items relating
to the history of the military in California.

begin delete

(j)

end delete

begin insert (i) end insert  (1)  begin delete The California State Military Museum Foundation end delete begin insert An
entity described in subdivision (b) end insert may enter into agreements with
other military museums in California, including, but not limited
to, the Legion of Valor Museum, to loan property that is not real
property and that is under the direct control of the foundation.

(2)  begin delete The California State Military Museum Foundation end delete begin insert An entity
described in subdivision (b) end insert may enter into agreements with other
military museums in California to loan property held in trust for
the Controller pursuant to Section 1563 of the Code of Civil
Procedure.

begin insert

begin insert SEC. 73. end insert   

end insert

begin insert Section 1485.5 of the end insert begin insert Penal Code end insert begin insert is amended to read: end insert

1485.5.  

(a) If the district attorney or Attorney General
stipulates to or does not contest the factual allegations underlying
one or more of the grounds for granting a writ of habeas corpus
or a motion to vacate a judgment, the facts underlying the basis
for the court’s ruling or order shall be binding on the Attorney
General, the factfinder, and the California Victim Compensation
and Government Claims Board.

(b) The district attorney shall provide notice to the Attorney
General prior to entering into a stipulation of facts that will be the
basis for the granting of a writ of habeas corpus or a motion to
vacate a judgment.

(c) The express factual findings made by the court, including
credibility determinations, in considering a petition for habeas
corpus, a motion to vacate judgment pursuant to Section 1473.6,
or an application for a certificate of factual innocence, shall be
binding on the Attorney General, the factfinder, and the California
Victim Compensation and Government Claims Board.

(d) For the purposes of this section, “express factual findings”
are findings established as the basis for the court’s ruling or order.

begin insert

(e) For purposes of this section, “court” is defined as a state
or federal court.

end insert

begin insert

begin insert SEC. 74. end insert   

end insert

begin insert Section 13835.7 of the end insert begin insert Penal Code end insert begin insert is amended to
read: end insert

13835.7.  

There is in the State Treasury the Victim-Witness
Assistance Fund. Funds appropriated thereto shall be dispensed
to the Office of Emergency Services exclusively for the purposes
specified in this begin delete article end delete begin insert article, for any other purpose that supports
victims, end insert and for the support of the centers specified in Section
13837.

begin insert

begin insert SEC. 75. end insert   

end insert

begin insert Section 6823 of the end insert begin insert Public Contract Code end insert begin insert is repealed. end insert

begin delete

6823.  

(a) For contracts for public works projects awarded prior
to the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, a transportation entity authorized to use the
design-build method of procurement shall establish and enforce a
labor compliance program containing the requirements outlined
in Section 1771.5 of the Labor Code or shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to projects where the transportation
entity or design-build entity has entered into any collective
bargaining agreement that binds all of the contractors performing
work on the projects.

(b) For contracts for public works projects awarded on or after
the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the transportation entity shall reimburse the
Department of Industrial Relations for its reasonable and directly
related costs of performing prevailing wage monitoring and
enforcement on public works projects pursuant to rates established
by the Department of Industrial Relations as set forth in subdivision
(h) of Section 1771.5 of the Labor Code. All moneys collected
pursuant to this subdivision shall be deposited in the State Public
Works Enforcement Fund, created by Section 1771.3 of the Labor
Code, and shall be used only for enforcement of prevailing wage
requirements on those projects.

(c) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the
transportation entity may either (1) elect to continue operating an
existing previously approved labor compliance program to monitor
and enforce prevailing wage requirements on the project if it has
not contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or (2) enter into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

begin insert

begin insert SEC. 76. end insert   

end insert

begin insert Section 6823 is added to the end insert begin insert Public Contract Code end insert begin insert ,
to read: end insert

begin insert

begin insert 6823. end insert   

(a) For contracts for public works projects awarded
prior January 1, 2012, a transportation entity authorized to use
the design-build method of procurement shall establish and enforce
a labor compliance program containing the requirements outlined
in Section 1771.5 of the Labor Code or shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to projects where the transportation
entity or design-build entity has entered into any collective
bargaining agreement that binds all of the contractors performing
work on the projects.

(b) For contracts for public works projects awarded on or after
January 1, 2012, the project shall be subject to the requirements
of Section 1771.4 of the Labor Code.

end insert

begin insert

begin insert SEC. 76.5. end insert   

end insert

begin insert Section 6953 of the end insert begin insert Public Contract Code end insert begin insert is
repealed. end insert

begin delete

6953.  

(a) Except as specified in subdivision (b), the San Diego
Association of Governments shall comply with subdivision (f) of
Section 1771.5 of the Labor Code and shall reimburse the
Department of Industrial Relations for its reasonable and directly
related costs of performing prevailing wage monitoring and
enforcement on public works projects pursuant to rates established
by the department as set forth in subdivision (h) of that section on
projects using an alternative project delivery method under this
chapter. All moneys collected pursuant to this subdivision shall
be deposited in the State Public Works Enforcement Fund, created
by Section 1771.3 of the Labor Code, and shall be used only for
enforcement of prevailing wage requirements on those projects.

(b) In lieu of complying with subdivision (a), the San Diego
Association of Governments may elect to enter into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

begin insert

begin insert SEC. 77. end insert   

end insert

begin insert Section 6953 is added to the end insert begin insert Public Contract Code end insert begin insert ,
to read: end insert

begin insert

begin insert 6953. end insert   

Any public works project that is contracted for pursuant
to this chapter shall be subject to the requirements of Section
1771.4 of the Labor Code.

end insert

begin insert

begin insert SEC. 78. end insert   

end insert

begin insert Section 20133 of the end insert begin insert Public Contract Code end insert begin insert is amended
to read: end insert

20133.  

(a) A county, with approval of the board of supervisors,
may utilize an alternative procedure for bidding on construction
projects in the county in excess of two million five hundred
thousand dollars ($2,500,000) and may award the project using
either the lowest responsible bidder or by best value.

(b) (1) It is the intent of the Legislature to enable counties to
utilize design-build for buildings and county sanitation wastewater
treatment facilities. It is not the intent of the Legislature to
authorize this procedure for other infrastructure, including, but not
limited to, streets and highways, public rail transit, or water
resources facilities and infrastructures.

(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles
and responsibilities of each participant in the design-build process.

(3) (A) For contracts for public works projects awarded prior
to begin delete the effective date of regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert if the board of supervisors
elects to proceed under this section, the board of supervisors shall
establish and enforce a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code, or it
shall contract with a third party to operate a labor compliance
program containing the requirements outlined in Section 1771.5
of the Labor Code. This requirement shall not apply to any projects
where the county or the design-build entity has entered into a
collective bargaining agreement that binds all of the contractors
performing work on the projects.

(B) For contracts for public works projects awarded on or after begin delete the effective date of regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the board of supervisors shall reimburse the
department for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects pursuant to rates established by the department as
set forth in subdivision (h) of Section 1771.5 of the Labor Code.
All moneys collected pursuant to this paragraph shall be deposited
in the State Public Works Enforcement Fund created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects. end delete begin insert January 1,
2012, the project shall be subject to the requirements of Section
1771.4 of the Labor Code. end insert

begin delete

(C) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the board
of supervisors may elect to continue operating an existing
previously approved labor compliance program to monitor and
enforce prevailing wage requirements on the project if it has either
not contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

(c) As used in this section:

(1) “Best value” means a value determined by objective criteria
related to price, features, functions, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(4) “Project” means the construction of a building and
improvements directly related to the construction of a building,
and county sanitation wastewater treatment facilities, but does not
include the construction of other infrastructure, including, but not
limited to, streets and highways, public rail transit, or water
resources facilities and infrastructure.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The county shall prepare a set of documents setting
forth the scope of the project. The documents may include, but are
not limited to, the size, type, and desired design character of the
public improvement, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary
plans or building layouts, or any other information deemed
necessary to describe adequately the county’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(B) Any architect or engineer retained by the county to assist
in the development of the project-specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared in paragraph (1), the
county shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the county. The request for proposals shall include,
but is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the county to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the county to evaluate proposals and specifically if the
contract will be awarded to the lowest responsible bidder.

(ii) Significant objective factors that the county reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice-related factors.

(iii) The relative importance of weight assigned to each of the
factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors other than cost or price when
combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the county chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately or incorporate
into the request for proposal applicable rules and procedures to be
observed by the county to ensure that any discussions or
negotiations are conducted in good faith.

(3) (A)  The county shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by
the county. In preparing the questionnaire, the county shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information, including, but not limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete, projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project, as well as a financial
statement that assures the county that the design-build entity has
the capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code,
or the federal Occupational Safety and Health Act of 1970 (Public
Law 91-596), settled against any member of the design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance in which an entity, its owners, officers, or
managing employees submitted a bid on a public works project
and were found to be nonresponsive, or were found by an awarding
body not to be a responsible bidder.

(vii) Any instance in which the entity, or its owners, officers,
or managing employees, defaulted on a construction contract.

(viii) Any violations of the Contractors’ State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of Federal Insurance Contributions Act (FICA; 26 U.S.C. Sec.
3101 et seq.) withholding requirements settled against any member
of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed
by a surety during this period.

(xi) In the case of a partnership or an association that is not a
legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the design-build
contract.

(xii) (I) Any instance in which the entity, or any of its members,
owners, officers, or managing employees was, during the five years
preceding submission of a bid pursuant to this section, determined
by a court of competent jurisdiction to have submitted, or legally
admitted for purposes of a criminal plea to have submitted either
of the following:

(ia) Any claim to any public agency or official in violation of
the federal False Claims Act (31 U.S.C. Sec. 3729 et seq.).

(ib) Any claim to any public official in violation of the
California False Claims Act (Article 9 (commencing with Section
12650) of Chapter 6 of Part 2 of Division 3 of begin insert Title 2 of end insert the
Government Code).

(II) Information provided pursuant to this subdivision shall
include the name and number of any case filed, the court in which
it was filed, and the date on which it was filed. The entity may
also provide further information regarding any such instance,
including any mitigating or extenuating circumstances that the
entity wishes the county to consider.

(B) The information required pursuant to this subdivision shall
be verified under oath by the entity and its members in the manner
in which civil pleadings in civil actions are verified. Information
that is not a public record pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code) shall not be open to public
inspection.

(4) The county shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) A county may use a design-build competition based upon
best value and other criteria set forth in paragraph (2). The
design-build competition shall include the following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design,
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the county shall publicly announce its award,
identifying the contractor to whom the award is made, along with
a written decision supporting its contract award and stating the
basis of the award. The notice of award shall also include the
county’s second and third ranked design-build entities.

(v) For purposes of this paragraph, “skilled labor force
availability” shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the
California Apprenticeship Council, which has graduated
apprentices in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that has been deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s “safety record”
shall be deemed “acceptable” if its experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and its average total recordable injury/illness rate and average lost
work rate for the most recent three-year period does not exceed
the applicable statistical standards for its business category or if
the bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the county.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the county in the design-build package. All
subcontractors bidding on contracts pursuant to this section shall
be afforded the protections contained in Chapter 4 (commencing
with Section 4100) of Part 1. The design-build entity shall do both
of the following:

(1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the county.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) Lists of subcontractors, bidders, and bid awards relating to
the project shall be submitted by the design-build entity to the
awarding body within 14 days of the award. These documents are
deemed to be public records and shall be available for public
inspection pursuant to this chapter and Article 1 (commencing
with Section 6250) of Chapter 3.5 of Division 7 of begin insert Title 1 of end insert the
Government Code.

(h) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the county.

(i) The county may retain the services of a design professional
or construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.

(j) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(k) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(l) (1) If the county elects to award a project pursuant to this
section, retention proceeds withheld by the county from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the county and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build entity, prior to or at the time the bid
is requested, that a bond may be required and the subcontractor
subsequently is unable or refuses to furnish a bond to the
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the county and the design-build entity from any
payment made by the design-build entity to the subcontractor.

(m) Each county that elects to proceed under this section and
uses the design-build method on a public works project shall submit
to the Legislative Analyst’s Office before September 1, 2013, a
report containing a description of each public works project
procured through the design-build process and completed after
November 1, 2009, and before August 1, 2013. The report shall
include, but shall not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) The estimated and actual length of time to complete the
project.

(5) The estimated and actual project costs.

(6) Whether the project was met or altered.

(7) The number and amount of project change orders.

(8) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(9) An assessment of the prequalification process and criteria.

(10) An assessment of the effect of retaining 5 percent retention
on the project.

(11) A description of the Labor Force Compliance Program and
an assessment of the project impact, where required.

(12) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(13) An assessment of the project impact of “skilled labor force
availability.”

(14) An assessment of the design-build dollar limits on county
projects. This assessment shall include projects where the county
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.

(15) An assessment of the most appropriate uses for the
design-build approach.

(n) Any county that elects not to use the authority granted by
this section may submit a report to the Legislative Analyst’s Office
explaining why the county elected not to use the design-build
method.

(o) On or before January 1, 2014, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
counties pursuant to this section, including the information listed
in subdivisions (m) and (p). The report may include
recommendations for modifying or extending this section.

(p) The Legislative Analyst shall complete a fact-based analysis
of the use of the design-build method by counties pursuant to this
section, utilizing the information provided pursuant to subdivision
(m) and any independent information provided by the public or
interested parties. The Legislative Analyst shall select a
representative sample of projects under this section and review
available public records and reports, media reports, and related
information in its analysis. The Legislative Analyst shall compile
the information required to be analyzed pursuant to this subdivision
into a report, which shall be provided to the Legislature. The report
shall include conclusions describing the actual cost of projects
procured pursuant to this section, whether the project schedule
was met or altered, and whether projects needed or used project
change orders.

(q) Except as provided in this section, this act shall not be
construed to affect the application of any other law.

(r) This section shall remain in effect only until July 1, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2016, deletes or extends that date.

begin insert

begin insert SEC. 79. end insert   

end insert

begin insert Section 20175.2 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

20175.2.  

(a) (1) A city, with approval of the appropriate city
council, may utilize an alternative procedure for bidding on
building construction projects in the city in excess of one million
dollars ($1,000,000), except as provided in subdivision (p).

(2) Cities may award the project using either the lowest
responsible bidder or by best value.

(b) (1) It is the intent of the Legislature to enable cities to utilize
cost-effective options for building and modernizing public
facilities. The Legislature also recognizes the national trend,
including authorization in California, to allow public entities to
utilize design-build contracts as a project delivery method. It is
not the intent of the Legislature to authorize this procedure for
transportation facilities, including, but not limited to, roads and
bridges.

(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles
and responsibilities of each participant in the design-build process.
The Legislature also finds that the cost-effective benefits to cities
are achieved by shifting the liability and risk for cost containment
and project completion to the design-build entity.

(3) It is the intent of the Legislature to provide an alternative
and optional procedure for bidding and building construction
projects for cities.

(4) The design-build approach may be used, but is not limited
to use, when it is anticipated that it will: reduce project cost,
expedite project completion, or provide design features not
achievable through the design-bid-build method.

(5) (A) For contracts for public works projects awarded prior
to begin delete the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert if a city council elects to
proceed under this section, the city council shall establish and
enforce a labor compliance program containing the requirements
outlined in Section 1771.5 of the Labor Code, or it shall contract
with a third party to operate a labor compliance program containing
the requirements outlined in Section 1771.5 of the Labor Code.
This requirement shall not apply to any project where the city or
the design-build entity has entered into a collective bargaining
agreement or agreements that bind all of the contractors performing
work on the projects.

(B) For contracts for public works projects awarded on or after begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the city council shall reimburse the department
for its reasonable and directly related costs of performing prevailing
wage monitoring and enforcement on public works projects
pursuant to rates established by the department as set forth in
subdivision (h) of Section 1771.5 of the Labor Code. All moneys
collected pursuant to this paragraph shall be deposited in the State
Public Works Enforcement Fund created by Section 1771.3 of the
Labor Code, and shall be used only for enforcement of prevailing
wage requirements on those projects. end delete begin insert January 1, 2012, the project
shall be subject to the requirements of Section 1771.4 of the Labor
Code. end insert

begin delete

(C) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the city
council may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

(c) As used in this section:

(1) “Best value” means a value determined by objectives relative
to price, features, functions, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services, as needed,
pursuant to a design-build contract.

(4) “Project” means the construction of a building and
improvements directly related to the construction of a building,
but does not include streets and highways, public rail transit, or
water resource facilities and infrastructure.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The city shall prepare a set of documents setting forth
the scope of the project. The documents may include, but are not
limited to, the size, type, and desired design character of the
buildings and site, performance specifications covering the quality
of materials, equipment, and workmanship, preliminary plans or
building layouts, or any other information deemed necessary to
describe adequately the city’s needs. The performance
specifications and any plans shall be prepared by a design
professional who is duly licensed and registered in California.

(B) Any architect or engineer retained by the city to assist in
the development of the project-specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared in paragraph (1), the
city shall prepare a request for proposals that invites interested
parties to submit competitive sealed proposals in the manner
prescribed by the city. The request for proposals shall include, but
is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the city to inform interested parties of the contracting
opportunity, to include the methodology that will be used by the
city to evaluate proposals, and specifically if the contract will be
awarded to the lowest responsible bidder.

(ii) Significant objective factors which the city reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.

(iii) The relative importance or weight assigned to each of the
factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors, other than cost or price, when
combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the city chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately, or incorporate
into the request for proposal, applicable rules and procedures to
be observed by the city to ensure that any discussions or
negotiations are conducted in good faith.

(3) (A) The city shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by
the city. In preparing the questionnaire, the city shall consult with
the construction industry, including representatives of the building
trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project, as well as a financial
statement that assures the city that the design-build entity has the
capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code
or the federal Occupational Safety and Health Act of 1970 (Public
Law 91-596) settled against any member of the design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance where an entity, its owners, officers, or
managing employees submitted a bid on a public works project
and were found to be nonresponsive, or were found by an awarding
body not to be a responsible bidder.

(vii) Any instance where the entity, its owners, officers, or
managing employees defaulted on a construction contract.

(viii) Any violations of the Contractors State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of Federal Insurance Contribution Act begin delete (FICA) end delete begin insert (FICA; 26 U.S.C.
Sec. 3101 et seq.) end insert withholding requirements settled against any
member of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed
by a surety during this period.

(xi) In the case of a partnership or an association that is not a
legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the design-build
contract.

(xii) (I) Any instance in which the entity, or any of its members,
owners, officers, or managing employees was, during the five years
preceding submission of a bid pursuant to this section, determined
by a court of competent jurisdiction to have submitted, or legally
admitted for purposes of a criminal plea to have submitted either
of the following:

(ia) Any claim to any public agency or official in violation of
the federal False Claims Act (31 U.S.C. Sec. 3729 et seq.).

(ib) Any claim to any public official in violation of the
California False Claims Act (Article 9 (commencing with Section
12650) of Chapter 6 of Part 2 of Division 3 of begin insert Title 2 of end insert the
Government Code).

(II) Information provided pursuant to this subdivision shall
include the name and number of any case filed, the court in which
it was filed, and the date on which it was filed. The entity may
also provide further information regarding any such instance,
including any mitigating or extenuating circumstances that the
entity wishes the city to consider.

(B) The information required pursuant to this subdivision shall
be verified under oath by the entity and its members in the manner
in which civil pleadings in civil actions are verified. Information
that is not a public record pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code) shall not be open to public
inspection.

(4) The city shall establish a procedure for final selection of the
design-build entity. Selection shall be based on either of the
following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) The city may use a design-build competition based upon
best value and other criteria set forth in paragraph (2) of
subdivision (d). The design-build competition shall include the
following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the city shall publicly announce its award,
identifying the contractor to whom the award is made, along with
a written decision supporting its contract award and stating the
basis of the award. The notice of award shall also include the city’s
second and third ranked design-build entities.

(v) For purposes of this paragraph, “skilled labor force
availability” shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the
California Apprenticeship Council, which has graduated
apprentices in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that has been deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s “safety record”
shall be deemed “acceptable” if its experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and its average total recordable injury/illness rate and average lost
work rate for the most recent three-year period does not exceed
the applicable statistical standards for its business category, or if
the bidder is a party to an alternative dispute resolution system, as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services and errors and omissions insurance coverage sufficient
to cover all design and architectural services provided in the
contract. This section does not prohibit a general or engineering
contractor from being designated the lead entity on a design-build
entity for the purposes of purchasing necessary bonding to cover
the activities of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the city.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the city in the design-build package. All subcontractors
bidding on contracts pursuant to this section shall be afforded the
protections contained in Chapter 4 (commencing with Section
4100) of Part 1. The design-build entity shall do both of the
following:

(1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the city.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) Lists of subcontractors, bidders, and bid awards relating to
the project shall be submitted by the design-build entity to the
awarding body within 14 days of the award. These documents are
deemed to be public records and shall be available for public
inspection pursuant to this chapter and Article 1 (commencing
with Section 6250) of Chapter 3.5 of Division 7 begin insert of Title 1 end insert of the
Government Code.

(h) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the city.

(i) The city may retain the services of a design professional or
construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.

(j) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(k) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(l) (1) If the city elects to award a project pursuant to this
section, retention proceeds withheld by the city from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the city and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build entity, prior to or at the time the bid
is requested, that a bond may be required and the subcontractor
subsequently is unable or refuses to furnish a bond to the
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the city and the design-build entity from any
payment made by the design-build entity to the subcontractor.

(m) Each city that elects to proceed under this section and uses
the design-build method on a public works project shall submit to
the Legislative Analyst’s Office before December 1, 2014, a report
containing a description of each public works project procured
through the design-build process that is completed after January
1, 2011, and before November 1, 2014. The report shall include,
but shall not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) The estimated and actual project costs.

(5) The estimated and actual length of time to complete the
project.

(6) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(7) An assessment of the prequalification process and criteria.

(8) An assessment of the effect of retaining 5 percent retention
on the project.

(9) A description of the Labor Force Compliance Program and
an assessment of the project impact, where required.

(10) A description of the method used to award the contract. If
the best value method was used, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(11) An assessment of the project impact of “skilled labor force
availability.”

(12) An assessment of the most appropriate uses for the
design-build approach.

(n) Any city that elects not to use the authority granted by this
section may submit a report to the Legislative Analyst’s Office
explaining why the city elected not to use the design-build method.

(o) On or before January 1, 2015, the Legislative Analyst’s
Office shall report to the Legislature on the use of the design-build
method by cities pursuant to this section, including the information
listed in subdivision (m). The report may include recommendations
for modifying or extending this section.

(p) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

(q) Before January 1, 2011, the project limitation of one million
dollars ($1,000,000), as set forth in subdivision (a), shall not apply
to any city in the Counties of Solano and Yolo, or to the Cities of
Stanton and Victorville.

(r) This section shall remain in effect only until January 1, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2016, deletes or extends that date.

begin insert

begin insert SEC. 80. end insert   

end insert

begin insert Section 20193 of the end insert begin insert Public Contract Code end insert begin insert is amended
to read: end insert

20193.  

(a) (1) Notwithstanding any other law and subject to
the limitations of this article, a qualified entity, with approval of
its governing body, may utilize an alternative procedure on bidding
on projects in excess of two million five hundred thousand dollars
($2,500,000).

(2) Only 20 design-build projects shall be authorized under this
article.

(3) A qualified entity may award a project using either the lowest
responsible bidder or by best value.

(4) For purposes of this article, “qualified entity” means an
entity that meets both of the following:

(A) The entity is any of the following:

(i) A city.

(ii) A county.

(iii) A city and county.

(iv) A special district.

(B) The entity operates wastewater facilities, solid waste
management facilities, or water recycling facilities.

(b) (1) For contracts for public works projects awarded prior
to begin delete the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert if a qualified entity elects to
proceed under this section, the qualified entity shall establish and
enforce a labor compliance program containing the requirements
outlined in Section 1771.5 of the Labor Code, or it shall contract
with a third party to operate a labor compliance program containing
the requirements outlined in Section 1771.5 of the Labor Code.
This requirement shall not apply to projects where the qualified
entity or the design-build entity has entered into a collective
bargaining agreement or agreements that bind all of the contractors
performing work on the projects.

(2) For contracts for public works projects awarded on or after
begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the qualified entity shall reimburse the
department for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects pursuant to rates established by the department as
set forth in subdivision (h) of Section 1771.5 of the Labor Code.
All moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects. end delete begin insert January 1,
2012, the project shall be subject to the requirements of Section
1771.4 of the Labor Code. end insert

begin delete

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the qualified
entity may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

(c) As used in this section:

(1) “Best value” means a value determined by objective criteria
related to price, features, functions, small business contracting
plans, past performance, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(4) “Project” means the construction of regional and local
wastewater treatment facilities, regional and local solid waste
facilities, or regional and local water recycling facilities.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The qualified entity shall prepare a set of documents
setting forth the scope of the project. The documents may include,
but are not limited to, the size, type, and desired design character
of the project and site, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary
plans or project layouts, or any other information deemed necessary
to describe adequately the qualified entity’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(B) Any architect or engineer retained by the qualified entity
to assist in the development of the project specific documents shall
not be eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared in paragraph (1), the
qualified entity shall prepare a request for proposals that invites
interested parties to submit competitive sealed proposals in the
manner prescribed by the qualified entity. The request for proposals
shall include, but is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the qualified entity to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the qualified entity to evaluate proposals and specifically
if the contract will be awarded to the lowest responsible bidder.

(ii) Significant factors that the qualified entity reasonably
expects to consider in evaluating proposals, including cost or price
and all nonprice related factors.

(iii) The relative importance of weight assigned to each of the
factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the qualified entity shall specifically
disclose whether all evaluation factors other than cost or price
when combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the qualified entity chooses to reserve the right to hold
discussions or negotiations with responsive bidders, it shall so
specify in the request for proposal and shall publish separately or
incorporate into the request for proposal applicable rules and
procedures to be observed by the qualified entity to ensure that
any discussions or negotiations are conducted in good faith.

(3) (A) The qualified entity shall establish a procedure to
prequalify design-build entities using a standard questionnaire
developed by the qualified entity. In preparing the questionnaire,
the qualified entity shall consult with the construction industry,
including representatives of the building trades and surety industry.
This questionnaire shall require information including, but not
limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project, as well as a financial
statement that assures the special district that the design-build
entity has the capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code
or the federal Occupational Safety and Health Act of 1970 (Public
Law 91-596), settled against any member of the design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance where an entity, its owners, officers, or
managing employees submitted a bid on a public works project
and were found to be nonresponsive, or were found by an awarding
body not to be a responsible bidder.

(vii) Any instance where the entity, its owner, officers, or
managing employees defaulted on a construction contract.

(viii) Any violations of the Contractors’ State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of Federal Insurance Contribution Act (FICA begin insert ; 26 U.S.C. Sec.
3101 et seq. end insert ) withholding requirements settled against any member
of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed
by a surety during this period.

(xi) In the case of a partnership or other association, that is not
a legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be fully liable for the performance under the design-build
contract.

(B) The information required pursuant to this subdivision shall
be verified under oath by the entity and its members in the manner
in which civil pleadings in civil actions are verified. Information
that is not a public record pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code) shall not be open to public
inspection.

(4) The qualified entity shall establish a procedure for final
selection of the design-build entity. Selection shall be based on
either of the following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) A qualified entity may use a design-build competition based
upon best value and other criteria set forth in paragraph (2) of
subdivision (d). The design-build competition shall include the
following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors; price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the qualified entity shall publicly announce
its award, identifying the contractor to which the award is made,
along with a written decision supporting its contract award and
stating the basis of the award. The notice of award shall also
include the qualified entity’s second and third ranked design-build
entities.

(v) For purposes of this paragraph, “skilled labor force
availability” shall be determined by the existence of an agreement
with a registered apprenticeship program, approved by the
California Apprenticeship Council, which has graduated
apprentices in each of the preceding five years. This graduation
requirement shall not apply to programs providing apprenticeship
training for any craft that has been deemed by the Department of
Labor and the Department of Industrial Relations to be an
apprenticeable craft in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s “safety record”
shall be deemed “acceptable” if their experience modification rate
for the most recent three-year period is an average of 1.00 or less,
and their average total recordable injury/illness rate and average
lost work rate for the most recent three-year period does not exceed
the applicable statistical standards for its business category, or if
the bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omissions insurance coverage sufficient
to cover all design and architectural services provided in the
contract. This section does not prohibit a general or engineering
contractor from being designated the lead entity on a design-build
entity for the purposes of purchasing necessary bonding to cover
the activities of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the qualified entity.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the qualified entity in the design-build package. All
subcontractors bidding on contracts pursuant to this section shall
be afforded the protections contained in Chapter 4 (commencing
with Section 4100) of Part 1. The design-build entity shall do both
of the following:

(1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the qualified
entity.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the qualified
entity.

(h) The qualified entity may retain the services of a design
professional or construction project manager, or both, throughout
the course of the project in order to ensure compliance with this
section.

(i) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(k) (1) If the qualified entity elects to award a project pursuant
to this section, retention proceeds withheld by the qualified entity
from the design-build entity shall not exceed 5 percent if a
performance and payment bond, issued by an admitted surety
insurer, is required in the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld may not exceed the percentage specified in the contract
between the qualified entity and the design-build entity. If the
design-build entity provides written notice to any subcontractor
who is not a member of the design-build entity, prior to or at the
time the bid is requested, that a bond may be required and the
subcontractor subsequently is unable or refuses to furnish a bond
to the design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the qualified entity and the design-build entity
from any payment made by the design-build entity to the
subcontractor.

(l) Each qualified entity that elects to proceed under this section
and uses the design-build method on a public works project shall
do both of the following:

(1) Notify the Legislative Analyst’s Office upon initiation of
the project and upon completion of the project.

(2) Submit to the Legislative Analyst’s Office, upon completion
of the project, a report containing a description of the public works
project procured through the design-build process pursuant to this
section and completed after January 1, 2009. The report shall
include, but shall not be limited to, all of the following information:

(A) The type of project.

(B) The gross square footage of the project.

(C) The design-build entity that was awarded the project.

(D) The estimated and actual project costs.

(E) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(F) An assessment of the prequalification process and criteria.

(G) An assessment of the effect of retaining 5-percent retention
on the project.

(H) A description of the Labor Force Compliance Program and
an assessment of the project impact, where required.

(I) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(J) An assessment of the project impact of “skilled labor force
availability.”

(K) An assessment of the most appropriate uses for the
design-build approach.

(m) Any qualified entity that elects not to use the authority
granted by this section may submit a report to the Legislative
Analyst’s Office explaining why the qualified entity elected to not
use the design-build method.

(n) (1) In order to comply with paragraph (2) of subdivision
(a), the Office of Planning and Research is required to maintain
the list of entities that have applied and are eligible to be qualified
for this authority.

(2) Each entity that is interested in proceeding under the
authority in this section must apply to the Office of Planning and
Research.

(A) The application to proceed must be in writing.

(B) An entity must have complied with the California
Environmental Quality Act review process pursuant to Division
13 (commencing with Section 21000) of the Public Resources
Code prior to its application, and must include its approved notice
of determination or notice of completion in its application.

(3) The Office of Planning and Research must approve or deny
an application, in writing, within 30 days. The authority to deny
an application shall only be exercised if the conditions set forth in
either or both paragraph (2) of subdivision (a) and subparagraph
(B) of paragraph (2) of this subdivision have not been satisfied.

(4) An entity utilizing this section must, after it determines it
no longer is interested in using this authority, notify the Office of
Planning and Research in writing within 30 days of its
determination. Upon notification, the Office of Planning and
Research may contact any previous applicants, denied pursuant to
paragraph (2) of subdivision (a), to inform them of the availability
to proceed under this section.

(o) The Legislative Analyst shall report to the Legislature on
the use of the design-build method by qualified entities pursuant
to this section, including the information listed in subdivision (l).
The report may include recommendations for modifying or
extending this section, and shall be submitted on either of the
following dates, whichever occurs first:

(1) Within one year of the completion of the 20 projects, if the
projects are completed prior to January 1, 2019.

(2) No later than January 1, 2020.

begin insert

begin insert SEC. 81. end insert   

end insert

begin insert Section 20209.7 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

20209.7.  

Design-build projects shall progress in a three-step
process, as follows:

(a) The transit operator shall prepare a set of documents setting
forth the scope of the project. The documents shall include, but
are not limited to, the size, type, and desired design character of
the buildings, transit facilities, and site, performance specifications
covering the quality of materials, equipment, and workmanship,
preliminary plans or building layouts, or any other information
deemed necessary to describe adequately the transit operator’s
needs. The performance specifications and any plans shall be
prepared by a design professional duly licensed or registered in
California.

(b) Any architectural or engineering firm or individual retained
by the transit operator to assist in the development criteria or
preparation of the request for proposal (RFP) is not eligible to
participate in the competition for the design-build entity.

(c) (1) For contracts for public works projects awarded prior
to begin delete the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert the transit operator shall
establish and enforce a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code or shall
contract with a third party to operate this labor compliance program
containing the requirements outlined in Section 1771.5 of the Labor
Code. This requirement shall not apply to projects where the transit
operator or the design-build entity has entered into a collective
bargaining agreement that binds all of the contractors performing
work on the project, or to any other project of the transit operator
that is not design-build.

(2) For contracts for public works projects awarded on or after
begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the transit operator shall reimburse the
department for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects pursuant to rates established by the department as
set forth in subdivision (h) of Section 1771.5 of the Labor Code.
All moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects. end delete begin insert January 1,
2012, the project shall be subject to the requirements of Section
1771.4 of the Labor Code. end insert

begin delete

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the transit
operator may elect to continue operating an existing previously
approved labor compliance program to monitor and enforce
prevailing wage requirements on the project if it has either not
contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

(d) (1) Each RFP shall identify the basic scope and needs of
the project or contract, the expected cost range, and other
information deemed necessary by the contracting agency to inform
interested parties of the contracting opportunity.

(2) Each RFP shall invite interested parties to submit competitive
sealed proposals in the manner prescribed by the contracting
agency.

(3) Each RFP shall include a section identifying and describing:

(A) All significant factors that the agency reasonably expects
to consider in evaluating proposals, including cost or price and all
nonprice-related factors.

(B) The methodology and rating or weighting process that will
be used by the agency in evaluating competitive proposals and
specifically whether proposals will be rated according to numeric
or qualitative values.

(C) The relative importance or weight assigned to each of the
factors identified in the RFP. If a nonweighted system is used, the
agency shall specifically disclose whether all evaluation factors
other than cost or price, when combined, are any of the following:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(D) If the contracting agency wishes to reserve the right to hold
discussions or negotiations with offerors, it shall specify the same
in the RFP and shall publish separately or incorporate into the RFP
applicable rules and procedures to be observed by the agency to
ensure that any discussions or negotiations are conducted in a fair
and impartial manner.

(e) (1) The transit operator shall establish a procedure to
prequalify design-build entities using a standard questionnaire
developed by the Director of Industrial Relations. The standardized
questionnaire shall not require prospective bidders to disclose any
violations of Chapter 1 (commencing with Section 1720) of Part
7 of Division 2 of the Labor Code committed prior to January 1,
1998, if the violation was based on a subcontractor’s failure to
comply with these provisions and the bidder had no knowledge of
the subcontractor’s violations and the bidder complied with the
conditions set forth in subdivision (b) of Section 1775 of the Labor
Code. In preparing the questionnaire, the director shall consult
with the construction industry, building trades, transit operators,
and other affected parties. This questionnaire shall require
information relevant to the architecture or engineering firm that
will be the lead on the design-build project. The questionnaire
shall include, but is not limited to, all of the following:

(A) A listing of all the contractors that are part of the
design-build entity.

(B) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete, projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project.

(C) The licenses, registrations, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(D) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance,
as well as a financial statement that assures the transit operator
that the design-build entity has the capacity to complete the project.

(E) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code
or the federal Occupational Safety and Health Act of 1970 (Public
Law 91-596), settled against any member of the design-build entity,
and information concerning a contractor member’s workers’
compensation experience history and worker safety program.

(F) Information concerning any debarment, disqualification, or
removal from a federal, state, or local government public works
project. Any instance where an entity, its owners, officers, or
managing employees submitted a bid on a public works project
and were found by an awarding body not to be a responsible bidder.

(G) Any instance where the entity, its owner, officers, or
managing employees defaulted on a construction contract.

(H) Any violations of the Contractors’ State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), excluding alleged violations of
federal or state law, including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of Federal Insurance Contribution Act (FICA begin insert ; 26 U.S.C. Sec.
3101 et seq. end insert ) withholding requirements settled against any member
of the design-build entity.

(I) Information concerning the bankruptcy or receivership of
any member of the entity, and information concerning all legal
claims, disputes, or lawsuits arising from any construction project
of any member of the entity during the past three years, including
information concerning any work completed by a surety.

(J) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members who will participate as subcontractors in
the design-build contract.

(K) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five-year period
immediately preceding submission of a bid pursuant to this section,
in which the claim, settlement, or judgment exceeds fifty thousand
dollars ($50,000). Information shall also be provided concerning
any work completed by a surety during this period.

(L) In the case of a partnership or other association that is not
a legal entity, a copy of the agreement creating the partnership or
association and specifying that all partners or association members
agree to be liable for full performance under the design-build
contract.

(2) The information required pursuant to this subdivision shall
be verified under oath by the entity and its members in the manner
in which civil pleadings in civil actions are verified. Information
that is not a public record pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code) shall not be open to public
inspection.

(f) The transit operator shall establish a procedure for final
selection of the design-build entity. Selection shall be subject to
the following conditions:

(1) In no case shall the transit operator award a contract to a
design-build entity pursuant to this article for a capital maintenance
or capacity-enhancing rail project unless that project exceeds
twenty-five million dollars ($25,000,000) in cost.

(2) For nonrail transit projects that exceed two million five
hundred thousand dollars ($2,500,000), the transit operator may
award the project to the lowest responsible bidder or by using the
best value method.

(3) For the acquisition and installation of technology applications
or surveillance equipment designed to enhance safety, disaster
preparedness, and homeland security efforts, there shall be no cost
threshold and the transit operator may award the contract to the
lowest responsible bidder or by using the best value method.

(g) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

begin insert

begin insert SEC. 82. end insert   

end insert

begin insert Section 20688.6 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

20688.6.  

(a) (1) Notwithstanding any other law, an agency,
with approval of its duly constituted board in a public hearing,
may utilize an alternative procedure for bidding on projects in the
community in excess of one million dollars ($1,000,000) and may
award the project using either the lowest responsible bidder or by
best value.

(2) Only 10 design-build projects shall be authorized under this
section.

(b) (1) It is the intent of the Legislature to enable entities as
provided in Part 1 (commencing with Section 33000) of Division
24 of the Health and Safety Code to utilize design-build for those
infrastructure improvements authorized in Sections 33421, 33445,
and 33445.1 of the Health and Safety Code and subject to the
limitations on that authority described in Section 33421.1 of the
Health and Safety Code.

(2) The Legislature also finds and declares that utilizing a
design-build contract requires a clear understanding of the roles
and responsibilities of each participant in the design-build process.

(3) (A) For contracts for public works projects awarded prior
to begin delete the effective date of the regulations adopted by the Department
of Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, end delete begin insert January 1, 2012, end insert if the board elects to proceed
under this section, the board shall establish and enforce a labor
compliance program containing the requirements outlined in
Section 1771.5 of the Labor Code, or it shall contract with a third
party to operate a labor compliance program containing the
requirements outlined in Section 1771.5 of the Labor Code. This
requirement shall not apply to projects where the agency or the
design-build entity has entered into a collective bargaining
agreement or agreements that bind all of the contractors performing
work on the projects.

(B) For contracts for public works projects awarded on or after
begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the board shall reimburse the department for
its reasonable and directly related costs of performing prevailing
wage monitoring and enforcement on public works projects
pursuant to rates established by the department as set forth in
subdivision (h) of Section 1771.5 of the Labor Code. All moneys
collected pursuant to this subdivision shall be deposited in the
State Public Works Enforcement Fund, created by Section 1771.3
of the Labor Code, and shall be used only for enforcement of
prevailing wage requirements on those projects. end delete begin insert January 1, 2012,
the project shall be subject to the requirements of Section 1771.4
of the Labor Code. end insert

begin delete

(C) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the board
may elect to continue operating an existing previously approved
labor compliance program to monitor and enforce prevailing wage
requirements on the project if it has either not contracted with a
third party to conduct its labor compliance program and requests
and receives approval from the department to continue its existing
program or it enters into a collective bargaining agreement that
binds all of the contractors performing work on the project and
that includes a mechanism for resolving disputes about the payment
of wages.

end delete

(c) As used in this section:

(1) “Best value” means a value determined by objective criteria
related to price, features, functions, and life-cycle costs.

(2) “Design-build” means a procurement process in which both
the design and construction of a project are procured from a single
entity.

(3) “Design-build entity” means a partnership, corporation, or
other legal entity that is able to provide appropriately licensed
contracting, architectural, and engineering services as needed
pursuant to a design-build contract.

(4) “Project” means those infrastructure improvements
authorized in Sections 33421, 33445, and 33445.1 of the Health
and Safety Code and subject to the limitations and conditions on
that authority described in Article 10 (commencing with Section
33420) and Article 11 (commencing with Section 33430) of
Chapter 4 of Part 1 of Division 24 of the Health and Safety Code.

(d) Design-build projects shall progress in a four-step process,
as follows:

(1) (A) The agency shall prepare a set of documents setting
forth the scope of the project. The documents may include, but are
not limited to, the size, type, and desired design character of the
public improvement, performance specifications covering the
quality of materials, equipment, and workmanship, preliminary
plans or building layouts, or any other information deemed
necessary to describe adequately the agency’s needs. The
performance specifications and any plans shall be prepared by a
design professional who is duly licensed and registered in
California.

(B) Any architect or engineer retained by the agency to assist
in the development of the project specific documents shall not be
eligible to participate in the preparation of a bid with any
design-build entity for that project.

(2) (A) Based on the documents prepared as described in
paragraph (1), the agency shall prepare a request for proposals that
invites interested parties to submit competitive sealed proposals
in the manner prescribed by the agency. The request for proposals
shall include, but is not limited to, the following elements:

(i) Identification of the basic scope and needs of the project or
contract, the expected cost range, and other information deemed
necessary by the agency to inform interested parties of the
contracting opportunity, to include the methodology that will be
used by the agency to evaluate proposals and specifically if the
contract will be awarded to the lowest responsible bidder.

(ii) Significant factors that the agency reasonably expects to
consider in evaluating proposals, including cost or price and all
nonprice-related factors.

(iii) The relative importance of the weight assigned to each of
the factors identified in the request for proposals.

(B) With respect to clause (iii) of subparagraph (A), if a
nonweighted system is used, the agency shall specifically disclose
whether all evaluation factors other than cost or price when
combined are:

(i) Significantly more important than cost or price.

(ii) Approximately equal in importance to cost or price.

(iii) Significantly less important than cost or price.

(C) If the agency chooses to reserve the right to hold discussions
or negotiations with responsive bidders, it shall so specify in the
request for proposal and shall publish separately or incorporate
into the request for proposal applicable rules and procedures to be
observed by the agency to ensure that any discussions or
negotiations are conducted in good faith.

(3) (A) The agency shall establish a procedure to prequalify
design-build entities using a standard questionnaire developed by
the agency. In preparing the questionnaire, the agency shall consult
with the construction industry, including representatives of the
building trades and surety industry. This questionnaire shall require
information including, but not limited to, all of the following:

(i) If the design-build entity is a partnership, limited partnership,
or other association, a listing of all of the partners, general partners,
or association members known at the time of bid submission who
will participate in the design-build contract, including, but not
limited to, mechanical subcontractors.

(ii) Evidence that the members of the design-build entity have
completed, or demonstrated the experience, competency, capability,
and capacity to complete, projects of similar size, scope, or
complexity, and that proposed key personnel have sufficient
experience and training to competently manage and complete the
design and construction of the project, as well as a financial
statement that assures the agency that the design-build entity has
the capacity to complete the project.

(iii) The licenses, registration, and credentials required to design
and construct the project, including information on the revocation
or suspension of any license, credential, or registration.

(iv) Evidence that establishes that the design-build entity has
the capacity to obtain all required payment and performance
bonding, liability insurance, and errors and omissions insurance.

(v) Any prior serious or willful violation of the California
Occupational Safety and Health Act of 1973, contained in Part 1
(commencing with Section 6300) of Division 5 of the Labor Code,
or the federal Occupational Safety and Health Act of 1970 (Public
Law 91-596), settled against any member of the design-build entity,
and information concerning workers’ compensation experience
history and worker safety program.

(vi) Information concerning any debarment, disqualification,
or removal from a federal, state, or local government public works
project. Any instance in which an entity, its owners, officers, or
managing employees submitted a bid on a public works project
and were found to be nonresponsive, or were found by an awarding
body not to be a responsible bidder.

(vii) Any instance in which the entity, or its owners, officers,
or managing employees, defaulted on a construction contract.

(viii) Any violations of the Contractors’ State License Law
(Chapter 9 (commencing with Section 7000) of Division 3 of the
Business and Professions Code), including alleged violations of
federal or state law including the payment of wages, benefits,
apprenticeship requirements, or personal income tax withholding,
or of Federal Insurance Contributions Act (FICA begin insert ; 26 U.S.C. Sec.
3101 et seq. end insert ) withholding requirements settled against any member
of the design-build entity.

(ix) Information concerning the bankruptcy or receivership of
any member of the design-build entity, including information
concerning any work completed by a surety.

(x) Information concerning all settled adverse claims, disputes,
or lawsuits between the owner of a public works project and any
member of the design-build entity during the five years preceding
submission of a bid pursuant to this section, in which the claim,
settlement, or judgment exceeds fifty thousand dollars ($50,000).
Information shall also be provided concerning any work completed
by a surety during this period.

(xi) In the case of a partnership, joint venture, or an association
that is not a legal entity, a copy of the agreement creating the
partnership or association and specifying that all general partners,
joint venturers, or association members agree to be fully liable for
the performance under the design-build contract.

(B) The information required pursuant to this subdivision shall
be verified under oath by the entity and its members in the manner
in which civil pleadings in civil actions are verified. Information
that is not a public record pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code) shall not be open to public
inspection.

(4) The agency shall establish a procedure for final selection of
the design-build entity. Selection shall be based on either of the
following criteria:

(A) A competitive bidding process resulting in lump-sum bids
by the prequalified design-build entities. Awards shall be made to
the lowest responsible bidder.

(B) An agency may use a design-build competition based upon
best value and other criteria set forth in paragraph (2). The
design-build competition shall include the following elements:

(i) Competitive proposals shall be evaluated by using only the
criteria and selection procedures specifically identified in the
request for proposal. However, the following minimum factors
shall each represent at least 10 percent of the total weight of
consideration given to all criteria factors: price, technical design
and construction expertise, life-cycle costs over 15 years or more,
skilled labor force availability, and acceptable safety record.

(ii) Once the evaluation is complete, the top three responsive
bidders shall be ranked sequentially from the most advantageous
to the least.

(iii) The award of the contract shall be made to the responsible
bidder whose proposal is determined, in writing, to be the most
advantageous.

(iv) Notwithstanding any provision of this code, upon issuance
of a contract award, the agency shall publicly announce its award,
identifying the contractor to whom the award is made, along with
a written decision supporting its contract award and stating the
basis of the award. The notice of award shall also include the
agency’s second- and third-ranked design-build entities.

(v) For purposes of this paragraph, skilled labor force availability
shall be determined by the existence of an agreement with a
registered apprenticeship program, approved by the California
Apprenticeship Council, which has graduated apprentices in each
of the preceding five years. This graduation requirement shall not
apply to programs providing apprenticeship training for any craft
that has been deemed by the Department of Labor and the
Department of Industrial Relations to be an apprenticeable craft
in the five years prior to enactment of this act.

(vi) For purposes of this paragraph, a bidder’s safety record
shall be deemed acceptable if its experience modification rate for
the most recent three-year period is an average of 1.00 or less, and
its average total recordable injury/illness rate and average lost
work rate for the most recent three-year period does not exceed
the applicable statistical standards for its business category or if
the bidder is a party to an alternative dispute resolution system as
provided for in Section 3201.5 of the Labor Code.

(e) (1) Any design-build entity that is selected to design and
build a project pursuant to this section shall possess or obtain
sufficient bonding to cover the contract amount for nondesign
services, and errors and omission insurance coverage sufficient to
cover all design and architectural services provided in the contract.
This section does not prohibit a general or engineering contractor
from being designated the lead entity on a design-build entity for
the purposes of purchasing necessary bonding to cover the activities
of the design-build entity.

(2) Any payment or performance bond written for the purposes
of this section shall be written using a bond form developed by
the agency.

(f) All subcontractors that were not listed by the design-build
entity in accordance with clause (i) of subparagraph (A) of
paragraph (3) of subdivision (d) shall be awarded by the
design-build entity in accordance with the design-build process
set forth by the agency in the design-build package. All
subcontractors bidding on contracts pursuant to this section shall
be afforded the protections contained in Chapter 4 (commencing
with Section 4100) of Part 1. The design-build entity shall do both
of the following:

(1) Provide public notice of the availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the agency.

(2) Provide a fixed date and time on which the subcontracted
work will be awarded in accordance with the procedure established
pursuant to this section.

(g) The minimum performance criteria and design standards
established pursuant to paragraph (1) of subdivision (d) shall be
adhered to by the design-build entity. Any deviations from those
standards may only be allowed by written consent of the agency.

(h) The agency may retain the services of a design professional
or construction project manager, or both, throughout the course of
the project in order to ensure compliance with this section.

(i) Contracts awarded pursuant to this section shall be valid until
the project is completed.

(j) Nothing in this section is intended to affect, expand, alter,
or limit any rights or remedies otherwise available at law.

(k) (1) If the agency elects to award a project pursuant to this
section, retention proceeds withheld by the agency from the
design-build entity shall not exceed 5 percent if a performance and
payment bond, issued by an admitted surety insurer, is required in
the solicitation of bids.

(2) In a contract between the design-build entity and the
subcontractor, and in a contract between a subcontractor and any
subcontractor thereunder, the percentage of the retention proceeds
withheld shall not exceed the percentage specified in the contract
between the agency and the design-build entity. If the design-build
entity provides written notice to any subcontractor who is not a
member of the design-build entity, prior to or at the time the bid
is requested, that a bond may be required and the subcontractor
subsequently is unable or refuses to furnish a bond to the
design-build entity, then the design-build entity may withhold
retention proceeds in excess of the percentage specified in the
contract between the agency and the design-build entity from any
payment made by the design-build entity to the subcontractor.

(l) Each agency that elects to proceed under this section and
uses the design-build method on a public works project shall submit
to the Legislative Analyst’s Office before December 1, 2014, a
report containing a description of each public works project
procured through the design-build process after January 1, 2010,
and before November 1, 2014. The report shall include, but shall
not be limited to, all of the following information:

(1) The type of project.

(2) The gross square footage of the project.

(3) The design-build entity that was awarded the project.

(4) Where appropriate, the estimated and actual length of time
to complete the project.

(5) The estimated and actual project costs.

(6) A description of any written protests concerning any aspect
of the solicitation, bid, proposal, or award of the design-build
project, including the resolution of the protests.

(7) An assessment of the prequalification process and criteria.

(8) An assessment of the effect of retaining 5-percent retention
on the project.

(9) A description of the labor force compliance program and an
assessment of the project impact, where required.

(10) A description of the method used to award the contract. If
best value was the method, the report shall describe the factors
used to evaluate the bid, including the weighting of each factor
and an assessment of the effectiveness of the methodology.

(11) An assessment of the project impact of skilled labor force
availability.

(12) An assessment of the design-build dollar limits on agency
projects. This assessment shall include projects where the agency
wanted to use design-build and was precluded by the dollar
limitation. This assessment shall also include projects where the
best value method was not used due to dollar limitations.

(13) An assessment of the most appropriate uses for the
design-build approach.

(m) (1) In order to comply with paragraph (2) of subdivision
(a), the State Public Works Board is required to maintain the list
of agencies that have applied and are eligible to be qualified for
this authority.

(2) Each agency that is interested in proceeding under the
authority in this section must apply to the State Public Works
Board. The application to proceed shall be in writing and contain
such information that the State Public Works Board may require.

(3) The State Public Works Board shall approve or deny an
application, in writing, within 90 days of the submission of a
complete application. The authority to deny an application shall
only be exercised if the condition set forth in paragraph (2) of
subdivision (a) has been satisfied.

(4) An agency that has applied for this authorization shall, after
it determines it no longer is interested in using this authority, notify
the State Public Works Board in writing within 30 days of its
determination. Upon notification, the State Public Works Board
may contact any previous applicants, denied pursuant to paragraph
(2) of subdivision (a), to inform them of the availability to proceed
under this section.

(5) The State Public Works Board may authorize no more than
10 projects. The board shall not authorize or approve more than
two projects for any one eligible redevelopment agency that
submits a completed application.

(6) The State Public Works Board shall notify the Legislative
Analyst’s Office when 10 projects have been approved.

(n) On or before January 1, 2015, the Legislative Analyst shall
report to the Legislature on the use of the design-build method by
agencies pursuant to this section, including the information listed
in subdivision (l). The report may include recommendations for
modifying or extending this section.

(o) Except as provided in this section, nothing in this act shall
be construed to affect the application of any other law.

(p) This section shall remain in effect only until January 1, 2016,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2016, deletes or extends that date.

begin insert

begin insert SEC. 83. end insert   

end insert

begin insert Section 20919.3 of the end insert begin insert Public Contract Code end insert begin insert is
amended to read: end insert

20919.3.  

(a) (1) For contracts for public works projects
awarded prior to begin delete the effective date of the regulations adopted by
the Department of Industrial Relations pursuant to subdivision (g)
of Section 1771.5 of the Labor Code, end delete begin insert January 1, 2012, end insert the unified
school district shall establish and enforce for job order contracts
a labor compliance program containing the requirements outlined
in Section 1771.5 of the Labor Code, or it shall contract with a
third party to operate a labor compliance program containing the
requirements outlined in that provision. This requirement does not
apply to any project where the unified school district or the job
order contractor has entered into a collective bargaining agreement
or agreements that bind all of the contractors performing work on
the projects.

(2) For contracts for public works projects awarded on or after
begin delete the effective date of the regulations adopted by the Department of
Industrial Relations pursuant to subdivision (g) of Section 1771.5
of the Labor Code, the unified school district shall reimburse the
department for its reasonable and directly related costs of
performing prevailing wage monitoring and enforcement on public
works projects pursuant to rates established by the department as
set forth in subdivision (h) of Section 1771.5 of the Labor Code.
All moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects. end delete begin insert January 1,
2012, the project shall be subject to the requirements of Section
1771.4 of the Labor Code. end insert

begin delete

(3) In lieu of reimbursing the Department of Industrial Relations
for its reasonable and directly related costs of performing
monitoring and enforcement on public works projects, the unified
school district may elect to continue operating an existing
previously approved labor compliance program to monitor and
enforce prevailing wage requirements on the project if it has either
not contracted with a third party to conduct its labor compliance
program and requests and receives approval from the department
to continue its existing program or it enters into a collective
bargaining agreement that binds all of the contractors performing
work on the project and that includes a mechanism for resolving
disputes about the payment of wages.

end delete

(b) The unified school district shall prepare an execution plan
for all modernization projects that may be eligible for job order
contracting pursuant to this article. The unified school district shall
select from that plan a sufficient number of projects to be initiated
as job order contracts during each calendar year and shall determine
for each selected project that job order contracting will reduce the
total cost of that project. Job order contracting shall not be used if
the unified school district finds that it will increase the total cost
of the project.

(c) No later than June 30, 2017, the unified school district shall
submit an interim report on all job order contract projects
completed by December 31, 2016, to the Office of Public School
Construction in the Department of General Services and the Senate
Committee on Business, Professions and Economic Development
and the Assembly Committee on Business, Professions and
Consumer Protection and the Senate and Assembly Committees
on Education. The interim report shall be prepared by an
independent third party and the unified school district shall pay
for the cost of the report. The report shall include the information
specified in subdivisions (a) through (h) of Section 20919.12.

begin insert

begin insert SEC. 84. end insert   

end insert

begin insert Section 100152 of the end insert begin insert Public Utilities Code end insert begin insert is
repealed. end insert

begin delete

100152.  

(a) Except as specified in subdivision (b), the authority
shall comply with subdivision (f) of Section 1771.5 of the Labor
Code and shall reimburse the Department of Industrial Relations
for its reasonable and directly related costs of performing prevailing
wage monitoring and enforcement on public works projects
pursuant to rates established by the department as set forth in
subdivision (h) of Section 1771.5 of the Labor Code on projects
using the CMGC project delivery method under this article. All
moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund, created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects.

(b) In lieu of complying with subdivision (a), the authority may
elect to enter into a collective bargaining agreement that binds all
of the contractors performing work on the project and that includes
a mechanism for resolving disputes about the payment of wages.

end delete

begin insert

begin insert SEC. 85. end insert   

end insert

begin insert Section 100152 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

begin insert

begin insert 100152. end insert   

Any public works project that is contracted for
pursuant to this article shall be subject to the requirements of
Section 1771.4 of the Labor Code.

end insert

begin insert

begin insert SEC. 86. end insert   

end insert

begin insert Section 103396 of the end insert begin insert Public Utilities Code end insert begin insert is
repealed. end insert

begin delete

103396.  

(a) Except as specified in subdivision (b), the district
shall comply with subdivision (f) of Section 1771.5 of the Labor
Code and shall reimburse the Department of Industrial Relations
for its reasonable and directly related costs of performing prevailing
wage monitoring and enforcement on public works projects
pursuant to rates established by the department as set forth in
subdivision (h) of Section 1771.5 of the Labor Code on projects
using the CMGC project delivery method under this article. All
moneys collected pursuant to this subdivision shall be deposited
in the State Public Works Enforcement Fund, created by Section
1771.3 of the Labor Code, and shall be used only for enforcement
of prevailing wage requirements on those projects.

(b) In lieu of complying with subdivision (a), the district may
elect to enter into a collective bargaining agreement that binds all
of the contractors performing work on the project and that includes
a mechanism for resolving disputes about the payment of wages.

end delete

begin insert

begin insert SEC. 87. end insert   

end insert

begin insert Section 103396 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

begin insert

begin insert 103396. end insert   

Any public works project that is contracted for
pursuant to this article shall be subject to the requirements of
Section 1771.4 of the Labor Code.

end insert

begin insert

begin insert SEC. 88. end insert   

end insert

begin insert Section 75.70 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

75.70.  

(a) Notwithstanding any other law, for the 1983-84
fiscal year, each county auditor shall allocate to all elementary,
high school, and unified school districts within the county in
proportion to each school district’s average daily attendance, as
certified by the Superintendent of Public Instruction for purposes
of the advance apportionment of state aid in the then current fiscal
year, without respect to the allocation of property tax revenues
pursuant to Chapter 6 (commencing with Section 95) of Part 0.5,
and without respect to allocation and payment of funds as provided
for in subdivision (b) of Section 33670 of the Health and Safety
Code, an amount equal to the additional revenues generated by
the rate levied pursuant to subdivision (a) of Section 1 of Article
XIII A of the California Constitution applied to the increased
assessments for the current roll under this chapter. Additional
revenues generated by a rate or rates levied in excess of the
limitation prescribed by subdivision (a) of Section 1 of Article
XIII A of the California Constitution shall be allocated to the fund
for which the tax rate or rates were levied.

(b) For the 1984-85 fiscal year, the county auditor shall, without
respect to the allocation of property tax revenues pursuant to
Chapter 6 (commencing with Section 95) of Part 0.5, do all of the
following:

(1) Make the allocation and payment of funds as provided in
Section 33670 of the Health and Safety Code.

(2) Allocate to the county the amount determined pursuant to
Section 75.60.

(3) Allocate to the county an amount equal to the total amount
of additional revenues generated by the rate levied pursuant to
subdivision (a) of Section 1 of Article XIII A of the California
Constitution applied to the increased assessments under this
chapter, less the amount determined pursuant to paragraphs (1)
and (2), the remainder multiplied by the county’s property tax
apportionment factor determined pursuant to Section 97.5.

(4) Allocate to each community college district and county
superintendent of schools within the county an amount equal to
the total amount of additional revenues generated by the rate levied
pursuant to subdivision (a) of Section 1 of Article XIII A of the
California Constitution applied to the increased assessments under
this chapter, less the amount determined pursuant to paragraphs
(1) and (2), the remainder multiplied by each county superintendent
of schools’ and community college district’s property tax
apportionment factor determined pursuant to Section 97.5.

(5) Allocate to each city within the county an amount equal to
the total amount of additional revenue generated by the rate levied
pursuant to subdivision (a) of Section 1 of Article XIII A of the
California Constitution applied to the increased assessments under
this chapter, less the amount determined pursuant to paragraphs
(1) and (2), the remainder multiplied by each city’s property tax
apportionment factor determined pursuant to Section 97.5.

(6) Allocate to each special district within the county an amount
equal to the total amount of additional revenues generated by the
rate levied pursuant to subdivision (a) of Section 1 of Article XIII A
of the California Constitution applied to the increased assessments
under this chapter, less the amount determined pursuant to
paragraphs (1) and (2), the remainder multiplied by each special
district’s property tax apportionment factor determined pursuant
to Section 97.5. The amount allocated to each special district which
is governed by the board of supervisors of a county or whose
governing board is the same as the board of supervisors of a county,
shall be subject to Section 98.6.

(7) Allocate the remaining revenues generated by the rate levied
pursuant to subdivision (a) of Section 1 of Article XIII A of the
California Constitution applied to the increased assessments under
this chapter to all elementary, high school, and unified school
districts within the county in proportion to each school district’s
average daily attendance, as certified by the Superintendent of
Public Instruction for purposes of the advance apportionment of
state aid in the then current fiscal year.

(8) Allocate additional revenues generated by a rate levied in
excess of the limitation prescribed by subdivision (a) of Section
1 of Article XIII A of the California Constitution to the fund or
funds for which the tax rate or rates were levied.

These allocations shall be made on a timely basis but no later
than 30 calendar days after the close of the preceding monthly or
four-weekly accounting period.

(c) For the 1985-86 fiscal year, and each fiscal year thereafter,
the county auditor shall, without respect to the allocation of
property tax revenues pursuant to Chapter 6 (commencing with
Section 95) of Part 0.5, do all of the following:

(1) Make the allocation and payment of funds as provided in
Section 33670 of the Health and Safety Code.

(2) Allocate and pay to the county an amount equal to the total
amount of additional revenues generated by the rate levied pursuant
to subdivision (a) of Section 1 of Article XIII A of the California
Constitution applied to the increased assessments under this
chapter, less the amount determined pursuant to paragraph (1), the
remainder multiplied by the county’s property tax apportionment
factor determined pursuant to Section begin delete 97.5. end delete begin insert 96.2. end insert

(3) Allocate and pay to each county superintendent of schools
and community college district within the county an amount equal
to the total amount of additional revenues generated by the rate
levied pursuant to subdivision (a) of Section 1 of Article XIII A
of the California Constitution applied to the increased assessments
under this chapter, less the amount determined pursuant to
paragraph (1), the remainder multiplied by each county
superintendent of schools’ and community college district’s
property tax apportionment factor determined pursuant to Section
begin delete 97.5. end delete begin insert 96.2. end insert

(4) Allocate and pay to each city within the county an amount
equal to the total amount of additional revenues generated by the
rate levied pursuant to subdivision (a) of Section 1 of Article XIII A
of the California Constitution applied to the increased assessments
under this chapter, less the amount determined pursuant to
paragraph (1), the remainder multiplied by each city’s property
tax apportionment factor determined pursuant to Section begin delete 97.5. end delete
begin insert 96.2. end insert

(5) Allocate and pay to each special district within the county
an amount equal to the total amount of additional revenues
generated by the rate levied pursuant to subdivision (a) of Section
1 of Article XIII A of the California Constitution applied to the
increased assessments under this chapter, less the amount
determined pursuant to paragraph (1), the remainder multiplied
by each special district’s property tax apportionment factor
determined pursuant to Section begin delete 97.5. end delete begin insert 96.2. end insert The amount allocated
to each special district which is governed by the board of
supervisors of a county or whose governing body is the same as
the board of supervisors of a county, shall be subject to Section
98.6.

(6) Allocate and pay the remaining revenues generated by the
rate levied pursuant to subdivision (a) of Section 1 of Article XIII A
of the California Constitution applied to the increased assessments
under this chapter to all elementary, high school, and unified school
districts within the county in proportion to each school district’s
average daily attendance, as certified by the Superintendent of
Public Instruction for the purposes of the advance apportionment
of state aid in the then current fiscal year.

(7) Allocate and pay additional revenues generated by a rate
levied in excess of the limitation prescribed by subdivision (a) of
Section 1 of Article XIII A of the California Constitution to the
fund or funds for which the tax rate or rates were levied.

These allocations and payments shall be made on a timely basis
but no later than 30 calendar days after the close of the preceding
monthly or four-weekly accounting period. For a county with a
population of 500,000 or less, the allocations may be made on a
biannual basis.

(d) For purposes of the certification made by the Superintendent
of Public Instruction pursuant to begin insert paragraph (6) of end insert subdivision begin delete (a), end delete
begin insert (c), end insert the average daily attendance of the following school districts
shall be deemed to be zero:

(1) In the case of multicounty school districts, the portions of
the school districts located other than in the county of control.

(2) A school district that is an excess tax school entity, as
defined in subdivision (n) of Section 95, in the prior fiscal year.

(e) The Superintendent of Public Instruction shall certify the
appropriate counts of average daily attendance pursuant to
subdivision (a) to each county auditor no later than July 15 of each
applicable fiscal year.

begin insert

(f) If the average daily attendance of all elementary, high school,
and unified school districts within the county is deemed to be zero
by the Superintendent of Public Instruction pursuant to subdivision
(d), the county auditor shall reallocate the revenues described in
paragraph (6) of subdivision (c) to the entities listed in paragraphs
(2) to (5), inclusive, of subdivision (c), in proportion to each
entity’s percentage of revenues in comparison to the aggregate
total of revenues.

end insert begin delete

(f)

end delete

begin insert (g) end insert  On or before November 15 and April 15, the auditor of each
county shall furnish to the Superintendent of Public Instruction
the estimated amount of tax receipts pursuant to this section of
each school district situated within his or her county.

begin delete

(g)

end delete

begin insert (h) end insert  In the event property tax revenues under this chapter are
generated by a change in ownership or completed new construction
which occurred on or before May 31, 1984, but are collected
subsequent to the 1983-84 fiscal year, the revenues for the current
roll shall be allocated to school districts as if they had been
collected and allocated during this 1983-84 fiscal year. Any of
the aforementioned revenues which are collected in the 1984-85
fiscal year shall be applied to school apportionments for the
1984-85 fiscal year.

begin insert

begin insert SEC. 89. end insert   

end insert

begin insert Section 95.5 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 95.5. end insert   

(a) The Legislature finds and declares all of the
following:

(1) In recognition of the fact that over 50 percent of annual
property tax revenues accrue to K-14 schools and county offices
of education, and thereby help to offset the state’s General Fund
obligation to those entities, the state has a vested financial interest
in ensuring that county assessors have the resources necessary to
fairly and efficiently administer the county property tax rolls. Fair
and efficient administration includes, but is not limited to, the
expeditious enrollment of properties that are newly constructed
or that change ownership, the timely levying of supplemental
assessments when ownership changes occur, the timely
reassessment of property to reflect market values, and the defense
of assessed valuations that county assessors believe have been
improperly appealed.

(2) It is the intent of the Legislature to establish a three-year
pilot program limited to nine competitively selected county
assessors’ offices to quantify the benefit of providing county
assessors with state grants to improve their ability to discharge
these, and related essential duties.

(3) The success of the pilot program shall be determined based
on whether the assessment activities funded with pilot program
funds in each county have enhanced countywide equalization by
properly valuing property, and have thereby generated property
tax revenues for K-14 schools and county offices of education in
an amount that is not less than the total amount of General Fund
revenues expended to fund the pilot program in each participating
county.

(b) For the 2014-15 fiscal year to the 2016-17 fiscal year,
inclusive, there is hereby created the State-County Assessors’
Partnership Agreement Program, to be administered by the
Department of Finance.

(1) Program funding shall be subject to appropriation in the
annual Budget Act. The program shall be inoperative in any fiscal
year in which an appropriation is not provided.

(2) Each participating county shall annually match, on a
dollar-for-dollar basis, the program funds apportioned to their
county assessor’s office.

(3) Program funds provided to participating county assessors
shall be used to supplement, and not supplant, existing funding.
For purposes of this paragraph, base staffing and funding levels
shall be calculated as of June 30, 2014, unless otherwise authorized
by the Department of Finance.

(4) (A) The costs paid under the program shall be both of the
following:

(i) Actual administrative costs for purposes of Section 75.60.

(ii) Property tax administrative costs for purposes of Section
95.3.

(B) For purposes of this paragraph, “costs paid under the
program” includes both of the following:

(i) Program funds provided to participating county assessor’s
offices by the state.

(ii) Matching funds provided by the county.

(c) All counties shall be eligible to apply to participate in the
program. However, the Department of Finance shall limit program
participation as follows:

(1) (A) No more than two program participants shall be selected
from counties of the first or second class, inclusive, as defined in
Sections 28022 and 28023 of the Government Code.

(B) Each county selected from within the classes specified in
subparagraph (A) shall be eligible to receive at least 25 percent
of the amount annually appropriated for the program, not to exceed
one million eight hundred seventy-five thousand dollars
($1,875,000).

(C) If the number of approved program participants is not
sufficient to meet the number of participants allowed under
subparagraph (A), the number of program participants under
subparagraph (A) of paragraph (2) may be increased by the
remaining number of participants from this paragraph. The
remaining funds will be added to the funds available within
subparagraph (B) of paragraph (2) so that the total program funds
will be available for distribution equally among the participants
in paragraph (2).

(2) (A) No more than four program participants shall be
selected from counties of the third to 12th classes, inclusive, as
defined in Sections 28024 to 28033, inclusive, of the Government
Code.

(B) Each county selected from within the classes specified in
subparagraph (A) shall be eligible to receive at least 11 percent
of the amount annually appropriated for the program, not to exceed
eight hundred twenty-five thousand dollars ($825,000).

(C) If the number of approved program participants is not
sufficient to meet the number of participants allowed under
subparagraph (A), the number of program participants under
subparagraph (A) of paragraph (3) may be increased by the
remaining number of participants from this paragraph. The
remaining funds will be added to the funds available within
subparagraph (B) of paragraph (3) so that the total program funds
set aside will be available for distribution equally among the
participants in paragraph (3).

(3) (A) No more than three program participants shall be
selected from counties of the 13th to 58th classes, inclusive, as
defined in Sections 28034 to 28079, inclusive, of the Government
Code.

(B) Each county selected from within the classes specified in
subparagraph (A) shall be eligible to receive at least 2 percent of
the amount annually appropriated for the program, not to exceed
one hundred fifty thousand dollars ($150,000).

(4) County populations for purposes of this subdivision shall
be determined based on the most recent January estimate by the
population research unit of the Department of Finance.

(d) County assessors’ offices that elect to apply to participate
in the program shall do all the following on or before September
15, 2014:

(1) Transmit to the Department of Finance a resolution of the
county board of supervisors that states the county agrees to provide
the assessor’s office with matching funds, on a dollar-for-dollar
basis, in each year that the assessor’s office participates in the
program.

(2) Submit to the Department of Finance an application, in the
form and manner specified by Department of Finance. The
Department of Finance may reject applications not received by
the specified date. At a minimum, the application shall include the
following:

(A) The staff the county assessor proposes to fund using program
funds and matching county funds.

(B) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (A) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (A) of
paragraph (1) of subdivision (f).

(ii) The estimated countywide backlog of newly constructed real
property that has not yet been enrolled and the estimated rate at
which the staff identified in subparagraph (A) will enroll that
property.

(C) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (B) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (B) of
paragraph (1) of subdivision (f).

(ii) The estimated countywide backlog of real property that has
changed ownership and not yet been reassessed and the estimated
dollar value of that real property.

(D) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (C) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (C) of
paragraph (1) of subdivision (f).

(ii) The estimated countywide backlog of supplemental
assessments that have not been issued and the estimated dollar
value of those assessments.

(E) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (D) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (D) of
paragraph (1) of subdivision (f).

(ii) The estimated countywide backlog of real properties that
have not been reassessed upon modification and the estimated
dollar value that those modifications will add to the county
property tax roll.

(F) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (E) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (E) of
paragraph (1) of subdivision (f).

(ii) The estimated countywide backlog of escaped assessments
and the estimated dollar value of those assessments.

(G) The estimated value that the staff identified in subparagraph
(A) will add to the county property tax roll pursuant to work
performed in accordance with subparagraph (F) of paragraph (1)
of subdivision (f). This information shall be provided for each of
the three fiscal years that the program is authorized to operate.
The application shall separately state each of the following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (F) of
paragraph (1) of subdivision (f).

(ii) The estimated countywide backlog of properties that have
not been reassessed to market value subsequent to having their
assessed values reduced and the estimated dollar value of those
reassessments.

(H) The estimated number of assessment appeals to which the
staff identified in subparagraph (A) will respond in accordance
with subparagraph (G) of paragraph (1) of subdivision (f). This
information shall be provided for each of the three fiscal years
that the program is authorized to operate. The application shall
separately state each of the following:

(i) The dollar value retained on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (G) of
paragraph (1) of subdivision (f).

(ii) The number of assessment appeals to which the county
assessor was unable to respond due to staffing shortages in the
2013-14 fiscal year, and the dollar amount by which the county
property tax roll was consequently reduced.

(I) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (H) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s office staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (H) of
paragraph (1) of subdivision (f).

(ii) The estimated amount resulting in change to the county
property tax roll due to additional audits completed pursuant to
Sections 469 and 470 and the estimated dollar value of those
assessments.

(J) The estimated value that the staff identified in subparagraph
(A) will result in a change to the county property tax roll pursuant
to work performed in accordance with subparagraph (I) of
paragraph (1) of subdivision (f). This information shall be provided
for each of the three fiscal years that the program is authorized
to operate. The application shall separately state each of the
following:

(i) The dollar value changed on the county property tax roll by
county assessor’s staff in the 2013-14 fiscal year through
performance of the tasks described in subparagraph (I) of
paragraph (1) of subdivision (f).

(ii) The estimated amount resulting in a change to the county
property tax roll due to discovering taxable property pursuant to
Sections 405 and 531, the estimated dollar value of those
assessments, and the estimated rate at which the staff identified
in subparagraph (A) will issue those assessments.

(K) State the amount of program funds and county matching
funds that the county assessor proposes to expend for each of
paragraphs (2) and (3) of subdivision (f).

(e) (1) The Department of Finance shall review the applications,
select the program participants on the strength of those
applications, and notify the participants of their selection no later
than October 15, 2014. No later than October 22, 2014, and each
October 22 thereafter while the program is operative, the
Department of Finance shall instruct the office of the State
Controller to remit to each participating county the appropriate
sum in accordance with subdivision (c).

(2) It is the intent of the Legislature that the Department of
Finance seek to ensure that the applicants selected to participate
in the program consist of a representative cross section of the
state’s county assessor’s offices. Therefore, it is the intent of the
Legislature that the Department of Finance consider factors other
than revenue generating potential when reviewing applications.

(f) County assessors’ offices shall use program funds only for
the following purposes, provided that the funds may be used for
additional, related purposes upon the receipt of specific
authorization from the Department of Finance:

(1) The payment of salaries and benefits to assessor’s office
staff hired or otherwise funded subsequent to the Department of
Finance’s approval of the assessor’s program participation
application pursuant to subdivision (d), to assist with the following
activities:

(A) Assessing and enrolling newly constructed real property.

(B) Reassessing real property that has changed ownership.

(C) Processing supplemental assessments for real property that
has changed ownership.

(D) Reassessing existing real property that has been modified
in a way that changes its current assessed value.

(E) Reassessing real and personal property that has escaped
assessment, as defined in Section 531.

(F) Reassessing to current market value those real properties
for which the county assessor previously reduced the assessed
valuation pursuant to subdivision (b) of Section 2 of Article XIII
A of the Constitution.

(G) Responding to real property assessment appeals pursuant
to Part 3 (commencing with Section 1601) of Division 1.

(H) Conducting property tax audits pursuant to Sections 469
and 470.

(I) Discovering real and personal property not previously
assessed.

(2) Procuring office space for staff hired pursuant to paragraph
(1).

(3) Procuring office supplies and related items for staff hired
pursuant to paragraph (1).

(4) Procuring information technology systems and software to
assist with the activities specified in subparagraphs (A) to (G),
inclusive, of paragraph (1) by increasing efficiencies and
effectiveness of property tax administration, and allowing for
appropriate utilization of program receipts. For purposes of this
paragraph, “information technology systems and software” shall
exclude desktop computers, portable computers, tablet computers,
and mobile phones, unless specifically authorized by the
Department of Finance.

(g) No later than April 15, 2015, and each subsequent April 15
that the program is operative, each participating county assessor’s
office shall report the following information to the Department of
Finance in the form and manner specified by the Department of
Finance:

(1) The matching funds provided by the county in the fiscal year.

(2) A status report for completing the assessment activities using
program funds and county matching funds to meet the benchmarks
specified in paragraph (2) of subdivision (a) in the next fiscal year.

(h) No later than September 15, 2015, and each subsequent
September 15 that the program is operative, each participating
county assessor’s office shall report the following information to
the Department of Finance in the form and manner specified by
the Department of Finance:

(1) (A) The matching funds provided by the county in the fiscal
year.

(B) If the matching funds provided by the county are less than
the amount determined for that year by the Department of Finance
pursuant to paragraph (2) of subdivision (b), the Director of
Finance shall immediately terminate the county’s participation in
the program.

(2) The number of staff whose salaries and benefits were paid
in full with program grant funds and with county matching funds
in the fiscal year.

(3) The number of properties assessed and enrolled in the fiscal
year pursuant to subparagraph (A) of paragraph (1) of subdivision
(f) by the staff identified in paragraph (1) of subdivision (f), and
the total assessed value of those properties. If applicable, the
county assessor shall separately report the number of properties
assessed and enrolled in the fiscal year using the information
technology systems and software identified in paragraph (4) of
subdivision (f) and the total assessed value of those properties.

(4) The number of properties reassessed in the fiscal year
pursuant to subparagraph (B) of paragraph (1) of subdivision (f)
by the staff identified in paragraph (1) of subdivision (f), and the
total roll value of those reassessments. If applicable, the county
assessor shall separately report the number of properties
reassessed in the fiscal year using the information technology
systems and software identified in paragraph (4) of subdivision
(f) and the total roll value of those reassessments.

(5) The number of supplemental assessments enrolled in the
fiscal year pursuant to subparagraph (C) of paragraph (1) of
subdivision (f) by the staff identified in paragraph (1) of subdivision
(f), and the total roll value of those supplemental assessments. If
applicable, the county assessor shall separately report the number
of supplemental assessments enrolled in the fiscal year using the
information technology systems and software identified in
paragraph (4) of subdivision (f) and the total roll value of those
supplemental assessments.

(6) The number of properties reassessed in the fiscal year
pursuant to subparagraph (D) of paragraph (1) of subdivision (f)
by the staff identified in paragraph (1) of subdivision (f) and the
total roll value of those reassessments. If applicable, the county
assessor shall separately report the number of properties
reassessed in the fiscal year using the information technology
systems and software identified in paragraph (4) of subdivision
(f) and the total roll value of those reassessments.

(7) The number of escaped assessments enrolled in the fiscal
year pursuant to subparagraph (E) of paragraph (1) of subdivision
(f) by the staff identified in paragraph (1) of subdivision (f), and
the total roll value of those assessments. If applicable, the county
assessor shall separately report the number of escaped assessments
enrolled in the fiscal year using the information technology systems
and software identified in paragraph (4) of subdivision (f) and the
total roll value of those assessments.

(8) The number of properties reassessed in the fiscal year
pursuant to subparagraph (F) of paragraph (1) of subdivision (f)
by the staff identified in paragraph (1) of subdivision (f), and the
total roll value of those reassessments. If applicable, the county
assessor shall separately report the number of properties
reassessed in the fiscal year using the information technology
systems and software identified in paragraph (4) of subdivision
(f) and the total roll value of those reassessments.

(9) The number of assessment appeals successfully responded
to in the fiscal year pursuant to subparagraph (G) of paragraph
(1) of subdivision (f) by the staff identified in paragraph (1) of
subdivision (f) and the total value retained on the roll as a result.
For purposes of this paragraph, “successfully responded to” means
the assessment appeals board did not reduce the assessed value
to that claimed by the appellant.

(10) The additional number of property tax audits completed
in the fiscal year pursuant to subparagraph (H) of paragraph (1)
of subdivision (f) by the staff identified in paragraph (1) of
subdivision (f) and the total value retained on the roll as a result.
For purposes of this paragraph, additional audits refers to the
number greater than the required volume of pool audits pursuant
to Section 469.

(11) The number of properties discovered pursuant
subparagraph (I) of paragraph (1) of subdivision (f) by the staff
identified in paragraph (1) of subdivision (f) and the total value
retained on the roll as a result.

(i) The Department of Finance shall annually review the
information submitted pursuant to subdivision (g), and shall
determine for each county whether the work performed using
program funds and county matching funds has met the benchmarks
specified in paragraph (2) of subdivision (a). Subsequent to the
provision of 30 days’ notice to the Joint Legislative Budget
Committee, the Director of Finance may terminate the participation
of a county assessor’s office in the program under the following
circumstances:

(1) If the program activities of the assessor’s office have not
met the benchmarks specified in paragraph (2) of subdivision (a),
and if the Director of Finance believes the assessor’s office does
not have a viable plan for performing additional assessment
activities that will meet those benchmarks in the next fiscal year.

(2) If the program funds were expended for purposes not
authorized in subdivision (f), or as otherwise approved by the
Department of Finance pursuant to that subdivision.

(3) If the Director of Finance believes that the county’s
participation is no longer in the best fiscal or policy interest of
the state or of the affected taxing entities.

(j) Upon the request of the Department of Finance, participating
county assessors’ offices shall provide the Department of Finance
with any supplemental information necessary to substantiate the
information contained in the report submitted pursuant to
subdivision (g).

(k) No later than May 8, 2017, the Department of Finance shall
provide the Joint Legislative Budget Committee with a report that,
at a minimum, includes the following information for each county
and for each fiscal year that the program was in operation:

(1) The assessed value of properties enrolled pursuant to
subparagraph (A) of paragraph (1) of subdivision (f), using
program funds and county matching funds. If applicable, the
Department of Finance shall separately report the assessed value
of properties enrolled using the information technology systems
and software identified in paragraph (4) of subdivision (f).

(2) The increase in assessed value of properties reassessed
pursuant to subparagraph (B) of paragraph (1) of subdivision (f),
using program funds and county matching funds. If applicable,
the Department of Finance shall separately report the increase in
assessed value of properties reassessed using the information
technology systems and software identified in paragraph (4) of
subdivision (f).

(3) The total value of the supplemental assessments levied
pursuant to subparagraph (C) of paragraph (1) of subdivision (f),
using program funds and county matching funds. If applicable,
the Department of Finance shall separately report the value of the
supplemental assessments levied using the information technology
systems and software identified in paragraph (4) of subdivision
(f).

(4) The increase in assessed value of properties reassessed
pursuant to subparagraph (D) of paragraph (1) of subdivision (f),
using program funds and county matching funds. If applicable,
the Department of Finance shall separately report the increase in
assessed value of properties reassessed using the information
technology systems and software identified in paragraph (4) of
subdivision (f).

(5) The increase in assessed value associated with escaped
assessments enrolled pursuant to subparagraph (E) of paragraph
(1) of subdivision (f), using program funds and county matching
funds. If applicable, the Department of Finance shall separately
report the increase in assessed value associated with escaped
assessments enrolled using the information technology systems
and software identified in paragraph (4) of subdivision (f).

(6) The increase in assessed value associated with properties
reassessed pursuant to subparagraph (F) of paragraph (1) of
subdivision (f), using program funds and county matching funds.
If applicable, the Department of Finance shall separately report
the increase in assessed value associated with properties
reassessed using the information technology systems and software
identified in paragraph (4) of subdivision (f).

(7) The number of assessment appeals successfully responded
to pursuant to subparagraph (G) of paragraph (1) of subdivision
(f), using program funds and county matching funds, and the
amount of assessed value retained on the roll as a result. For
purposes of this paragraph, “successfully responded to” means
the assessment appeals board did not reduce the assessed value
to that claimed by the appellant.

(8) The increase in assessed value associated with property tax
audits pursuant to subparagraph (H) of paragraph (1) of
subdivision (f), using program funds and county matching funds.
If applicable, the Department of Finance shall separately report
the increase in assessed value associated with escaped assessments
enrolled using the information technology systems and software
identified in paragraph (4) of subdivision (f).

(9) The increase in assessed value associated with the discovery
of previously unassessed property pursuant to subparagraph (I)
of paragraph (1) of subdivision (f), using program funds and county
matching funds. If applicable, the Department of Finance shall
separately report the increase in assessed value associated with
escaped assessments enrolled using the information technology
systems and software identified in paragraph (4) of subdivision
(f).

(10) An estimate of the countywide property tax revenue
resulting from the assessed valuation increases identified pursuant
to paragraphs (1) to (9), inclusive, and paragraphs (8) and (9).

(11) An estimate of the countywide property tax revenue that
was retained as a result of the appeals workload identified in
paragraph (7).

(12) An estimate of the amount of revenue identified in
paragraphs (10) and (11) that accrued to the following entities:

(A) K-12 school districts.

(B) California Community College districts.

(C) County Offices of Education.

(13) A determination as to whether the program succeeded
according to the criteria specified in paragraph (3) of subdivision
(a), and a recommendation as to whether the program should be
continued in its current form, expanded to include additional
county assessors’ offices, or terminated in the 2017-18 fiscal year.

(l) The Legislature finds and declares there is a compelling
public interest in allowing the Department of Finance to implement
and administer the provisions of this section as expeditiously as
possible, and to thereby accelerate countywide equalization efforts.
The Department of Finance is therefore exempt from the provisions
of the Administrative Procedure Act (Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code) for the express purpose of carrying out the
duties in this section.

end insert

begin insert

begin insert SEC. 90. end insert   

end insert

begin insert Section 1112 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1112.  

(a) Any employer who without good cause fails to pay
any contributions required of him or her or of his or her workers,
except amounts assessed under Article 8 of this chapter, within
the time required shall pay a penalty of begin delete 10 end delete begin insert 15 end insert percent of the amount
of those contributions.

(b) Any employer required to remit payments by electronic
funds transfer pursuant to Section 13021, who without good cause
remits those amounts by means other than electronic funds transfer
shall pay a penalty of begin delete 10 end delete begin insert 15 end insert percent of the amount of those
contributions.

begin insert

(c) The changes made to this section by the act adding this
subdivision shall apply on and after July 1, 2014.

end insert

begin insert

begin insert SEC. 91. end insert   

end insert

begin insert Section 1112.5 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1112.5.  

(a) Any employer who without good cause fails to file
the return and reports required by subdivision (a) of Section 1088
and subdivision (a) of Section 13021 within 60 days of the time
required under subdivision (a) of Section 1110 shall pay a penalty
of begin delete 10 end delete begin insert 15 end insert percent of the amount of contributions and personal
income tax withholding required by this report. This penalty shall
be in addition to the penalties required by Sections 1112 and 1126.

(b) For purposes of subdivision (a), the amount of contributions
and personal income tax required by the report of contributions
shall be reduced by the amount of any contributions and personal
income tax paid on or before the prescribed payment dates.

begin insert

(c) The changes made to this section by the act adding this
subdivision shall apply on and after July 1, 2014.

end insert

begin insert

begin insert SEC. 92. end insert   

end insert

begin insert Section 1114 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1114.  

(a) Any employer who, without good cause, fails to file
within 15 days after service by the director of notice pursuant to
Section 1206 of a specific written demand therefor, a report of
wages of each of his or her workers required by this division, shall
pay in addition to other amounts required, for each unreported
wage item a penalty of begin delete ten end delete begin insert twenty end insert dollars begin delete ($10). end delete begin insert ($20). end insert

(b) Any employer required by this division to file a report of
wages of each of his or her workers on magnetic media as
prescribed by subdivision (f) of Section 1088, who, without good
cause, instead files a report of wages on paper or in another form,
shall pay in addition to other amounts required, for each wage item
a penalty of begin delete ten end delete begin insert twenty end insert dollars begin delete ($10). end delete begin insert ($20). end insert

begin insert

(c) The changes made to this section by the act adding this
subdivision shall apply on and after July 1, 2014.

end insert

begin insert

begin insert SEC. 93. end insert   

end insert

begin insert Section 1126 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1126.  

begin insert (a) end insert begin insert   end insert If any employing unit fails to make a return or report
as required under this division, the director shall make an estimate
based upon any information in his or her possession or that may
come into his or her possession of the amount of wages paid for
employment in the period or periods for which no return or report
was filed and upon the basis of the estimate shall compute and
assess the amounts of employer and worker contributions payable
by the employing unit, adding thereto a penalty of begin delete 10 end delete begin insert 15 end insert percent
of the amount of contributions.

begin insert

(b) The changes made to this section by the act adding this
subdivision shall apply on and after July 1, 2014.

end insert

begin insert

begin insert SEC. 94. end insert   

end insert

begin insert Section 1127 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1127.  

begin insert (a) end insert begin insert   end insert If the director is not satisfied with any return or
report made by any employing unit of the amount of employer or
worker contributions, he or she may compute the amount required
to be paid upon the basis of facts contained in the return or reports
or may make an estimate upon the basis of any information in his
or her possession or that may come into his or her possession and
make an assessment of the amount of the deficiency. If any part
of the deficiency is due to negligence or intentional disregard of
this division or authorized regulations, a penalty of begin delete 10 end delete begin insert 15 end insert percent
of the amount of the deficiency shall be added to the assessment.

begin insert

(b) The changes made to this section by the act adding this
subdivision shall apply on and after July 1, 2014.

end insert

begin insert

begin insert SEC. 95. end insert   

end insert

begin insert Section 1135 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1135.  

begin insert (a) end insert begin insert   end insert Assessments under this article become delinquent
if not paid on or before the date they become final pursuant to
Sections 1036, 1221, 1222, and 1224. There shall be added to the
amount of each delinquent assessment a penalty of begin delete 10 end delete begin insert 15 end insert percent
of the amount thereof exclusive of interest and penalties.

begin insert

(b) The changes made to this section by the act adding this
subdivision shall apply on and after July 1, 2014.

end insert

begin insert

begin insert SEC. 96. end insert   

end insert

begin insert Section 1585.5 of the end insert begin insert Unemployment Insurance Code end insert
begin insert is amended to read: end insert

1585.5.  

begin insert (a) end insert begin insert   end insert The director shall estimate the amount of penalties
and interest collected by the department pursuant to Division 6
(commencing with Section 13000) relating to the withholding of
personal income tax and shall transfer such amount to the Personal
Income Tax Fund on a quarterly basis.

begin insert

(b) For the 2014-15 fiscal year, the quarterly transfer to the
Personal Income Tax Fund pursuant to subdivision (a) is
suspended.

end insert

begin insert

begin insert SEC. 97. end insert   

end insert

begin insert Section 2 of Chapter 469 of the Statutes of 2002 is
amended to read: end insert

Sec. 2.  

There is hereby appropriated the sum of one hundred
thousand dollars ($100,000) for each fiscal year from the General
Fund to the begin delete California State Military Museum end delete begin insert Military Department end insert
for the establishment and operation of the begin delete museum and resource
center specified end delete begin insert California State Military Museum and Resource
Center described end insert in Section 179 of the Military and Veterans Code.

begin insert

begin insert SEC. 98. end insert   

end insert

begin insert The amount of two million dollars ($2,000,000) is
hereby appropriated from the General Fund to the Governor’s
Office of Business and Economic Development on a one-time basis
to be used to draw down federal funding in support of the Small
Business Development Center Network Program. These funds shall
be available for encumbrance and expenditure until June 30, 2017. end insert

begin insert

begin insert SEC. 99. end insert   

end insert begin insert

This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.

end insert

begin insert

begin insert SEC. 100. end insert   

end insert begin insert

If the Commission on State Mandates determines
that this act contains 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

begin delete

SECTION 1.  

It is the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2014.

end delete