Bill Text: CA AB848 | 2017-2018 | Regular Session | Amended

California Assembly Bill 848 (Prior Session Legislation)

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

Bill Title: Public contracts: University of California: California State University: domestic workers.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Passed) 2017-10-15 - Chaptered by Secretary of State - Chapter 844, Statutes of 2017. [AB848 Detail]

Download: California-2017-AB848-Amended.html

Amended IN Assembly April 19, 2017

Amended IN Assembly April 05, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 848

Introduced by Assembly Member McCarty

February 16, 2017

An act ~~to amend Section 5703 of the Government Code, and~~ to add Chapter 3.9 (commencing with Section 12147) to Part 2 of Division 2 of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL'S DIGEST

AB 848, as amended, McCarty. Public contracts: University of California: California State University: domestic workers.

(1) Existing law requires a state agency to comply with specified procedures in awarding agency contracts. Existing law, with specified exceptions, prohibits a state agency authorized to enter into contracts relating to public benefit programs from contracting for services provided by a call center that directly serves applicants for, recipients of, or enrollees in, those public benefit programs with a contractor or subcontractor unless that contractor or subcontractor certifies in its bid for the contract that the contract, and any subcontract performed under that contract, will be performed solely with workers employed in California. Existing law imposes a civil penalty, as provided, for knowingly providing false information in that certification. Existing law also requires the contract to include a clause providing for a right by the state to terminate the contract for noncompliance and specified penalties, if the contractor or subcontractor performs the contract or the subcontract with workers not employed in California during the life of the contract.

This bill would prohibit the University of ~~California, as a condition of receiving state funding,~~ California and the California State ~~University,~~ University from contracting for services with a contractor or ~~subcontractor~~ subcontractor, where that contract displaces a career employee of the University of California or the California State University, unless that contractor or subcontractor certifies under penalty of perjury in his or her bid for ~~the contact~~ that contract that the contract, and any subcontract performed under that contract, will be performed solely with workers within the United States. ~~This~~

The bill would prohibit the University of ~~California, as a condition of receiving state funding,~~ California and the California State ~~University,~~ University from allocating or expending funds for employment training for contract employees located in foreign ~~countries.~~ countries, if that contract displaces a career employee of the University of California or the California State University. ~~The~~

The bill would require a contract to provide, in the event a contractor or subcontractor performs the contract or the subcontract with workers outside the United States during the life of the contract, for the termination of the contract for noncompliance, as specified.

The bill would also specify that these provisions do not apply to a contract, if refusing to award that contract would violate the specific terms of federal trade treaties, as specified.

The bill would specify that these provisions do not apply to ~~agreements entered into by the Treasurer in connection with the sale of any evidence of indebtedness.~~ contracts relating to study abroad programs conducted by the University of California or the California State University.

By requiring contractors and subcontractors to make certifications under penalty of perjury, this bill would create a new crime and thereby impose a state-mandated local program.

(2) 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.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

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

SECTION 1.

The Legislature finds and declares all of the following:

(a) The United States has lost nearly five million manufacturing jobs over the last 20 years, with at least 40 percent of these jobs outsourced to a foreign country.

(b) Outsourcing by the technology sector is a growing trend, with approximately 1.7 million jobs outsourced from the United States and an estimated one ~~hundred thirty-six billion dollars ($136,000,000,000)~~ billion three hundred sixty million dollars ($1,360,000,000) lost to outsourcing since the year 2000.

(c) Contractors and subcontractors are using taxpayer dollars to create jobs in foreign countries. State taxpayer funds should be used to create jobs in the United States and in California.

SEC. 2.Section 5703 of the Government Code is amended to read:
5703.
(a)Except as provided in subdivisions (b), (c), and (d), the Treasurer, in exercising the duties of agent for offering and selling bonds, whose duties include, among others, establishing the timing of a sale, preparation or approval of the documentation for the sale, sole authority to select the underwriters for negotiating the sale, and executing the bond purchase agreement on behalf of the state or the state’s agencies, is responsible for developing and implementing a competitive process for selection of underwriters for negotiated offerings of bonds. The competitive process may be conducted on an issue-by-issue basis or to establish one or more pools of underwriters for various types of issues. The competitive process shall have at least all of the following features:
~~(1)Solicitation of written qualifications from at least 20 underwriting firms.~~
~~(2)Consideration of the goals for minority and women business enterprise participation in professional bond services contracts.~~
~~(3)The written submissions shall be available for inspection at the office of the Treasurer for a period of at least six months.~~
~~(4)If a pool of underwriters is established, the competitive process shall be repeated at least every 24 months to reestablish the pool of underwriters.~~
(b)For negotiated offerings of bonds by state financing authorities that act as conduits to provide financing to other public, nonprofit, or private organizations, the Treasurer shall use the competitive process described in subdivision (a) to establish one or more pools of underwriters for each financing authority. The Treasurer may make additions to a pool without competitive solicitation, on a case-by-case determination upon the recommendation of a project applicant, where the Treasurer finds that the underwriter to be added has provided significant services to the project applicant with the expectation of compensation for those services from underwriting the revenue bonds which will fund the applicant’s project.
(c)The Treasurer may select underwriters for a negotiated sale of bonds by means other than as described in subdivision (a) if the Treasurer makes a written finding that extraordinary market conditions do not allow enough time to comply with subdivision (a) without risking financial detriment to the state.
~~(d)Subdivisions (a), (b), and (c) shall not apply to the issuance of state bonds for which the Treasurer is precluded by statute from selecting underwriters.~~
(e)For negotiated sales, the Treasurer shall maintain records of all cost information pertinent to the initial offering of all state bonds, except that in the case of bonds issued by a state financing authority, as described in subdivision (b), the issuing state financing authority shall instead be responsible for maintaining the same cost information on bonds it has issued. The information shall include, but not be limited to, all of the following:
~~(1)All amounts paid out of bond proceeds to the underwriter, detailed by management fee, takedown, risk, and underwriter’s expenses.~~
~~(2)All costs paid out of bond proceeds to rating agencies for rating of the bonds.~~
~~(3)All fees paid out of bond proceeds to bond counsels, trustees, or financial advisers relating to the initial offering of the bonds.~~
~~(4)The interest rate to be paid on the bonds.~~
(f)For competitive sales, the Treasurer shall maintain records of all bids submitted and the documentation of bid verifications including the terms of sale and the calculation of net interest cost or true interest cost.
~~(g)The State Auditor shall audit the cost records required to be maintained pursuant to subdivision (e) and conduct a review of the records required to be maintained pursuant to subdivision (f).~~
(h)The State Auditor shall report whether this section is being fully implemented. The State Auditor shall make cost and interest rate comparisons with similar initial bond offerings of other states where possible. The State Auditor shall submit a report to the Legislature on March 1, 1993, and March 1, 1995, for bonds sold during the two calendar years immediately preceding the year in which the report is due.
~~(i)The following provisions of the Public Contract Code do not apply to agreements entered into by the Treasurer in connection with the sale of any evidence of indebtedness:~~
~~(1)Section 10295.~~
~~(2)Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of Division 2.~~
~~(3)Chapter 3.9 (commencing with Section 12147) of Part 2 of Division 2.~~

SEC. 3.SEC. 2.

Chapter 3.9 (commencing with Section 12147) is added to Part 2 of Division 2 of the Public Contract Code, to read:

CHAPTER 3.9. Offshoring University of California and California State University Contracts

12147.

(a) Notwithstanding any other law, ~~except as provided in subdivision (e),~~ neither the University of California nor the California State University may contract for services with a contractor or ~~subcontractor~~ subcontractor, where that contract displaces a career employee of the University of California or the California State University, unless that contractor or subcontractor certifies under penalty of perjury in his or her bid for ~~the contact~~ that contract that the contract, and any subcontract performed under that contract, will be performed solely with workers within the United States.

(b) Notwithstanding any other law, ~~except as provided in subdivision (e),~~ neither the University of California nor the California State University may expend funds to train contract employees located in foreign countries or train contract employees who plan to relocate to a foreign country as part of the ~~contract.~~ contract, if that contract displaces a career employee of the University of California or the California State University.

(c) The contract shall provide that, in the event a contractor or subcontractor performs the contract or the subcontract with workers outside the United States during the life of the contract, the contract shall be terminated for noncompliance, and the contractor or subcontractor shall forfeit penalties to the University of California or the California State University, as appropriate, in an amount equal to the amount paid by the university for the percentage of work that was performed with workers outside the United ~~States.~~ States, if that contract displaces a career employee of the University of California or the California State University.

(d) This chapter does not apply to a contract if refusing to award that contract, on the basis that the contractor or subcontractor does not certify under penalty of perjury that the contract, and any subcontract performed under that contract, will be performed solely with workers within the United States, would violate the specific terms of the Agreement on Government Procurement of the World Trade Organization or any other bilateral or regional free trade agreement that California has consented to.

(e) This chapter ~~shall apply to the University of California as a condition of receiving state funding.~~ does not apply to contracts relating to study abroad programs conducted by the University of California or the California State University.

SEC. 4.SEC. 3.

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