Bill Text: CA AB2316 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: School facilities: leasing property.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2016-09-23 - Chaptered by Secretary of State - Chapter 521, Statutes of 2016. [AB2316 Detail]

Download: California-2015-AB2316-Amended.html

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BILL NUMBER: AB 2316	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 14, 2016
	AMENDED IN ASSEMBLY  APRIL 26, 2016

INTRODUCED BY   Assembly Member O'Donnell
   (Coauthor: Assembly Member Mullin)

                        FEBRUARY 18, 2016

   An act to amend Sections 17400 and 17406 of the Education Code,
relating to school facilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2316, as amended, O'Donnell. School facilities: leasing
property.
   Existing law requires the governing board of a school district to
adopt a resolution that, among other things: (1) declares its
intention to enter into a lease or agreement relating to school
property, (2) includes specified information about the property, and
(3) fixes a time for a public meeting of the governing board  of
the school district  at which sealed proposals to enter a lease
or agreement with the school district will be received from any
person, firm, or corporation, and considered by the governing
 board,   board of the school district,  as
specified.
   Existing law, notwithstanding the provision described above, also
authorizes the governing board of a school district, without
advertising for bids, to lease real property for a minimum rental of
$1 per year if the instrument by which this property is leased
requires the lessee to construct, or provide for the construction of,
a building to be used by the school district and provides that the
title to the building shall vest in the school district at the end of
the lease.
   This bill  would, among other things,   would
 delete the language that provides that  a school
district   the  governing board of a school
district  is not required to advertise for bids pursuant to this
 provision and would specify that only a person, firm, or
corporation that is a licensed contractor, as specified, is eligible
to be the lessee.   provision.  The bill would
require an instrument created pursuant to these provisions to be
awarded based on a competitive solicitation process to the proposer
providing the best  value   value, as defined,
 to the school district, taking into consideration the
proposer's demonstrated competence and professional qualifications
necessary for the satisfactory performance of the services required.
Before awarding such an instrument, the   district. The
 bill would require the governing board of the school district
to adopt and publish required procedures and guidelines for
evaluating the qualifications of  proposers to ensure that
the best value selections by the school district are conducted in a
fair and impartial manner,   proposers,  as
provided.  Notwithstanding certain laws, the  
The  bill would authorize a school district to enter into
 such  an instrument before written approval
 by   is obtained from  the Department of
General Services' Division of the State Architect (DSA) if the
instrument provides that no work for which a contractor is required
to be licensed and for which DSA approval is required shall be
performed before receipt of the required DSA approval. The bill would
also  provide that when a project for the construction,
alteration, repair, or improvement of any structure, building, or
other improvement of any kind that was   make the bill's
provisions retroactively applicable to certain projects  leased
through  such an   an  instrument before
July 1, 2015, and  would specify  that  if the 
instrument is later determined to be invalid, the contractor who
entered into the contract with the school district shall be entitled
to be paid the reasonable cost of the labor, equipment, materials,
and services furnished by the contractor before the date of the
determination, subject to specified conditions.  The bill w 
 ould authorize a school district to identify specific types of
subcontractors required to be included in a proposal, and would
impose specified other procedural requirements on awarding
construction subcontracts of a certain value.  The bill would
provide that the changes made by its provisions, except the deletion
of the  school district  governing  board's
  board of a school   district's 
authority to not advertise for bids, shall  remain in effect
only until   become inoperative on  July 1, 2022.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17400 of the Education Code is amended to read:

   17400.  (a) Any school district may enter into leases and
agreements relating to real property and buildings to be used by the
school district pursuant to this article.
   (b) As used in this article, the following terms have the
following meanings:
   (1) "Best value" means a competitive procurement process whereby
the selected proposer is selected on the basis of objective criteria
for evaluating the qualifications of proposers with the resulting
selection representing the best combination of price and
qualifications.
   (2) "Best value score" means the total score awarded to a proposer
for all scored evaluation factors.
   (3) "Building" includes each of the following:
   (A) One or more buildings located or to be located on one or more
sites.
   (B) The remodeling of any building located on a site to be leased
pursuant to this article.
   (C) Onsite and offsite facilities, utilities, or improvements that
the governing board  of the school district  determines are
necessary for the proper operation or function of the school
facilities to be leased.
   (D) The permanent improvement of school grounds.
   (4) "Preconstruction services" means advice during the design
phase including, but not limited to, scheduling, pricing, and phasing
to assist the school district to design a more constructible
project.
   (5) "Site" includes one or more sites, and also may include any
building or buildings located or to be located on a site.
  SEC. 2.  Section 17406 of the Education Code, as amended by Section
1 of Chapter 214 of the Statutes of 2015, is amended to read:
   17406.  (a) (1) Notwithstanding Section 17417, the governing board
of a school district may let, for a minimum rental of one dollar
($1) a year, to a person, firm, or  corporation, licensed
pursuant to Article 5 (commencing with Section 7065) of Chapter 9 of
Division 3 of the Business and Professions Code,  
corporation  real property that belongs to the school district
if the instrument by which this property is let requires the lessee
therein to construct on the demised premises, or provide for the
construction thereon of, a building or buildings for the use of the
school district during the term of the lease, and provides that title
to that building shall vest in the school district at the expiration
of that term. The instrument may provide for the means or methods by
which that title shall vest in the school district before the
expiration of that term, and shall contain other terms and conditions
as the governing board of the school district may deem to be in the
best interest of the school district.
   (2) An instrument created pursuant to paragraph (1) shall be
awarded based on a competitive solicitation process to the proposer
providing the best value to the school district, taking into
consideration the proposer's demonstrated competence and professional
qualifications necessary for the satisfactory performance of the
services required. Before awarding an instrument pursuant to this
section, the governing board of the school district shall adopt and
publish required procedures and guidelines for evaluating the
qualifications of proposers that ensure the best value selections by
the school district are conducted in a fair and impartial manner.
These procedures and guidelines shall be mandatory for the school
district when awarding an instrument pursuant to this section. The
required procedures shall include, at a minimum, the following:
   (A) The school district shall prepare a request for sealed
proposals from qualified proposers. The school district shall include
in the request for sealed proposals an estimate of price of the
project, a clear, precise description of any preconstruction services
that may be required and the facilities to be constructed, the key
elements of the instrument to be awarded, a description of the format
that proposals shall follow and the elements they shall contain, the
standards the school district will use in evaluating proposals, the
date on which proposals are due,  and  the timetable the
school district will follow in reviewing and evaluating 
proposals, and the process to be used by the successful proposer for
the award of subcontracts.   proposals. 
   (B) The school district shall give notice of the request for
sealed proposals in the manner of notice provided in Section 20112 of
the Public Contract  Code,   Code and in a
trade paper of general circulation published in the county where the
project is located,  with the latest notice published at least
10 days before the date for receipt of the proposals.
   (C) A proposer  must   shall  be
prequalified in accordance with subdivisions (b) to (m), inclusive,
of Section 20111.6 of the Public Contract  Code, 
 Code  in order to submit a proposal. If used, electrical,
mechanical, and plumbing subcontractors shall be subject to the same
prequalification requirements for prospective bidders described in
subdivisions (b) to (m), inclusive, of Section 20111.6 of the Public
Contract Code, including the requirement for the completion and
submission of a standardized prequalification questionnaire and
financial statement that is verified under oath and is not a public
record. These prequalification requirements shall be included in an
instrument created pursuant to paragraph (1).
   (D) The request for sealed proposals shall identify all criteria
that the school district will consider in evaluating the proposals
and qualifications of the proposers, including relevant experience,
safety record, price proposal, and other factors specified by the
school district. The price proposal shall include, at the school
district's discretion, either a lump-sum price for the instrument to
be awarded or the proposer's proposed fee to perform the services
requested, including the proposer's proposed fee to perform
preconstruction services or any other work related to the facilities
to be constructed, as requested by the school district. The request
for proposals shall specify whether each criterion will be evaluated
pass-fail or will be scored as part of the best value score, and
whether proposers must achieve any minimum qualification score for
award of the instrument under this section.
   (E) For each scored criterion, the school district shall identify
the methodology and rating or weighting system that will be used by
the school district in evaluating the criterion, including the weight
assigned to the criterion and any minimum acceptable score.
   (F) Proposals shall be evaluated and the instrument awarded under
this section in the following manner:
   (i) All proposals received shall be reviewed to determine those
that meet the format requirements and the standards specified in the
request for sealed proposals.
   (ii) The school district shall evaluate the qualifications of the
proposers based solely upon the criteria and evaluation methodology
set forth in the request for sealed proposals, and shall assign a
best value score to each proposal. Once the evaluation is complete,
all responsive  proposers   proposals 
shall be ranked from the  most advantageous  
highest best value  to the  least advantageous 
 lowest best value  to the school district.
   (iii) The award of the instrument shall be made by the governing
board of the school district to the responsive proposer whose
proposal is determined, in writing by the governing board of the
school district, to be the best value to the school district.
   (iv) If the selected proposer refuses or fails to execute the
tendered instrument, the governing board of the school district may
award the instrument to the proposer with the second highest best
value score if the governing board of the school district deems it to
be for the best interest of the school district. If the second
selected proposer refuses or fails to execute the tendered
instrument, the governing board of the school district may award the
instrument to the proposer with the third highest best value score if
the governing board of the school district deems it to be for the
best interest of the school district.
   (v) Notwithstanding any other law, upon issuance of a contract
award, the school district shall publicly announce its award,
identifying the entity to which the award is made, along with a
statement regarding the basis of the award. The statement regarding
the school district's contract award and the contract file shall
provide sufficient information to satisfy an external audit.
   (G) The governing board of the school district, at its discretion,
may reject all proposals and request new proposals.
   (3) Following the award of an instrument created pursuant to
paragraph (1), and if the price proposal is  a  not
a lump sum for the instrument awarded, the successful proposer shall
provide the school district with objectively verifiable information
of its costs to perform the services requested under the instrument
and shall select subcontractors  using a competitive
selection process that is set forth in the request for sealed
proposals.   as set forth in paragraph (4).  Once
any preconstruction services are completed and subcontractors are
selected, the successful proposer and the school district shall
finalize the price for the services to be provided under the
instrument that  is consistent with   does not
exceed  the price estimate in the request for proposal. The
contract file shall include documentation sufficient to support the
final price determination. 
   (4) (A) The school district, in the request for sealed proposals,
may identify specific types of subcontractors that must be included
in the proposal. All subcontractors that are identified in the
proposal shall be afforded the protections of the Subletting and
Subcontracting Fair Practices Act (Chapter 4 (commencing with Section
4100) of Part 1 of Division 2 of the Public Contract Code). 

   (B) Following the award of an instrument created pursuant to
paragraph (1) and for subcontractors not identified in the proposal,
the successful proposer shall proceed as follows in awarding
construction subcontracts with a value exceeding one-half of 1
percent of the price allocable to construction work:  
   (i) Provide public notice of availability of work to be
subcontracted in accordance with the publication requirements
applicable to the competitive bidding process of the school district,
including a fixed date and time on which qualifications statements,
bids, or proposals will be due.  
   (ii) Establish reasonable qualification criteria and standards.
 
   (iii) Award the subcontract either on a best value basis or to the
lowest responsible bidder. The process may include prequalification
or short-listing. The process does not apply to subcontractors listed
in the original proposal. Subcontractors awarded construction
subcontracts under this subdivision shall be afforded all the
protections of the Subletting and Subcontracting Fair Practices Act
(Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of
the Public Contract Code).  
   (4) 
    (5)  Nothing in paragraph (2) shall preclude a school
district from segregating the request for proposals into a request
for qualifications, followed by a request for proposals with price
information from the proposers deemed most qualified by the school
district, provided that the procedures specified in paragraphs
 (2) and (3)   (2), (3), and (4)  are
otherwise followed.
   (b) Notwithstanding Sections 17297 and 17402, a school district
may enter into an instrument created pursuant to paragraph (1) of
subdivision (a) before written approval by the Department of General
Services' Division of the State Architect if the instrument provides
that no work for which a contractor is required to be licensed in
accordance with Article 5 (commencing with Section 7065) of Chapter 9
of Division 3 of the Business and Professions Code and for which
Division of the State Architect approval is required shall be
performed before receipt of the required Division of the State
Architect approval.
   (c) A rental of property that complies with subdivision (a) as it
reads on the day that the lease is entered into shall be deemed to
have thereby required the payment of adequate consideration for
purposes of Section 6 of Article XVI of the California Constitution.
   (d) (1) This subdivision shall apply retroactively to a project
for the construction, alteration, repair, or improvement of any
structure, building, or other improvement of any kind that was leased
through an instrument pursuant to this section before July 1, 2015.
If at any time the instrument is determined to be invalid by a court
of competent jurisdiction, the contractor who entered into the
instrument with the school district shall be entitled to be paid the
reasonable cost of the labor, equipment, materials, and services
furnished by the contractor before the date of the determination that
the instrument is invalid if all of the following conditions are
met:
   (A) The contractor proceeded with construction, alteration,
repair, or improvement based upon a good faith belief that the
instrument was valid.
   (B) The school district has reasonably determined that the work
performed is satisfactory.
   (C) Contractor fraud did not occur in the obtaining or performance
of the instrument.
   (D) The instrument does not otherwise violate state law related to
the construction or leasing of public works of improvement.
   (2) In no event shall payment to the contractor pursuant to this
section exceed either of the following:
    (A) The contractor's costs as included in the instrument plus the
cost of any approved change orders.
   (B) The lease payments made, less profit, at the point in time the
instrument is determined to be invalid by a court of competent
jurisdiction.
   (3) Notwithstanding paragraph (1), this subdivision shall not
affect any protest and legal proceedings, whether contractual,
administrative, or judicial, to challenge the award of the public
works contract, nor affect any rights under Section 337.1 or 337.15
of the Code of Civil Procedure. 
   (e) This section shall remain in effect only until July 1, 2022,
and as of January 1, 2023, is repealed, unless a later enacted
statute, that is enacted before January 1, 2023, deletes or extends
that date.  
   (e) This section shall become inoperative on July 1, 2022, and, as
of January 1, 2023, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2023, deletes or
extends the dates on which it becomes inoperative and is repealed.

  SEC. 3.  Section 17406 of the Education Code, as added by Section 2
of Chapter 408 of the Statutes of 2014, is amended to read:
   17406.  (a) Notwithstanding Section 17417, the governing board of
a school district may let, for a minimum rental of one dollar ($1) a
year, to any person, firm, or corporation any real property that
belongs to the school district if the instrument by which this
property is let requires the lessee to construct on the demised
premises, or provide for the construction thereon of, a building or
buildings for the use of the school district during the term of the
lease, and provides that title to that building shall vest in the
school district at the expiration of that term. The instrument may
provide for the means or methods by which that title shall vest in
the school district before the expiration of that term, and shall
contain other terms and conditions as the governing board of the
school district may deem to be in the best interest of the school
district.
   (b) Any rental of property that complies with subdivision (a)
shall be deemed to have thereby required the payment of adequate
consideration for purposes of Section 6 of Article XVI of the
California Constitution.
   (c) This section shall become operative on July 1, 2022.