Bill Text: CA AB114 | 2015-2016 | Regular Session | Chaptered
Bill Title: Public works: building construction.
Spectrum: Partisan Bill (Democrat 16-0)
Status: (Passed) 2015-06-24 - Chaptered by Secretary of State - Chapter 14, Statutes of 2015. [AB114 Detail]
Download: California-2015-AB114-Chaptered.html
BILL NUMBER: AB 114 CHAPTERED
BILL TEXT
CHAPTER 14
FILED WITH SECRETARY OF STATE JUNE 24, 2015
APPROVED BY GOVERNOR JUNE 24, 2015
PASSED THE SENATE JUNE 15, 2015
PASSED THE ASSEMBLY JUNE 15, 2015
AMENDED IN SENATE JUNE 11, 2015
INTRODUCED BY Committee on Budget (Weber (Chair), Bloom, Bonta,
Campos, Chiu, Cooper, Gordon, Jones-Sawyer, McCarty, Mullin,
Nazarian, O'Donnell, Rodriguez, Thurmond, Ting, and Williams)
JANUARY 9, 2015
An act to amend Sections 13332.19, 15816, 15817.1, 15820.903,
15820.913, 15820.922, 15831, 15832, and 15848 of, and to repeal
Section 15770.5 of, the Government Code, relating to public works,
and making an appropriation therefor, to take effect immediately,
bill related to the budget.
LEGISLATIVE COUNSEL'S DIGEST
AB 114, Committee on Budget. Public works: building construction.
(1) Existing law, except as specified, prohibits any state agency
from expending funds appropriated for design-build projects until the
Department of Finance and the State Public Works Board have approved
performance criteria or performance criteria and concept drawings
for the project. Existing law, for these purposes, defines the term
"performance criteria" to mean the information that fully describes
the scope of the proposed project, as specified. Existing law, for
these purposes, defines the term "concept drawings" to mean any
schematic drawings or architectural renderings that are prepared, in
addition to performance criteria, in the detail necessary to
sufficiently describe the state's needs.
This bill would revise the definition of "performance criteria,"
for these purposes, to include concept drawings, as specified. The
bill would additionally make conforming changes.
(2) Existing law establishes the State Public Works Board which
consists of the Director of Finance, the Director of Transportation,
and the Director of General Services. Existing law authorizes the
Director of Transportation and the Director of General Services to
appoint a deputy or assistant director in their respective
departments to act in their place on the board, as specified.
This bill would repeal that authorization.
(3) Existing law requires the State Public Works Board to notify
the Department of General Services whenever the revenues, rentals, or
receipts from the operation of a public building that was acquired
or constructed by the board are no longer required or pledged for the
payment of principal or interest on any of the certificates or
revenue bonds of the board. Existing law provides that thereafter,
that public building is under the jurisdiction of, and operated and
maintained by, the Department of General Services.
This bill would repeal this notification requirement and instead
require those buildings to return to the jurisdiction of, and be
operated and managed by, the state agency that had jurisdiction of
the property prior to the board's financing of the public building.
The bill would additionally make conforming changes.
Existing law exempts from these provisions any public buildings
that are acquired by lease by the board from a state agency, for the
purposes of leasing the public building back to the state agency, as
specified, and public buildings constructed for lease purchase to the
University of California, the Trustees of the California State
University, the Board of Governors of the California Maritime
Academy, or any community college district. Existing law provides
that when the revenues, rentals, or receipts from the operation of
any public facility or public building are no longer required or
pledged for the payment of principal or interest on the certificates
or revenue bonds of the board, title to the public building vests in
the Regents of the University of California, the Trustees of the
California State University, the Board of Governors of the California
Maritime Academy, or the community college district.
This bill would repeal these exemption and vesting provisions.
(4) Existing law, until July 1, 2015, authorizes the State Public
Works Board to acquire public buildings by lease from any state
agency, and to lease those public buildings back to the state agency
and pledge the revenues, rentals, or receipts to the lease to secure
repayment of revenue bonds, notes, or certificates issued by the
board for the purpose of facilitating the financing of public
buildings, as specified.
This bill would eliminate the repeal date and require the
Department of Finance to report to the Legislature by June 30, 2017,
on the effects of this repeal, as specified.
(5) Existing law requires all revenue bonds issued for state
building construction to bear the signature of the Governor, and the
facsimile countersignature of the Controller and the Treasurer, as
specified. Existing law requires all interest coupons attached to
each bond to bear the facsimile signature of the Treasurer, as
specified. Existing law specifies that the rate of interest to be
born by the bonds need not be uniform for all bonds of the same issue
or series or division and provides that the rate may be determined
and fixed by the State Public Works Board by resolution adopted at or
after the sale of the bonds.
This bill would eliminate the requirement that all interest
coupons attached to each bond bear the facsimile signature of the
Treasurer and all references to interest coupons in these provisions.
The bill would additionally provide that a "not to exceed" interest
rate may be determined and fixed by the board by resolution adopted
prior to or after the sale of the bonds.
(6) Existing law requires the highest bid received on the sale of
the bonds to be determined by deducting the total amount of the
premium bid, if any, from the total amount of the interest that the
state would be required to pay from the date of the bonds or the last
preceding interest payment date, whichever is latest, to the
respective maturity date of the bonds, as specified, and requires the
award to be made on the basis of the lowest net interest cost to the
state. Existing law requires the Treasurer, upon receipt of a
resolution of the State Public Works Board authorizing the issuance
of bonds, to provide for the preparation of the bonds in accordance
with the resolution. In the case of a public sale, existing law
authorizes the Treasurer to sell the bonds at the time, and with the
notice, determined by the Treasurer, upon sealed bids, to the bidder
whose bid will result in the lowest net interest cost on account of
the bonds.
This bill would instead authorize the Treasurer, for a public
sale, to set forth the form and means of bids, and to sell to the
bidder whose bid will result in the lowest interest cost to the state
on account of the bonds. The bill would set forth the procedures the
Treasurer may use to determine the lowest interest cost to the
state, including the net interest cost of each bid, or the true
interest cost of each bid, as defined.
(7) Existing law authorizes the Department of Corrections and
Rehabilitation, participating counties, and the State Public Works
Board to acquire, design, and construct local jail facilities
approved by the Board of State and Community Corrections (BSCC).
Existing law authorizes the State Public Works Board to issue revenue
bonds, notes, or bond anticipation notes in the amounts of
$365,771,000 and $854,229,000, in 2 phases, to finance the
acquisition, design, and construction, and a reasonable construction
reserve, of approved local jail facilities, as specified. Existing
law authorizes the State Public Works Board to issue revenue bonds,
notes, or bond anticipation notes in the amount of $500,000,000 to
finance the acquisition, design, and construction, and a reasonable
construction reserve, of approved adult local criminal justice
facilities, as defined. The funds derived from those revenue bonds,
notes, or bond anticipation notes are continuously appropriated for
the purposes described above.
This bill would decrease the authorization for revenue bonds,
notes, or bond anticipation notes in the first phase from
$365,771,000 to $340,866,000 and increase the authorization of the
2nd phase from $854,229,000 to $870,074,000. The bill would also
increase the authorization to be used for adult local criminal
justice facilities from $500,000,000 to $509,060,000.
(8) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 13332.19 of the Government Code is amended to
read:
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. Performance criteria may include concept drawings,
which include any schematic drawings or architectural renderings that
are prepared in the detail necessary to sufficiently describe the
state's needs.
(b) (1) Except as otherwise specified in subparagraphs (A) to (D),
inclusive, of paragraph (2) funds appropriated for a design-build
project shall not 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.
(2) This section shall not apply to any of the following:
(A) Amounts for acquisition of real property, in fee or any lesser
interest.
(B) Amounts for equipment or minor capital outlay projects.
(C) Amounts appropriated for performance criteria.
(D) 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 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. A design-build
project for which a capital outlay appropriation is made shall not be
put out to design-build solicitation until the bid package has been
approved by the Department of Finance. A substantial change shall not
be made to the performance criteria as approved by the board and the
Department of Finance without written approval by the Department of
Finance. The Department of Finance shall approve any proposed bid or
proposal alternates set forth in the design-build solicitation
package.
(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 ensure completion of the project.
(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 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.
SEC. 2. Section 15770.5 of the Government Code is repealed.
SEC. 3. Section 15816 of the Government Code is amended to read:
15816. (a) When any public building has been acquired or
constructed by the board, and the revenues, rentals, or receipts from
the operation of the public building are no longer required or
pledged for the payment of principal or interest on any of the
certificates or revenue bonds of the board undertaken under this
part, the public building shall be under the jurisdiction of, and
operated and maintained by, the state agency that had jurisdiction of
the property prior to the board's financing of the public building.
(b) If at any time funds are available by law to retire any
certificates or revenue bonds issued to defray the cost of any public
building, these funds shall be applied to the redemption of
certificates or revenue bonds secured by the rentals and revenues
from that public building.
SEC. 4. Section 15817.1 of the Government Code is amended to read:
15817.1. (a) Exclusively for the purpose of facilitating the
financing of public buildings pursuant to this part through the
issuance of revenue bonds, notes, or certificates by the board, and
notwithstanding any other law, the board may acquire by lease from
any state agency public buildings identified by, and under the
jurisdiction or control of, the state agency, and, in that
connection, the board may then lease those public buildings back to
the state agency and may pledge the revenues, rentals, or receipts to
the lease to secure the repayment of revenue bonds, notes, or
certificates issued by the board. The board is not required to apply
the proceeds of the board's bonds, notes, or certificates to acquire,
design, construct, or otherwise improve the same public buildings
that are leased pursuant to this section. In each case, the lease
shall provide rental provisions, term, payment, security, default,
remedy, and other terms or provisions as may be specified in the
lease or other agreement or agreements between the board and the
state agency and may provide for the substitution of other public
buildings for the public buildings initially leased by the board and
the state agency pursuant to this section. The public buildings that
are leased pursuant to this section may be existing public buildings,
as determined by the board and the state agency, and which the board
and the state agency also determine to have both of the following:
(1) A fair rental value that is consistent with the principal
amount of the bonds, notes, or certificates of the board authorized
to be issued for the purpose of providing the financing of public
buildings pursuant to this part.
(2) An economic useful life that is not shorter than the final
maturity of the bonds, notes, or certificates of the board authorized
to be issued for the purpose of providing the financing of public
buildings pursuant to this part.
(b) These determinations by the board and the state agency
pursuant to subdivision (a) shall be final and conclusive.
(c) A lease made pursuant to this section does not require the
approval of the Director of General Services.
(d) The board or a state agency may utilize subdivision (a) in
connection with the issuance of any revenue bonds, notes, or
certificates previously authorized but not issued, or any revenue
bonds, notes, or certificates authorized subsequent to the effective
date of the act adding this subdivision.
(e) On or before June 30, 2017, the Department of Finance shall
report to the fiscal committees of the Legislature the following
regarding the removal of the July 1, 2015, inoperative date from the
asset transfer authority of the board. The report shall include, but
is not limited to, all of the following:
(1) The number of times the asset transfer authority has been
invoked.
(2) The aggregate amount of financing secured through asset
transfers.
(3) An estimate of the financing savings realized through the use
of asset transfers.
SEC. 5. Section 15820.903 of the Government Code is amended to
read:
15820.903. (a) The SPWB may issue up to three hundred forty
million eight hundred sixty-six thousand dollars ($340,866,000) in
revenue bonds, notes, or bond anticipation notes, pursuant to Chapter
5 of Part 10b of Division 3 of Title 2 (commencing with Section
15830) to finance the acquisition, design, or construction, and a
reasonable construction reserve, of approved local jail facilities
described in Section 15820.901, and any additional amount authorized
under Section 15849.6 to pay for the cost of financing.
(b) Proceeds from the revenue bonds, notes, or bond anticipation
notes may be utilized to reimburse a participating county for the
costs of acquisition, preliminary plans, working drawings, and
construction for approved projects.
(c) Notwithstanding Section 13340, funds derived pursuant to this
section and Section 15820.902 are continuously appropriated for
purposes of this chapter.
(d) This section shall become inoperative on June 30, 2017, and no
project may be commenced after that date; however, projects that
have already commenced by that date may be completed and financed
with bonds issued pursuant to this chapter.
SEC. 6. Section 15820.913 of the Government Code is amended to
read:
15820.913. (a) The SPWB may issue up to eight hundred seventy
million seventy-four thousand dollars ($870,074,000) in revenue
bonds, notes, or bond anticipation notes, pursuant to Chapter 5 of
Part 10b of Division 3 of Title 2 (commencing with Section 15830) to
finance the acquisition, design, or construction, and a reasonable
construction reserve, of approved local jail facilities described in
Section 15820.911, and any additional amount authorized under Section
15849.6 to pay for the cost of financing.
(b) Proceeds from the revenue bonds, notes, or bond anticipation
notes may be used to reimburse a participating county for the costs
of acquisition, preliminary plans, working drawings, and construction
for approved projects.
(c) Notwithstanding Section 13340, funds derived pursuant to this
section and Section 15820.912 are continuously appropriated for
purposes of this chapter.
SEC. 7. Section 15820.922 of the Government Code is amended to
read:
15820.922. (a) The board may issue up to five hundred nine
million sixty thousand dollars ($509,060,000) in revenue bonds,
notes, or bond anticipation notes, pursuant to Chapter 5 (commencing
with Section 15830) to finance the acquisition, design, and
construction, including, without limitation, renovation, and a
reasonable construction reserve, of approved adult local criminal
justice facilities described in Section 15820.92, and any additional
amount authorized under Section 15849.6 to pay for the cost of
financing.
(b) Proceeds from the revenue bonds, notes, or bond anticipation
notes may be used to reimburse a participating county for the costs
of acquisition, design, and construction, including, without
limitation, renovation, for approved adult local criminal justice
facilities.
(c) Notwithstanding Section 13340, funds derived pursuant to this
section and Section 15820.921 are continuously appropriated for
purposes of this chapter.
SEC. 8. Section 15831 of the Government Code is amended to read:
15831. All bonds issued under this part shall bear the facsimile
signature of the Governor and the facsimile countersignature of the
Controller and the Treasurer, and the bonds shall be signed,
countersigned, and endorsed by the officers who shall be in office on
the date of issuance thereof, and each of the bonds shall bear an
impress of the Great Seal of the State of California. The bonds so
signed, countersigned, endorsed, and sealed, when sold, are valid
although the sale thereof be made at a date or dates upon which the
officers having signed, countersigned, and endorsed the bonds, or any
or either of the officers, shall have ceased to be the incumbents of
the offices held by them at the time of signing, countersigning, or
endorsing the bonds. Each bond issued under this part, if subject to
call or redemption prior to maturity, shall contain a recital to that
effect.
The rate of interest to be borne by the bonds need not be uniform
for all bonds of the same issue or series or maturity and a "not to
exceed" interest rate may be determined and fixed by the board by
resolution adopted prior to or after the sale of the bonds. The
Treasurer, when authorized by resolution of the board, may sell bonds
above, below, or at their par or face value.
SEC. 9. Section 15832 of the Government Code is amended to read:
15832. Upon receipt of a resolution of the board authorizing the
issuance of bonds, the Treasurer shall provide for their preparation
in accordance with the resolution. The bonds authorized to be issued
shall be sold by the Treasurer, at public sale or at private sale, as
directed by the board. In the case of public sale, (1) the bonds
shall be sold by the Treasurer, at such time as may be fixed by him
or her, and upon such notice as he or she may deem advisable, upon
bids submitted to the Treasurer in the form and by the means
specified by the Treasurer, to the bidder whose bid will result in
the lowest interest cost on account of such bonds, and (2) if no bids
are received, or if the Treasurer determines that the bids are not
satisfactory, the Treasurer may reject all bids received, if any, and
either readvertise or sell the bonds at private sale. For purposes
of this chapter, the method for determining the lowest interest cost
bid shall be determined by the Treasurer and shall be limited to
either the net interest cost method or the true interest cost method
determined by the bids as submitted in accordance with the notice of
sale. The net interest cost of each bid shall be determined by
ascertaining the total amount of interest that the state would be
required to pay under that bid, from the date of the bonds to the
respective maturity dates of the bonds then offered for sale, at the
interest rate or rates specified in the bid, less the total amount of
the premium, if any, or plus the total amount of the discount, if
any, offered by the bid. The bid under which the amount ascertained
is the least shall be deemed to be the bid resulting in the lowest
net interest cost. Under the true interest cost method, the bonds
shall be awarded to the bidder submitting the lowest interest rate
bid determined by the nominal interest rate that, when compounded
semiannually and used to discount the debt service payments on the
bonds to the date of the bonds, results in an amount equal to the
price bid for the bonds, excluding interest accrued to the date of
delivery.
Temporary or interim bonds, certificates, or receipts of any
denomination whatever, to be signed by the Treasurer, may be issued
and delivered until the definitive bonds are executed and available
for delivery. Signature of the Treasurer may be by signature stamp.
SEC. 10. Section 15848 of the Government Code is amended to read:
15848. Notwithstanding Section 13340 or any other provision of
law, the amount as may be necessary to pay the rent of any agency
occupying space in a facility authorized to be acquired or
constructed under the State Building Construction Act of 1955 or a
facility leased by a state agency pursuant to a joint powers
agreement in accordance with Chapter 5 (commencing with Section 6500)
of Division 7 of Title 1 is hereby appropriated each fiscal year
payable from the fund in the State Treasury from which that agency
derives its appropriation for support and shall become available only
if the rental payments are due during a period that the state is
operating without funds appropriated by the Budget Act for that
fiscal year or if the amount required to pay the rental payments has
not been included in the Budget Act for that fiscal year and the
Department of Finance certifies to the Controller that sufficient
funds are available for the support of the agency for that portion of
the facility that has been provided for its use and the facility or
portion thereof is available for the use and occupancy of the agency.
This appropriation shall be inoperative as to any facility for which
jurisdiction has been transferred pursuant to Section 15816.
SEC. 11. 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.
