Existing law prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.

Existing law requires the State Water Resources Control Board and the 9 California regional water quality control boards to prescribe waste discharge requirements in accordance with the National Pollutant Discharge Elimination System (NPDES) permit program established by the federal Clean Water Act and the Porter-Cologne Water Quality Control Act. Existing law regulates the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturbs one or more acres of land surface, or that is part of a common plan of development or sale that disturbs more than one acre of land surface.

This bill, except as specified, would prohibit a public entity, charter city, or charter county from delegating to a contractor the development of a plan, as defined, used to prevent or reduce water pollution or runoff on a public works contract. The bill would also prohibit a public entity, charter city, or charter county from requiring a contractor on a public works contract that includes compliance with a plan to assume responsibility for the completeness and accuracy of a plan developed by that entity. The bill would provide that these prohibitions do not apply to contracts that use specified procurement methods if the contractor or construction manager at risk is required by the bid or procurement documents to retain a plan developer for the project owners. The bill would also declare that this is a matter of statewide concern. The bill would state that its provisions are declaratory of existing law, as specified.

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 the Legislature finds there is no mandate contained in the bill that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement pursuant to these constitutional and statutory provisions.

Existing law prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.

Existing law requires the State Water Resources Control Board and the 9 California regional water quality control boards to prescribe waste discharge requirements in accordance with the National Pollutant Discharge Elimination System (NPDES) permit program established by the federal Clean Water Act and the Porter-Cologne Water Quality Control Act. Existing law regulates the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturbs one or more acres of land surface, or that is part of a common plan of development or sale that disturbs more than one acre of land surface.

This bill bill, except as specified, would prohibit a public entity, charter city, or charter county from delegating to a contractor the development of a plan, as defined, used to prevent or reduce water pollution or runoff on a public works contract, except as provided. contract. The bill would also prohibit a public entity, charter city, or charter county from requiring a contractor on a public works contract that includes compliance with a plan to assume responsibility for the completeness and accuracy of a plan developed by that entity. The bill would provide that these prohibitions do not apply to contracts that use specified procurement methods. methods if the contractor or construction manager at risk is required by the bid or procurement documents to retain a plan developer for the project owners. The bill would also declare that this is a matter of statewide concern. The bill would state that its provisions are declaratory of existing law, as specified.

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 the Legislature finds there is no mandate contained in the bill that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement pursuant to these constitutional and statutory provisions.

Existing law prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.

Existing law requires the State Water Resources Control Board and the 9 California regional water quality control boards to prescribe waste discharge requirements in accordance with the National Pollutant Discharge Elimination System (NPDES) permit program established by the federal Clean Water Act and the Porter-Cologne Water Quality Control Act. Existing law regulates the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturbs one or more acres of land surface, or that is part of a common plan of development or sale that disturbs more than one acre of land surface.

This bill would prohibit a public entity, charter city, or charter county from delegating to a contractor the development of a plan, as defined, used to prevent or reduce water pollution or runoff on a public works contract, except as provided. The bill would also prohibit a public entity, charter city, or charter county from requiring a contractor on a public works contract that includes compliance with a plan to assume responsibility for the completeness and accuracy of a plan developed by that entity. The bill would provide that these prohibitions do not apply to contracts that use specified procurement methods. The bill would also declare that this is a matter of statewide concern. The bill would state that its provisions are declaratory of existing law, as specified.

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 the Legislature finds there is no mandate contained in the bill that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement pursuant to these constitutional and statutory provisions.

Existing law prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.

Existing law requires the State Water Resources Control Board and the 9 California regional water quality control boards to prescribe waste discharge requirements in accordance with the National Pollutant Discharge Elimination System (NPDES) permit program established by the federal Clean Water Act and the Porter-Cologne Water Quality Control Act. Existing law regulates the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturbs one or more acres of land surface, or that is part of a common plan of development or sale that disturbs more than one acre of land surface.

This bill would prohibit a public entity, charter city, or charter county from delegating to a contractor the development of a plan, as defined, used to prevent or reduce water pollution or runoff on a public works contract, except as provided. The bill would also prohibit a public entity, charter city, or charter county from requiring a contractor on a public works contract that includes compliance with a plan to assume responsibility for the completeness and accuracy of a plan developed by that entity. The bill would also declare that this is a matter of statewide concern. The bill would state that its provisions are declaratory of existing law, as specified.

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 the Legislature finds there is no mandate contained in the bill that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement pursuant to these constitutional and statutory provisions.

Date of Hearing: August 3, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 1170

Author:(Wieckowski) – As Amended Ver:August 1, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY: This bill prohibits local public agencies, including charter cities, from delegating to a contractor the development of a storm water pollution prevention plan (SWPPP), a water pollution control program, or any other plan required by a Regional Board to prevent or reduce water pollution or runoff on a public works project. This bill also prohibits public agencies from requiring a contractor on a public works contract that requires compliance with any of these plans to assume responsibility for the completeness and accuracy of the plan developed by that entity. This bill exempts state agencies from its requirements, as well as projects that use DB, best value, and construction manager at risk procurement methods.

This bill states that it is of statewide concern to require a public entity, charter city, or charter county to be responsible for the development of, and completeness and accuracy of, a plan to prevent or reduce water pollution or runoff on a public works project, and states that it is declaratory of existing law. It also finds that there is no state-mandated local cost contained in the bill.

FISCAL EFFECT:

Unknown significant local costs to cities, counties, special districts, and school districts, potentially reimbursable by the state General Fund. By prohibiting a local agency form requiring a contractor on a design-bid-build project to develop a SWPPP or assuming responsibility for completeness and accuracy of a plan, this bill effectively forces the local agency to prepare a SWPPP in-house or to contract with another entity to perform those functions, prior to soliciting bids for the construction of a project. Local agencies would likely incur additional costs as a result. Whether any increased local costs would be subject to reimbursement from the state is unknown, and subject to a determination by the Commission on State Mandates. To the extent the Commission finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs.

Staff notes that while the bill includes a legislative finding that it contains no mandate that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement, the Legislature cannot limit a constitutional right to reimbursement through a finding that an act does not impose a mandate. The Commission on State Mandates has cited several decisions where the courts have determined that the evidence contradicts what is in statute. For example, the courts noted in Carmel Valley Fire Protection District v. State of California (1987) 190 Cal.App. 3rd 521, 541, that the Legislature itself concluding that costs are not reimbursable through findings, disclaimers, and control language is a “transparent attempt to do indirectly that which cannot lawfully be done directly.” In addition, in Long Beach Unified School District v. State of California (1990) 225 Cal.App. 3rd 155, 184, the courts noted, in reference to a finding by the Legislature that an Executive Order does not impose a state mandated local program, that unsupported legislative disclaimers are insufficient to defeat a constitutional right to reimbursement.

COMMENTS:

1. Purpose. According to the author, "Local agencies have begun requiring contractors to prepare the state required storm water plan and submit it as part of the bid. At this point, the contractor or subcontractor cannot price the storm water plan because it hasn’t been designed yet – so the result is the contractor or subcontractor is forced to estimate the cost of implementing a storm water plan – and include that cost into a bid – even before the plan has been designed. This shift in responsibility: (1) undermines the intent of the Permit; (2) results in an inefficient allocation of responsibility and risk; and (3) is contrary to several existing laws.”
2. Background. A SWPPP is a comprehensive, detailed, site-specific, written document that identifies potential sources of stormwater pollution on a construction site; describes stormwater control measures and Best Management Practices (BMPs) that will be used to reduce or eliminate pollutants in stormwater discharges from the project site; and, identifies the procedures the operator of the project site will implement to comply with Permit terms and conditions.

In order for a construction site to remain in compliance with the Clean Water Act's NPDES permitting program, a SWPPP must be developed and maintained throughout the entire construction project. As the project progresses and goes through changes, the SWPPP must be revised to reflect those changes. The SWPPP is comprised of site maps, BMP details, inspection reports, spill reports, corrective action logs and associated waivers.

A project’s SWPPP may be furnished by the project owner or a contractor, but in either case it must be prepared and certified by Qualified SWPPP Developer (QSD), who must be a registered engineer or other licensed professional. Many other SWPPP tasks (i.e. site inspections) must be conducted directly by, or under the supervision of, a QSD or Qualified SWPPP Practitioner (QSP). There are extensive qualification and training requirements for both the QSD and QSP.

The Permit is typically held in the name of the property owner. Consequently, the party required to ensure compliance with the Permit is the property owner, not the contractor. The Permit also requires the discharger (i.e., owner) to file Permit registration documents, annual reports and other compliance information. The discharger must certify that the information provided regarding the project site is accurate and complete. The discharger must allow entry to the project site for inspections and provide records required to be kept under the Permit.

Typically, the owner of the construction site is designated the “discharger” from the site and is therefore the “Legally Responsible Person” under the SWRCB permit. Consequently, the party required to ensure compliance with permit terms is the property owner, not the contractor. Any person who violates permit conditions is subject to a civil penalty of up to $37,500 per calendar day of a violation, plus sanctions provided by federal law. It is common practice for public agencies to delegate the responsibility for preparing a SWPPP to a contractor because the contractor has control over the sequencing of various aspects of a construction project, which may have an impact on strategies for controlling stormwater runoff.

1. State Water Board. According to staff at the State Water Board, the practice of delegating development of an SWPPP to the contractor is neither new nor unusual. This is frequently the practice they see in construction projects that must obtain a Permit and develop an SWPPP. They note that the discharger, or the responsible party for the Permit, is named on the Permit and is always the owner/agency, not the contractor. Thus, responsibility for compliance with the Permit remains with the owner/agency, regardless of which party develops the SWPPP.

Water Board staff also asserts that most municipalities don’t have the expertise to develop SWPPPs and don't have the resources to retain QSDs on staff. QSDs are typically employed by environmental consulting firms that perform the work of developing SWPPPs under contract, either with a contractor (which is more common), or with the owner/agency. (Some large contracting firms keep QSDs on staff, but many smaller firms don't have the resources to do so.)

1. Arguments in Support: The Associated General Contractors, sponsor of this measure, write, "SB 1170 ensures that adequate resources are allocated to the pollution prevention planning process by clarifying that local agencies are responsible for the preparation of Stormwater Pollution Prevention Plans ('SWPPP') required on public works projects. SB 1170 prohibits local agency owners from delegating responsibility to contractors to assume responsibility for SWPPP design.

"Also, contrary to arguments by the local agencies, the contractor is not in the best position to design the stormwater plan. An owner's QSD is best suited to design a robust SWPPP given a better understanding of the local topography, hydrology and site. Most projects are planned and designed over a period of 12 months or more. This process includes a geology and hydrology study, and civil engineering of storm drain systems to carry and control runoff. This robust planning and design process is when the SWPPP is best prepared. SB 1170 makes it so."

1. Arguments in Opposition: Opponents, primarily cities, counties, and other local agencies, state, "SWPPPs are currently created in accordance with the general contractor's construction plans. As construction progresses, SWPPPs must often be modified to accommodate the constantly changing conditions of a construction site. The general contractor is in the best position to create the construction plan and contract for the corresponding SWPPP. A general contractor-developed SWPPP can incorporate an optimal construction sequence selected by the contractor, thereby maximizing efficiency and reducing costs. A separate entity developing a SWPPP would have to assume a sequence of work that might occur under one construction scenario but not another.

"AB 1170 would turn this standing process on its head by prohibiting public agencies from contracting with the general contractor to develop a SWPPP and statutorily restricting their remaining options to an engineer or architect. Public agencies, engineers and architects simply do not have the direct control over the day-to-day construction, let alone the expertise, to perform this function."

1. Prior Legislation. AB 1315 (Alejo) of 2015, held on this Committee’s Suspense File, was similar to this bill, but that bill did not exempt state agencies or contracts using alternate procurement methods, did not specify it was declaratory of existing law, and did not include language finding that there was no mandate in the bill.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: June 29, 2016

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Susan Talamantes Eggman, Chair

SBPCA Bill Id:SB 1170

Author:(Wieckowski) – As Amended Ver:May 31, 2016

SENATE VOTE: 36-1

SUBJECT: Public contracts: water pollution prevention plans: delegation.

SUMMARY: Prohibits local public agencies, including charter cities, from requiring contractors to develop, or assume responsibility for the completeness and accuracy of, plans to prevent or reduce water pollution or runoff on public works projects. Specifically, this bill:

1. Defines "plan" to mean a stormwater pollution prevention plan (SWPPP), water pollution control program, or any other plan required by a regional water quality control board to prevent or reduce water pollution or runoff on a public works project, pursuant to State Water Resources Control Board (State Water Board) Order No. 2009-0009-DWQ.
2. Defines "plan developer" to mean a qualified stormwater pollution prevention plan developer (QSD) or a qualified stormwater pollution prevention plan practitioner (QSP), as those terms are defined in Appendix 5 of State Water Board Order No. 2009-0009-DWQ.
3. Prohibits a public entity, charter city, or charter county from delegating to a contractor the development of a plan on a public works contract.
4. Exempts state agencies from 3), above.
5. Provides that 3), above, shall not apply to a contract for architectural or engineering services relating to the development of a plan on a public works contract.
6. Provides that this bill's provisions do not restrict a public entity, charter city, or charter county from contracting with a duly licensed architect or engineer for the design of a plan.
7. Prohibits a public entity, charter city, or charter county from requiring a contractor on a public works contract that includes compliance with a plan to assume responsibility for the completeness and accuracy of the plan developed by that entity.
8. Provides that 3) through 7), above, shall apply to all public works contracts, except contracts that use design-build (DB), best value or construction manager at risk procurement methods, if the contractor or construction manager at risk is required by the bid or procurement documents to retain a plan developer for the project owners.
9. Provides that nothing in this bill shall be construed to prohibit a local public entity, charter city, or charter county from requiring a bidder or contractor on a public works contract to review any applicable plan and report any errors or omissions noted to the public entity or its plan developer. The review by the contractor shall be limited to the contractor’s capacity as a contractor and not as a licensed design professional or plan developer.
10. Finds and declares that it is of statewide concern to require a public entity, charter city, or charter county to be responsible for the development of, and completeness and accuracy of, a plan to prevent or reduce water pollution or runoff on a public works project.
11. States that the addition to the Public Contract Code made by this bill does not constitute a change in, but is declaratory of, existing law, as specified.
12. Finds that there is no mandate contained in this bill that will result in costs incurred by a local agency or school district for a new program or higher level of service, which require reimbursement, pursuant to Section 6 of Article XIII B of the California Constitution and Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

EXISTING LAW:

1. Regulates the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturb one or more acres of land surface, or that are part of a common plan of development or sale that disturbs more than one acre of land surface.
2. Requires the State Water Board and the nine California Regional Water Quality Control Boards (Regional Boards) to prescribe waste discharge requirements in accordance with the federal National Pollutant Discharge Elimination System (NPDES) permit program established by the federal Clean Water Act and California's Porter-Cologne Water Quality Control Act.
3. Regulates NPDES permit requirements under a General Construction Permit (Permit) via the State Water Board's Order.
4. Prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.

FISCAL EFFECT: According to the Senate Appropriations Committee, "Unknown significant local costs to cities, counties, special districts, and school districts, potentially reimbursable by the state General Fund. To the extent the Commission on State Mandates finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs." See comment 7), below, regarding this bill's mandate/reimbursement language.

COMMENTS:

1. Bill Summary. This bill prohibits local public agencies, including charter cities, from delegating to a contractor the development of a SWPPP, a water pollution control program, or any other plan required by a Regional Board to prevent or reduce water pollution or runoff on a public works project. This bill also prohibits public agencies from requiring a contractor on a public works contract that requires compliance with any of these plans to assume responsibility for the completeness and accuracy of the plan developed by that entity. This bill exempts state agencies from its requirements, as well as projects that use DB, best value, and construction manager at risk procurement methods.

This bill states that it is of statewide concern to require a public entity, charter city, or charter county to be responsible for the development of, and completeness and accuracy of, a plan to prevent or reduce water pollution or runoff on a public works project, and states that it is declaratory of existing law. It also finds that there is no state-mandated local cost contained in the bill. This bill is sponsored by the Associated General Contractors.

1. Background. In 1948, Congress passed the first version of the Federal Water Pollution Control Act, or the Clean Water Act. The NPDES was amended into the Act in 1972, with a focus on point sources of pollution, such as sewage treatment and wastewater from industrial and manufacturing facilities. After 1972, studies began showing that non-point sources, including stormwater runoff, were a major contributor to surface water pollution. This led to further amendments to the Act that created a framework for regulating stormwater. In 1990, the U.S. Environmental Protection Agency published final regulations establishing permit requirements for stormwater discharges associated with industrial activities, including construction activities. California's first Permit was adopted in 1992. The latest Permit, which is regulated by the State Water Board's Order, became effective July 1, 2010.

Owners of construction projects that disturb one or more acres of land must comply with the Permit, which regulates the discharge of stormwater and non-stormwater (i.e., improper dumping, spills, leakage from storage tanks) from certain construction activities and is enforced by California's nine Regional Boards. The Permit requires, among other things, the development of a site-specific SWPPP that demonstrates compliance with the Permit.

A SWPPP is a comprehensive, detailed, site-specific, written document that identifies potential sources of stormwater pollution on a construction site; describes stormwater control measures and Best Management Practices (BMPs) that will be used to reduce or eliminate pollutants in stormwater discharges from the project site; and, identifies the procedures the operator of the project site will implement to comply with the terms and conditions of the Permit.

SWPPPs are ever-changing documents. In order for a construction site to remain in compliance with the Clean Water Act's NPDES permitting program, a SWPPP must be developed and maintained throughout the entire construction project. As the project progresses and goes through changes, the SWPPP must be revised to reflect those changes. The SWPPP is comprised of site maps, BMP details, inspection reports, spill reports, corrective action logs and associated waivers.

A project’s SWPPP may be furnished by the project owner or prepared by a contractor’s SWPPP developer.

1. Who Develops the SWPPP? The Permit requires SWPPPs to be prepared and certified by a QSD. Many other SWPPP tasks (i.e. inspections) must be conducted directly by, or under the supervision of, a QSD or QSP. There are extensive qualification and training requirements for both the QSD and QSP. To become a QSD or a QSP, a person must complete a training course offered by a qualified California Construction General Permit Trainer of Record, pass an exam, and register and be certified by the California Stormwater Quality Association. In addition, each qualification requires an underlying pre-registration or pre-certification.

To become a QSD, a person must be one of the following: Registered Civil Engineer; Registered Professional Geologist; Registered Landscape Architect; Registered Professional Hydrologist; Certified Professional in Erosion and Sediment Control (CPESC); Certified Professional in Storm Water Quality (CPSWQ); or, Professional in Erosion and Sediment Control registered through the National Institute for Certification in Engineering Technologies.

To be a QSP, one must be a QSD or be one of the following: Certified Erosion, Sediment, and Storm Water Inspector (CESSWI) or a Certified Inspector of Sediment and Erosion Control (CISEC).

1. Responsibility and Consequences. The Permit defines the “discharger” as “[t]he Legally Responsible Person or entity subject to the General Permit.” The Permit defines the Legally Responsible Person as falling into specified eligible categories, including “[a] person, company, agency or other entity that possesses a real property interest. . . .in the land upon which the construction or land disturbance activities will occur for the regulated site.” The Permit states a contractor is not qualified to be the Legally Responsible Person, unless they fall into limited categories (those employed and duly authorized on U.S. Army Corp of Engineers Projects or those engaged in pollution and remediation projects).

The Permit is typically held in the name of the property owner. Consequently, the party required to ensure compliance with the Permit is the property owner, not the contractor. The Permit also requires the discharger (i.e., owner) to file Permit registration documents, annual reports and other compliance information. The discharger must certify that the information provided regarding the project site is accurate and complete. The discharger must allow entry to the project site for inspections and provide records required to be kept under the Permit.

There are serious potential costs for failure to comply with the Permit. Any person who violates a condition of the Permit is subject to a civil penalty, which could be as high as $37,500 per calendar day of a violation, plus sanctions provided by the Clean Water Act.

1. Author's Statement. According to the author, "Local agencies have begun requiring contractors to prepare the state required storm water plan and submit it as part of the bid. At this point the contractor or subcontractor cannot price the storm water plan because it hasn’t been designed yet – so the result is the contractor or subcontractor is forced to estimate the cost of implementing a storm water plan – and include that cost into a bid – even before the plan has been designed. This shift in responsibility: (1) undermines the intent of the Permit; (2) results in an inefficient allocation of responsibility and risk; and (3) is contrary to several existing laws.

"This bill ensures that adequate resources are allocated to the pollution prevention planning process by clarifying that public owners are responsible for the preparation of Stormwater Pollution Prevention Plans ('SWPPP') required on public works projects. The bill prohibits public owners from delegating responsibility to contractors for SWPPP design. Additionally, the bill clarifies existing law which requires licensed design professionals to create engineering and architectural plans. Existing law already bars public owners from making contractors assume responsibility for the design of stormwater plans. The bill also clarifies and codifies the intent of the permit designation of project owners as the Legally Responsible Party."

The sponsors of this bill indicate that they are unaware of any litigation being brought as a result of local agency practices, and are seeking a legislative solution, instead.

1. Contracting Agencies' Perspective. According to staff at the State Water Board, the practice of delegating development of a SWPPP to the contractor is neither new nor unusual. This is frequently the practice they see in construction projects that must obtain a Permit and develop a SWPPP. They note that the discharger, or the responsible party for the Permit, is named on the Permit and is always the owner/agency, not the contractor. Thus, responsibility for compliance with the Permit remains with the owner/agency, regardless of which party develops the SWPPP.

State Water Board staff also assert that most municipalities don’t have the expertise to develop SWPPPs and don't have the resources to retain QSDs on staff. QSDs are typically employed by environmental consulting firms that perform the work of developing SWPPPs under contract, either with a contractor (which is more common), or with the owner/agency. (Some large contracting firms keep QSDs on staff, but many smaller firms also don't have the resources to do so.)

Local contracting agencies indicate that they often require contractors to design and submit SWPPPs because a contractor's plan or approach for construction dictates the sequence of excavation, backfill, and temporary stockpiling of material on a typical project. They contend that a contractor-designed SWPPP can incorporate an optimal construction sequence selected by the contractor and incorporate it into their SWPPP, thereby maximizing efficiency and reducing costs.

An owner-designed SWPPP would necessarily have to assume a sequence of excavation, etc. (and effects upon drainage) that might occur under one construction sequence/scenario. This might not be the optimum sequence that the contractor would elect to use (and would have incorporated into its own SWPPP plan). For this reason, it makes more sense to require the party actually responsible for the construction sequence of operations to be the one implementing its sequence into the design of a SWPPP. An owner-designed SWPPP would unnecessarily lock in all bidders to one single type of construction sequence/plan envisioned by the owner prior to the bid opening, one that might not necessarily be the lowest cost option.

1. State Mandate/Reimbursement Language. This bill finds that there is no mandate contained in the bill that will result in costs incurred by a local agency or school district for a new program or higher level of service that require reimbursement. However, the Senate Appropriations Committee noted the following in its analysis of this bill: "By prohibiting a public agency from requiring a contractor on a design-bid-build project to develop a SWPPP or assuming responsibility for completeness and accuracy of a plan, this bill effectively forces the public agency to prepare a SWPPP in-house, or to contract with another entity to perform those functions, prior to soliciting bids for the construction of a project…SB 1170 would shift full legal responsibility for construction project water quality, and make public entities responsible for violations of permit requirements, even if the contractor was at fault for a discharge.

"Local agencies would likely…incur additional costs on public works projects...Some of these costs would be mitigated by lower bids on construction contracts since contractors would not include costs to prepare a SWPPP in their bids, which are typically marked up to mitigate risk factors. However, these costs and additional risk and liability factors would be shifted from the contractor to the local agency. Whether any increased local costs would be subject to reimbursement from the state is unknown, and subject to a determination by the Commission on State Mandates that the bill’s requirements constitute a higher level of service. Staff notes that the California Supreme Court has opined that 'simply because a state law or order may increase the costs borne by local government in providing services, this does not necessarily establish that the law or order constitutes an increased or higher level of the resulting service to the public under article XIII B, section 6, and Government Code section 17514.' (San Diego Unified School Dist. V. Commission on State Mandates (2004) 33 Cal.4^th 859, 877).

"Staff notes that while the bill includes a legislative finding that it contains no mandate that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement, the Legislature cannot limit a constitutional right to reimbursement through a finding that an act does not impose a mandate. The Commission on State Mandates has cited several decisions where the courts have determined that the evidence contradicts what is in statute. For example, the courts noted in Carmel Valley Fire Protection District v. State of California (1987) 190 Cal.App. 3rd 521, 541, that the Legislature itself concluding that costs are not reimbursable through findings, disclaimers, and control language is a 'transparent attempt to do indirectly that which cannot lawfully be done directly.' In addition, in Long Beach Unified School District v. State of California (1990) 225 Cal.App. 3rd 155, 184, the courts noted, in reference to a finding by the Legislature that an Executive Order does not impose a state mandated local program, that unsupported legislative disclaimers are insufficient to defeat a constitutional right to reimbursement.

"To the extent the Commission finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs."

1. Previous Legislation. AB 1315 (Alejo) of 2015 was similar to this bill, but AB 1315 did not exempt state agencies or contracts using alternate procurement methods, did not specify it was declaratory of existing law, and did not include language finding that there was no mandate in the bill. AB 1315 was held in the Assembly Appropriations Committee.
2. Arguments in Support. The Associated General Contractors, sponsor of this measure, write, "SB 1170 ensures that adequate resources are allocated to the pollution prevention planning process by clarifying that local agencies are responsible for the preparation of Stormwater Pollution Prevention Plans ('SWPPP') required on public works projects.
   SB 1170 prohibits local agency owners from delegating responsibility to contractors to assume responsibility for SWPPP design.

"Some local agencies have raised objections to SB 1170, claiming that shifting stormwater responsibility to contractors are a longstanding practice under the revised sormwater permit process. This is not true. The State Construction Permit was updated in 2009 by the State Water Resources Control Board and took effect July 1, 2010. Among the many changes, the State Board adopted the 2006 Blue Ribbon Panel of Experts recommendation to develop specific and appropriate training of Storm Water Pollution Prevention Plan (SWPPP) personnel. A qualified SWPPP Developer (QSD) certification is required to design and certify a SWPPP. A Qualified SWPPP Practitioner (QSP) certification is overseeing of actual infield SWPPP implementation. This was not required prior to 2010, just five and a half years ago – hardly a long standing time frame.

"Also, contrary to arguments by the local agencies, the contractor is not in the best position to design the stormwater plan. An owner's QSD is best suited to design a robust SWPPP given a better understanding of the local topography, hydrology and site. Most projects are planned and designed over a period of 12 months or more. This process includes a geology and hydrology study, and civil engineering of storm drain systems to carry and control runoff. This robust planning and design process is when the SWPPP is best prepared.
SB 1170 makes it so."

1. Arguments in Opposition. The Association of California Healthcare Districts, the Association of California School Administrators, the Association of California Water Agencies, the California Association of School Business Officials, the California Association of Sanitation Agencies, the California Municipal Utilities Association, the California School Boards Association, the California Special Districts Association, the California State Association of Counties, the California State University, the Coalition for Adequate School Housing, the League of California Cities, the Rural County Representatives of California, the Three Valleys Municipal Water District, and Urban Counties of California, in opposition to this bill, state, "SWPPPs must be written, amended and certified by qualified personnel who are knowledgeable in the principles and practice of erosion and sediment controls and possess the skills needed to assess conditions at the construction site that could impact stormwater quality. Public agencies rely on the expertise of qualified SWPPP developers, known as QSDs, to conduct this work, as agencies do not have the resources nor the regular workload required to employ such personnel throughout the year.

"SWPPPs are currently created in accordance with the general contractor's construction plans. As construction progresses, SWPPPs must often be modified to accommodate the constantly changing conditions of a construction site. The general contractor is in the best position to create the construction plan and contract for the corresponding SWPPP. A general contractor-developed SWPPP can incorporate an optimal construction sequence selected by the contractor, thereby maximizing efficiency and reducing costs.

"SB 1170 would turn this standing process on its head by prohibiting public agencies from contracting with the general contractor to develop a SWPPP and statutorily restricting their remaining options to an engineer or architect. A separate entity developing a SWPPP would have to assume a sequence of work that might occur under one construction scenario but not another. Public agencies, engineers and architects simply do not have the direct control over the day-to-day construction, let alone the expertise, to perform this function.

"Ultimately, the success or failure of a SWPPP lies with the general contractor carrying out the plan. If the Legislature statutorily shifts the development and liability of the SWPPP to the public agency, or to a design professional or architect, it will create confusion and conflict within the public works process. SB 1170 will only further disconnect the entity responsible for the development of the SWPPP from the entity that performs the work related to the SWPPP. This is akin to asking the public agency or design professional to separately plan and contract for the security of the general contractor’s equipment on the job site, the number of portable restrooms needed or any other function that is intimately connected to the performance and sequence of a construction project."

REGISTERED SUPPORT / OPPOSITION:

Support

Associated General Contractors [SPONSOR]

California Chapters of the National Electrical Contractors Association

California Legislative Conference of the Plumbing, Heating and Piping Industry

California Precast Concrete Association

California Professional Association of Specialty Contractors

California State Council of Laborers

Norther California Allied Trades

United Contractors

Wall and Ceiling Alliance

Opposition

Association of California Healthcare Districts

Association of California School Administrators

Association of California Water Agencies

California Association of Sanitation Agencies

California Association of School Business Officials

California Municipal Utilities Association

California School Boards Association

California Special Districts Association

California State Association of Counties

California State University

Cities of Camarillo and Laguna Hills

City and County of San Francisco

Coachella Valley Water District

Coalition for Adequate School Housing

Counties of Contra Costa, San Diego, San Joaquin and Yuba

League of California Cities

Rural County Representatives of California

San Francisco Public Utilities Commission

Santa Clara Valley Water District

Three Valleys Municipal Water District

Urban Counties of California

Western Placer Waste Management Authority

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958

 THIRD READING  

Bill No: SB 1170

Author:

: 5/31/16

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 3/30/16

AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 4/20/16

AYES: Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

SUBJECT:

SOURCE: Associated General Contractors

DIGEST: This bill prohibits local agencies from requiring a contractor to prepare or assume responsibility for certain plans that prevent stormwater runoff from construction sites.

ANALYSIS:

Existing law:

1. Provides, under the federal Clean Water Act and the state Porter-Cologne Water Quality Control Act:
   1. Charges the State Water Resources Control Board (SWRCB) with the regulation and protection of water quality.
   2. Prohibits the discharge of pollutants to surface waters unless the discharger obtains a permit from SWRCB.
   3. Establishes the National Pollutant Discharge Elimination System (NPDES) permit program requiring the SWRCB and the nine California regional water quality control boards to prescribe waste discharge requirements which, among other things, regulate the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturb one or more acres of land surface, or that are part of a common plan of development or sale that disturb more than one acre of land surface.
   4. Requires, by regulation, the development and execution of Storm Water Pollution Prevention Plans (SWPPPs) to manage discharges of pollutants from construction sites.
2. Prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.
3. Requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder.
4. Authorizes local governments to use alternative procurement methods, such as design-build or construction manager at risk, on certain projects in lieu of soliciting bids and awarding them to the lowest bidder.
5. Requires engineering and architectural plans to be developed by licensed engineers or architects.

This bill:

1. Prohibits a public entity, charter city, or charter county from delegating the development of certain plans associated with public works projects and from requiring a contractor on a public works contract to assume responsibility for the completeness and accuracy of those plans.
2. Defines “plan” to include a SWPPP, water pollution control program, or any other plan required by the regional boards to prevent or reduce water pollution or runoff on a public works project.
3. Authorizes public entities, charter cities, and charter counties to contract separately with a licensed architect or engineer for design of a plan, and they may require a bidder to review an applicable plan and report errors or omissions.
4. Limits those reviews to the contractor’s capacity as a contractor.
5. Exempts certain design-build, best-value, and construction manager at risk projects from its provisions.
6. Exempts state departments and agencies from its provisions.

Background

State law requires public and private owners of construction projects that disturb one or more acres of land to develop a SWPPP which identifies potential sources of stormwater pollution on a site, describes control measures to manage stormwater pollution, and identifies the procedures the operator of the project site will implement to prevent discharges.

A project’s SWPPP may be developed by the project owner or prepared by a contractor’s SWPPP developer. Typically, the owner of the construction site is designated the “discharger” from the site and is therefore the “Legally Responsible Person” for ensuring compliance with stormwater regulations.

Many public entities require contractors to include in their bids the cost of preparing and implementing SWPPPs, and have begun requiring contract provisions that indemnify the public entity against penalties associated with violations of the Permit and prohibit change orders associated with SWPPPs. In addition, construction costs in California declined sharply for several years beginning in 2007, creating intense competition for projects among contractors, reducing margins. Some contractors want to restrict the ability of public agencies to require contractors to prepare SWPPPs as part of a public works contract.

Comments

1. Purpose of the bill. Public agencies that design construction projects and put them out to bid have begun to require contractors to develop SWPPPs, often in as little as three weeks, as a part of a bid package for the project. Since public agencies usually must award the contract to the lowest responsible bidder, some contractors lowball the cost and contents of SWPPPs, resulting in ineffective SWPPPs that don’t serve their purpose to stop stormwater discharges. Public agencies have responded by prohibiting change orders and requiring contractors to indemnify the agency. This effectively shifts legal responsibility for the plan onto contractors. Public agencies must receive other environmental permits prior to a project going out to bid; current practice around SWPPPs is therefore out of step with other laws. By ensuring that development and compliance with the SWPPP rest with the public agency, SB 1170 furthers the intent of existing laws that prohibit holding contractors liable for the responsibilities of public entities.
2. Practice makes perfect. Contractors work on multiple construction projects over time, or even simultaneously. Accordingly, many develop preexisting relationships with the practitioners that develop SWPPPS. Some larger public agencies may also have those relationships, but it doesn’t make sense for smaller ones that rarely build new public works to do the same. Moreover, SWPPPs are ever-changing documents. Construction projects frequently change in response to unforeseen circumstances or issues with the site, and the SWPPP must be revised to reflect those changes. Contractors who are actually performing work on a site are in the best position to know when the plan must be modified. Requiring the contractor to develop and maintain the SWPPP—and ensuring that the contractor bears the risk of violating stormwater laws—sets up the right incentives for the people performing the work to ensure that the SWPPP effectively protects water quality. SB 1170 removes these incentives and increase the burden on unprepared local agencies, potentially resulting in illegal pollutant discharges, fines to the state and local governments, and water quality problems.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Unknown significant local costs to cities, counties, special districts, and school districts, potentially reimbursable by the state General Fund. To the extent the Commission on State Mandates finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs.

SUPPORT: (Verified 5/31/16)

Associated General Contractors (source)

American Subcontractors Association

California Association of Sheet Metal and Air Conditioning Contractors, National Association

California Chapters of the National Electrical Contractors Association

California Legislative Conference of the Plumbing, Heating and Piping Industry

California-Nevada Conference of Operating Engineers

California Precast Concrete Association

California Professional Association of Specialty Contractors

International Conference of Operating Engineers

Northern California Allied Trades

Southern California Contractors Association

State Council of Laborers

Union Roofing Contractors Association

United Contractors

Wall and Ceiling Alliance

OPPOSITION: (Verified 6/1/16)

Association of California Healthcare Districts

Association of California School Administrators

Association of California Water Agencies

California Association of Sanitation Agencies

California Association of School Business Officials

California Municipal Utilities Association

California School Boards Association

California Special Districts Association

California State Association of Counties

California State University

City/County Association of Governments of San Mateo County

City of Camarillo

City of Cathedral City

City of Emeryville

City of Laguna Hills

City of Rancho Mirage

City of San Bruno

Coalition for Adequate School Housing

County of San Joaquin

County of Yolo

League of California Cities

Rural County Representatives of California

Three Valleys Municipal Water District

Transportation Agency for Monterey County

Urban Counties of California

Prepared by:

6/1/16 9:31:06

**** END ****

 THIRD READING  

Bill No: SB 1170

Author:

: 5/31/16

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 3/30/16

AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 4/20/16

AYES: Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

SUBJECT:

SOURCE: Associated General Contractors

DIGEST: This bill prohibits local agencies from requiring a contractor to prepare or assume responsibility for certain plans that prevent stormwater runoff from construction sites.

ANALYSIS:

Existing law:

1. Provides, under the federal Clean Water Act and the state Porter-Cologne Water Quality Control Act:
   1. Charges the State Water Resources Control Board (SWRCB) with the regulation and protection of water quality.
   2. Prohibits the discharge of pollutants to surface waters unless the discharger obtains a permit from SWRCB.
   3. Establishes the National Pollutant Discharge Elimination System (NPDES) permit program requiring the SWRCB and the nine California regional water quality control boards to prescribe waste discharge requirements which, among other things, regulate the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturb one or more acres of land surface, or that are part of a common plan of development or sale that disturb more than one acre of land surface.
   4. Requires, by regulation, the development and execution of Storm Water Pollution Prevention Plans (SWPPPs) to manage discharges of pollutants from construction sites.
2. Prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.
3. Requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder.
4. Authorizes local governments to use alternative procurement methods, such as design-build or construction manager at risk, on certain projects in lieu of soliciting bids and awarding them to the lowest bidder.
5. Requires engineering and architectural plans to be developed by licensed engineers or architects.

This bill:

1. Prohibits a public entity, charter city, or charter county from delegating the development of certain plans associated with public works projects and from requiring a contractor on a public works contract to assume responsibility for the completeness and accuracy of those plans.
2. Defines “plan” to include a SWPPP, water pollution control program, or any other plan required by the regional boards to prevent or reduce water pollution or runoff on a public works project.
3. Authorizes public entities, charter cities, and charter counties to contract separately with a licensed architect or engineer for design of a plan, and they may require a bidder to review an applicable plan and report errors or omissions.
4. Limits those reviews to the contractor’s capacity as a contractor.
5. Exempts certain design-build, best-value, and construction manager at risk projects from its provisions.
6. Exempts state departments and agencies from its provisions.

Background

State law requires public and private owners of construction projects that disturb one or more acres of land to develop a SWPPP which identifies potential sources of stormwater pollution on a site, describes control measures to manage stormwater pollution, and identifies the procedures the operator of the project site will implement to prevent discharges.

A project’s SWPPP may be developed by the project owner or prepared by a contractor’s SWPPP developer. Typically, the owner of the construction site is designated the “discharger” from the site and is therefore the “Legally Responsible Person” for ensuring compliance with stormwater regulations.

Many public entities require contractors to include in their bids the cost of preparing and implementing SWPPPs, and have begun requiring contract provisions that indemnify the public entity against penalties associated with violations of the Permit and prohibit change orders associated with SWPPPs. In addition, construction costs in California declined sharply for several years beginning in 2007, creating intense competition for projects among contractors, reducing margins. Some contractors want to restrict the ability of public agencies to require contractors to prepare SWPPPs as part of a public works contract.

Comments

1. Purpose of the bill. Public agencies that design construction projects and put them out to bid have begun to require contractors to develop SWPPPs, often in as little as three weeks, as a part of a bid package for the project. Since public agencies usually must award the contract to the lowest responsible bidder, some contractors lowball the cost and contents of SWPPPs, resulting in ineffective SWPPPs that don’t serve their purpose to stop stormwater discharges. Public agencies have responded by prohibiting change orders and requiring contractors to indemnify the agency. This effectively shifts legal responsibility for the plan onto contractors. Public agencies must receive other environmental permits prior to a project going out to bid; current practice around SWPPPs is therefore out of step with other laws. By ensuring that development and compliance with the SWPPP rest with the public agency, SB 1170 furthers the intent of existing laws that prohibit holding contractors liable for the responsibilities of public entities.
2. Practice makes perfect. Contractors work on multiple construction projects over time, or even simultaneously. Accordingly, many develop preexisting relationships with the practitioners that develop SWPPPS. Some larger public agencies may also have those relationships, but it doesn’t make sense for smaller ones that rarely build new public works to do the same. Moreover, SWPPPs are ever-changing documents. Construction projects frequently change in response to unforeseen circumstances or issues with the site, and the SWPPP must be revised to reflect those changes. Contractors who are actually performing work on a site are in the best position to know when the plan must be modified. Requiring the contractor to develop and maintain the SWPPP—and ensuring that the contractor bears the risk of violating stormwater laws—sets up the right incentives for the people performing the work to ensure that the SWPPP effectively protects water quality. SB 1170 removes these incentives and increase the burden on unprepared local agencies, potentially resulting in illegal pollutant discharges, fines to the state and local governments, and water quality problems.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Unknown significant local costs to cities, counties, special districts, and school districts, potentially reimbursable by the state General Fund. To the extent the Commission on State Mandates finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs.

SUPPORT: (Verified 5/31/16)

Associated General Contractors (source)

American Subcontractors Association

California Association of Sheet Metal and Air Conditioning Contractors, National Association (CAL SMACNA)

California Chapters of the National Electrical Contractors Association (NECA)

California Legislative Conference of the Plumbing, Heating and Piping Industry (CLC)

California-Nevada Conference of Operating Engineers

California Precast Concrete Association

California Professional Association of Specialty Contractors

International Conference of Operating Engineers

Northern California Allied Trades

Southern California Contractors Association

State Council of Laborers

Union Roofing Contractors Association

United Contractors

Wall and Ceiling Alliance

OPPOSITION: (Verified 5/31/16)

Association of California Healthcare Districts

Association of California School Administrators

Association of California Water Agencies

California Association of Sanitation Agencies

California Association of School Business Officials

California Municipal Utilities Association

California School Boards Association

California Special Districts Association

California State Association of Counties

California State University

City/County Association of Governments of San Mateo County

City of Cathedral City

City of Emeryville

City of Laguna Hills

City of Rancho Mirage

City of San Bruno

Coalition for Adequate School Housing

County of San Joaquin

County of Yolo

League of California Cities

Rural County Representatives of California

Three Valleys Municipal Water District

Transportation Agency for Monterey County

Urban Counties of California

Prepared by:

5/31/16 20:45:22

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1170 (Wieckowski) - Public contracts: water pollution prevention plans: delegation

Bill Summary:

SB 1170 would prohibit a public agency from requiring a contractor on a design-bid-build project to develop a stormwater pollution prevention plan (SWPPP), or to assume responsibility for completeness and accuracy of a SWPPP.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 27, 2016

Fiscal Impact:

• Unknown significant local costs to cities, counties, special districts, and school districts, potentially reimbursable by the state General Fund. To the extent the Commission on State Mandates finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs.

Author Amendments:

Specify that provisions prohibiting a public agency from delegating the SWPPP development responsibilities to a contractor do not apply to any state department or agency, and make a clarifying change.

-- END --

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1170 (Wieckowski) - Public contracts: water pollution prevention plans: delegation

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 1170 would prohibit a public agency from requiring a contractor on a design-bid-build project to develop a stormwater pollution prevention plan (SWPPP), or to assume responsibility for completeness and accuracy of a SWPPP.

Fiscal Impact:

• Unknown significant costs to the Department of Transportation (Caltrans). Caltrans indicates it would likely incur additional costs on approximately 200 projects each year related to penalties for violations of SWPPP permit requirements (even those resulting from a contractor’s actions), certain staff-related expenses, and potential impacts on overall project costs. (State Highway Account) See staff comments.
  
• Unknown significant costs to the Department of General Services (DGS) related to increased exposure to penalties for violations of SWPPP permit requirements (even those resulting from a contractor’s actions), and additional staffing, training, or contract costs related to SWPPP development and oversight on an estimated 20-100 projects each year. (General Fund) See staff comments.
  
• Unknown potential costs to other state entities that engage in public contracting.
  
• Unknown significant local costs to cities, counties, special districts, and school districts, potentially reimbursable by the state General Fund. Actual state-reimbursable costs would depend upon a determination by the Commission on State Mandates regarding what expenses incurred by a local agency are deemed to be subject to state reimbursement. See staff comments.

Background:

In California, the federal Clean Water Act and the state Porter-Cologne Water Quality Control Act charge the State Water Resources Control Board (SWRCB) with the regulation and protection of water quality. Under these statutes, discharges of pollutants to surface waters are generally prohibited unless the discharger obtains a permit from SWRCB. In response to federal regulations, the SWRCB adopted a Construction General Permit requirement that covers stormwater runoff as a result of construction activities. Those permit requirements were significantly revised in 2009.

Public and private owners of construction projects that disturb one or more acres of land must comply with SWRCB permit requirements that regulate the discharge of stormwater and non-stormwater (such as improper dumping, spills, or leakage from storage tanks) from certain construction activities. The requirements are enforced by SWRCB’s nine Regional Water Quality Control Boards (regional boards). Existing law requires the development of a SWPPP that demonstrates compliance with SWRCB permit requirements. A SWPPP is a comprehensive, detailed, site-specific, written document that identifies potential sources of stormwater, describes control measures and best management practices that will be used to reduce or eliminate pollutants in stormwater discharges, and identifies procedures that the operator of the project site will implement to comply with permit terms and conditions.

A project’s SWPPP may be developed by the project owner or a contractor, but in either case it must be prepared and certified by a Qualified SWPPP Developer (QSD), who must be a registered engineer or other licensed professional. Many other SWPPP tasks (such as site inspections) must be conducted directly by, or under the supervision of, a QSD or Qualified SWPPP Practitioner (QSP), who must also be certified. There are extensive qualification and training requirements for both the QSD and QSP.

Typically, the owner of the construction site is designated the “discharger” from the site and is therefore the “Legally Responsible Person” under the SWRCB permit. Consequently, the party required to ensure compliance with permit terms is the property owner, not the contractor. There are serious potential costs for failure to comply with the permit; any person who violates permit conditions is subject to a civil penalty of up to $37,500 per calendar day of a violation, plus sanctions provided by federal law.

It is common practice for public agencies to delegate the responsibility for preparing a SWPPP to a contractor because the contractor has control over the sequencing of various aspects of a construction project, which may have an impact on strategies for controlling stormwater runoff.

Proposed Law:

SB 1170 would prohibit a public entity, charter city, or charter county from delegating to a contractor the development of a plan, which is defined as a SWPPP, water pollution control program, or any other plan required by a regional water quality control board to prevent or reduce water pollution or runoff on a public works project. The bill would also prohibit those public entities from requiring a contractor to assume responsibility for the completeness and accuracy of the plan developed by the public entity. These prohibitions would not apply to contracts that use the design-build, best value, or construction manager at-risk procurement methods.

Related Legislation:

AB 1315 (Alejo), which was held on the Assembly Appropriations Committee’s Suspense File last year, was nearly identical to this bill, but that bill did not exempt contracts using alternate procurement methods, did not specify it was declaratory of existing law, and did not include language specifying a legislative finding that there is no mandate in the bill.

Staff Comments:

By prohibiting a public agency from requiring a contractor on a design-bid-build project to develop a SWPPP or assuming responsibility for completeness and accuracy of a plan, this bill effectively forces the public agency to prepare a SWPPP in-house, or to contract with another entity to perform those functions, prior to soliciting bids for the construction of a project. This shift of responsibility, and underlying liability, would apply to both state and local public entities that contract for public works projects.

Caltrans estimates the bill’s requirements would apply to approximately 200 public works projects annually that require the preparation of a SWPPP, while DGS estimates it would apply to 20-100 projects each year. State agencies would have to revise guidance manuals, modify training materials, and train staff on new processes. There would also be costs to train and certify staff as QSDs and QSPs to prepare SWPPPs and provide oversight for construction projects, or they may opt to contract out for those services. Caltrans and DGS also indicate that they would need to make assumptions about construction staging, sequencing, and temporary drainage needs when preparing a SWPPP and bid solicitation documents, which may result in an increase in contractor claims and change orders during the construction phase. SB 1170 would shift full legal responsibility for construction project water quality, and make public entities responsible for violations of permit requirements, even if the contractor was at fault for a discharge. In sum, Caltrans and DGS indicate that the bill would result in unknown, but significant, increased costs.

Local agencies would likely also incur additional costs on public works projects for similar reasons. Some of these costs would be mitigated by lower bids on construction contracts since contractors would not include costs to prepare a SWPPP in their bids, which are typically marked up to mitigate risk factors. However, these costs and additional risk and liability factors would be shifted from the contractor to the local agency. Whether any increased local costs would be subject to reimbursement from the state is unknown, and subject to a determination by the Commission on State Mandates that the bill’s requirements constitute a higher level of service. Staff notes that the California Supreme Court has opined that “simply because a state law or order may increase the costs borne by local government in providing services, this does not necessarily establish that the law or order constitutes an increased or higher level of the resulting service to the public under article XIII B, section 6, and Government Code section 17514.”  (San Diego Unified School Dist. v. Commission on State Mandates (2004) 33 Cal.4^th 859, 877).

Staff notes that while the bill includes a legislative finding that it contains no mandate that will result in costs incurred by a local agency or school district for a new program or higher level of service which require reimbursement, the Legislature cannot limit a constitutional right to reimbursement through a finding that an act does not impose a mandate. The Commission on State Mandates has cited several decisions where the courts have determined that the evidence contradicts what is in statute. For example, the courts noted in Carmel Valley Fire Protection District v. State of California (1987) 190 Cal.App. 3^rd 521, 541, that the Legislature itself concluding that costs are not reimbursable through findings, disclaimers, and control language is a “transparent attempt to do indirectly that which cannot lawfully be done directly.” In addition, in Long Beach Unified School District v. State of California (1990) 225 Cal.App. 3^rd 155, 184, the courts noted, in reference to a finding by the Legislature that an Executive Order does not impose a state mandated local program, that unsupported legislative disclaimers are insufficient to defeat a constitutional right to reimbursement.

To the extent the Commission finds that the bill imposes a higher level of service, and identifies local costs that are subject to reimbursement, this bill could result in significant General Fund costs.

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: SB 1170

SUBJECT: Public contracts: water pollution prevention plans: delegation

ANALYSIS:

Existing law:

1. Under the federal Clean Water Act and the state Porter-Cologne Water Quality Control Act:
   1. Charges the State Water Resources Control Board (SWRCB) with the regulation and protection of water quality.
   2. Prohibits the discharge of pollutants to surface waters unless the discharger obtains a permit from SWRCB.
   3. Establishes the National Pollutant Discharge Elimination System (NPDES) permit program requiring the SWRCB and the nine California regional water quality control boards to prescribe waste discharge requirements which, among other things, regulate the discharge of pollutants in stormwater associated with construction activity to waters of the United States from construction sites that disturb one or more acres of land surface, or that are part of a common plan of development or sale that disturb more than one acre of land surface.
2. Prohibits a local public entity, charter city, or charter county from requiring a bidder on a public works contract to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except as specified.

This bill:

1. Prohibits a public entity, charter city, or charter county from delegating to a contractor the development of a plan, as defined, used to prevent or reduce water pollution or runoff on a public works contract, except as provided.
2. Prohibits a public entity, charter city, or charter county from requiring a contractor on a public works contract that includes compliance with a plan to assume responsibility for the completeness and accuracy of a plan developed by that entity.
3. Provide that these prohibitions do not apply to contracts that use:
   1. Design-build.
   2. Best value.
   3. Construction manager at-risk contracts where the construction manager is authorized to retain a plan developer for the project owners.

Background

1. Stormwater Pollution Prevention Plans (SWPPP). Public and private owners of construction projects that disturb one or more acres of land must comply with the NPDES Permit (Permit), which regulates the discharge of stormwater and non-stormwater (such as improper dumping, spills, or leakage from storage tanks) from certain construction activities and is enforced by SWRCB’s nine Regional Water Quality Control Boards (regional boards). The Permit requires, among other things, the development of an SWPPP that demonstrates compliance with the Permit. An SWPPP is a comprehensive, detailed, site-specific, written document that:
   1. Identifies potential sources of stormwater pollution on a construction site;
   2. Describes stormwater control measures and Best Management Practices (BMPs) that will be used to reduce or eliminate pollutants in stormwater discharges from the project site, and
   3. Identifies the procedures the operator of the project site will implement to comply with the terms and conditions of the Permit.

A project’s SWPPP may be developed by the project owner or prepared by a contractor’s SWPPP developer. The Permit requires SWPPPs to be prepared and certified by a Qualified SWPPP Developer (QSD), who must be a registered engineer or other licensed professional. Many other SWPPP tasks (such as site inspections) must be conducted directly by, or under the supervision of, a QSD or Qualified SWPPP Practitioner (QSP), who must also be certified. There are extensive qualification and training requirements for both the QSD and QSP.

Typically, the owner of the construction site is designated the “discharger” from the site and is therefore the “Legally Responsible Person” under the Permit.

Consequently, the party required to ensure compliance with the terms of the Permit is the property owner, not the contractor. There are serious potential costs for failure to comply with the Permit.

Any person who violates a condition of the Permit is subject to a civil penalty, which could be as high as $37,500 per calendar day of a violation, plus sanctions provided by the Clean Water Act.

1. Public Contracting. The Public Contract Code spells out requirements for public entities when contracting for public works projects. The Local Agency Public Construction Act requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. This design-bid-build method is the traditional, and most widely-used, approach to public works construction. However, over the last two decades, legislators have gradually expanded local governments’ authority to procure construction projects using various alternatives to the design-bid-build project delivery method, including “design-build,” “construction manager at risk,” and “best value” contracting. Chief among the potential benefits of these methods is that they transfer some of the risk associated with the construction from the public entity to the contractor.

State law also controls some aspects of project design and execution. The Professional Engineers Act requires, among other things, engineering and architectural plans to be developed by licensed engineers or architects. Title 12 of the Civil Code (commencing with Section 2772) governs indemnity generally and provides that a contract requiring indemnification of a public agency for that agency’s willful misconduct or sole negligence is void. However, Title 12 also provides that parties to a contract, including a public agency, may negotiate liability among themselves for design defects and any other liability relating to the contract. Finally, the Public Contract Code disallows public entities from requiring bidders to assume responsibility for the completeness and accuracy of the designs for public works projects, except on clearly designated design-build projects.

Many public entities require contractors to include in their bids the cost of preparing and implementing SWPPPs, and have begun requiring contract provisions that indemnify the public entity against penalties associated with violations of the Permit and prohibit change orders associated with SWPPPs. In addition, construction costs in California declined sharply for several years beginning in 2007, creating intense competition for projects among contractors, reducing margins. Some contractors want to restrict the ability of public agencies to require contractors to prepare SWPPPs as part of a public works contract.

Contractors work on multiple construction projects over time, or even simultaneously. Accordingly, many develop preexisting relationships with QSDs or employ them within their own organization. Some larger public agencies may also retain their own QSDs, but it doesn’t make sense for smaller ones that rarely build new public works to do the same. SB 1170 allows local agencies to contract separately with an engineer or architect for an SWPPP, but this simply puts a public agency in the position of being the general contractor for the project—requiring experience and relationships which smaller agencies may not have. Moreover, SWPPPs are ever-changing documents. Construction projects frequently change in response to unforeseen circumstances or issues with the site, and the SWPPP must be revised to reflect those changes. Contractors who are actually performing work on a site are in the best position to know when the plan must be modified. Requiring the contractor to develop and maintain the SWPPP—and ensuring that the contractor bears the risk of violating the Permit—sets up the right incentives for the people performing the work to ensure that the SWPPP effectively protects water quality. SB 1170 would remove these incentives and increase the burden on unprepared local agencies, potentially resulting in illegal pollutant discharges, fines to the state and local governments, and water quality problems.

Comments

1. Purpose of Bill. According to the author, this bill “ensures that adequate resources are allocated to the pollution prevention planning process by clarifying that public owners are responsible for the preparation of SWPPPs required on public works projects. This bill prohibits public owners from delegating responsibility to contractors for SWPPP design.”

The author further argues that “the bill clarifies existing law which requires licensed design professionals to create engineering and architectural plans.” The author states that existing law already bars public owners from making contractors assume responsibility for the design of stormwater plans.

The author asserts that this bill “clarifies the intent of the permit designation of project owners as the Legally Responsible Party.”

1. Responsibility and Consequences. The Permit defines the “discharger” as “[t]he Legally Responsible Person or entity subject to the General Permit.” The Permit defines the Legally Responsible Person as falling into specified eligible categories, including “[a] person, company, agency or other entity that possesses a real property interest . . . in the land upon which the construction or land disturbance activities will occur for the regulated site.”

The Permit states a contractor is not qualified to be the Legally Responsible Person, unless they fall into limited categories (those employed and duly authorized on U.S. Army Corp of Engineers Projects or those engaged in pollution and remediation projects).

The Permit is typically held in the name of the property owner. Consequently, the party required to ensure compliance with the Permit is the property owner, not the contractor. The Permit also requires the discharger (i.e., owner) to file Permit registration documents, annual reports and other compliance information. The discharger must certify that the information provided regarding the project site is accurate and complete. The discharger must allow entry to the project site for inspections and provide records required to be kept under the Permit.

Any person who violates a condition of the Permit is subject to a civil penalty, which could be as high as $37,500 per calendar day of a violation, plus sanctions provided by the Clean Water Act.

1. Contracting Agencies’ Perspective. According to staff at SWRCB, the practice of delegating development of an SWPPP to the contractor is neither new nor unusual. This is frequently the practice they see in construction projects that must obtain a Permit and develop an SWPPP. They note that the discharger, or the responsible party for the Permit, is named on the Permit and is always the owner/agency, not the contractor. Thus, responsibility for compliance with the Permit remains with the owner/agency, regardless of which party develops the SWPPP.

SWRCB staff also asserts that most municipalities don’t have the expertise to develop SWPPPs and don't have the resources to retain QSDs on staff. QSDs are typically employed by environmental consulting firms that perform the work of developing SWPPPs under contract, either with a contractor (which is more common), or with the owner/agency. (Some large contracting firms keep QSDs on staff, but many smaller firms don’t have the resources to do so.)

Local contracting agencies indicate that they often require contractors to design and submit SWPPPs because a contractor's plan or approach for construction dictates the sequence of excavation, backfill, and temporary stockpiling of material on a typical project. They contend that a contractor-designed SWPPP can incorporate an optimal construction sequence selected by the contractor and incorporate it into their SWPPP, thereby maximizing efficiency and reducing costs.

An owner-designed SWPPP would necessarily have to assume a sequence of excavation, etc. (and effects upon drainage) that might occur under one construction sequence/scenario. This might not be the optimum sequence that the contractor would elect to use (and would have incorporated into its own SWPPP plan).

For this reason, it makes more sense to require the party actually responsible for the construction sequence of operations to be the one implementing its sequence into the design of an SWPPP. An owner-designed SWPPP would unnecessarily lock in all bidders to one single type of construction sequence/plan envisioned by the owner prior to the bid opening, one which may not necessarily be the lowest cost option.

1. Mandate. The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. According to the Legislative Counsel’s Office, SB 1170 creates a new state-mandated local program. SB 1170 disclaims this mandate by saying that the Legislature finds that there is no mandate in the act. Ultimately, the Commission on State Mandates may make the final determination on whether a mandate exists.

Related/Prior Legislation

The provisions of SB 1170 are similar to those of AB 1315 (Alejo, 2015), except the amendments that were taken to SB 1170 limit the types of projects where the prohibitions apply, and that AB 1315 did not disclaim the state mandate and did not purport to be declaratory of existing law. AB 1315 was held under submission in the Assembly Appropriations Committee.

DOUBLE REFERRAL:

This measure was heard in Senate Governance and Finance Committee on March 30, 2016, and passed out of committee with a vote of 7-0.

SOURCE:

Associated General Contractors

SUPPORT:

American Subcontractors Association, California Chapter

California Legislative Conference of the Plumbing, Heating, and Piping Industry

California Sheet Metal and Air Conditioning Contractors, National Association California Chapters of the National Electrical Contractors Association

California State Council of Laborers

California-Nevada Conference of Operating Engineers

Northern California Allied Trades

Southern California Contractors Association

United Contractors

Wall and Ceiling Alliance

OPPOSITION:

Association of California Healthcare Districts

Association of California School Administrators

Association of California Water Agencies

California Association of Sanitation Agencies

California Association of School Business Officials

California Municipal Utilities Association

California School Boards Association

California Special Districts Association

California State Association of Counties

California State University

Coalition for Adequate School Housing

League of California Cities

Rural County Representatives of California

Three Valleys Municipal Water District

Urban Counties of California

ARGUMENTS IN SUPPORT:

The support believes that SB 1170 “confirms that the public owner is required to be the ‘Legally Responsible Person’ under the Permit and this requirement will not be shifted to the contractor. SWPPP design responsibility/risk will be maintained with public owner that best knows the stormwater and drainage characteristics of the site and surrounding areas. The bidding contractor is far less familiar with the site and likely totally unfamiliar with the surrounding area at the time a contract is entered into.”

ARGUMENTS IN OPPOSITION:

The opposition states that “on projects that encompass at least one acre of land, SWPPPs must be developed to ascertain potential sources of stormwater pollution on construction sites and identify the control measures needed to be taken during the construction process. SWPPPs must be written, amended and certified by qualified personnel who are knowledgeable in the principles and practice of erosion and sediment controls and possess the skills needed to assess conditions at the construction site that could impact stormwater quality.” The opposition argues that “public agencies rely on the expertise of qualified SWPPP developers, known as QSDs, to conduct this work. As agencies do not have the resources nor the regular workload required to employ such personnel throughout the year.”

The opposition points out that “SWPPPs are currently in accordance with the general contractor’s construction plans. As construction progresses, SWPPPs must often be modified to accommodate the constantly changing conditions of a construction site. The general contractor is in the best position to create the construction plan and contract for the corresponding SWPPP. A general contractor-developed SWPPP can incorporate an optimal construction sequence selected by the contractor thereby maximizing efficiency and reducing costs.”

The opposition argues that, “SB 1170 would turn this standing process on its head by prohibiting public agencies from contracting with the general contractor to develop a SWPPP and statutorily restricting the agencies remaining options to an engineer or architect. A separate entity developing a SWPPP would have to assume a sequence of work that might occur under one construction scenario but not another.”

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SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Robert M. Hertzberg, Chair

2015 - 2016 Regular

Public contracts: water pollution prevention plans: delegation

Prohibits public agencies from requiring a contractor to prepare or assume responsibility for certain plans that prevent stormwater runoff from construction sites.

Background

Water Quality Regulation. In California, the federal Clean Water Act and the state Porter-Cologne Water Quality Control Act charge the State Water Resources Control Board (SWRCB) with regulating water pollution. Under these statutes, discharges of pollutants to surface waters are generally prohibited unless the discharger obtains a permit from SWRCB. Many of the modern requirements for regulating water pollution date to 1972, when major amendments to the Clean Water Act created the National Pollutant Discharge Elimination System (NPDES). These requirements focused on eliminating pollutant discharges from “point sources” of pollution such as sewage treatment and wastewater from industrial and manufacturing facilities. After 1972, studies began showing that non-point sources, including stormwater runoff, were a major contributor to surface water pollution. This led to further amendments to the Clean Water Act that created a framework for regulating stormwater. In 1990, the U.S. Environmental Protection Agency published final regulations establishing permit requirements for stormwater discharges associated with industrial activities, including construction activities. In response, the SWRCB adopted a Construction General Permit (Permit) in 1992, which covers construction activities statewide. The Permit is periodically updated and was significantly revised in 2009.

Stormwater Pollution Prevention Plans. Public and private owners of construction projects that disturb one or more acres of land must comply with the Permit, which regulates the discharge of stormwater and non-stormwater (such as improper dumping, spills, or leakage from storage tanks) from certain construction activities and is enforced by SWRCB’s nine Regional Water Quality Control Boards (regional boards). The Permit requires, among other things, the development of a Stormwater Pollution Prevention Plan (SWPPP) that demonstrates compliance with the Permit. A SWPPPs is a comprehensive, detailed, site-specific, written document that:

• Identifies potential sources of stormwater pollution on a construction site;
• Describes stormwater control measures and Best Management Practices (BMPs) that will be used to reduce or eliminate pollutants in stormwater discharges from the project site, and
• Identifies the procedures the operator of the project site will implement to comply with the terms and conditions of the Permit.

A project’s SWPPP may be developed by the project owner or prepared by a contractor’s SWPPP developer. The Permit requires SWPPPs to be prepared and certified by a Qualified SWPPP Developer (QSD), who must be a registered engineer or other licensed professional. Many other SWPPP tasks (such as site inspections) must be conducted directly by, or under the supervision of, a QSD or Qualified SWPPP Practitioner (QSP), who must also be certified. There are extensive qualification and training requirements for both the QSD and QSP.

Typically, the owner of the construction site is designated the “discharger” from the site and is therefore the “Legally Responsible Person” under the Permit. Consequently, the party required to ensure compliance with the terms of the Permit is the property owner, not the contractor. There are serious potential costs for failure to comply with the Permit. Any person who violates a condition of the Permit is subject to a civil penalty, which could be as high as $37,500 per calendar day of a violation, plus sanctions provided by the Clean Water Act.

Public Contracting. The Public Contract Code spells out requirements for public entities when contracting for public works projects. The Local Agency Public Construction Act requires local officials to invite bids for construction projects and then award contracts to the lowest responsible bidder. This design-bid-build method is the traditional, and most widely-used, approach to public works construction. However, over the last two decades, legislators have gradually expanded local governments’ authority to procure construction projects using various alternatives to the design-bid-build project delivery method, including “design-build,” “construction manager at risk,” and “best value” contracting. Chief among the potential benefits of these methods is that they transfer some of the risk associated with the construction from the public entity to the contractor.

State law also controls some aspects of project design and execution. The Professional Engineers Act requires, among other things, engineering and architectural plans to be developed by licensed engineers or architects. Title 12 of the Civil Code (commencing with Section 2772) governs indemnity generally and provides that a contract requiring indemnification of a public agency for that agency’s willful misconduct or sole negligence is void. However, Title 12 also provides that parties to a contract, including a public agency, may negotiate liability among themselves for design defects and any other liability relating to the contract. Finally, the Public Contract Code disallows public entities from requiring bidders to assume responsibility for the completeness and accuracy of the designs for public works projects, except on clearly designated design-build projects.

Many public entities require contractors to include in their bids the cost of preparing and implementing SWPPPs, and have begun requiring contract provisions that indemnify the public entity against penalties associated with violations of the Permit and prohibit change orders associated with SWPPPs. In addition, construction costs in California declined sharply for several years beginning in 2007, creating intense competition for projects among contractors, reducing margins. Some contractors want to restrict the ability of public agencies to require contractors to prepare SWPPPs as part of a public works contract.

Proposed Law

Senate Bill 1170 prohibits a public entity, charter city, or charter county from delegating the development of certain plans associated with public works projects and from requiring a contractor on a public works contract to assume responsibility for the completeness and accuracy of those plans. The bill defines plan to include: a SWPPP, water pollution control program, or any other plan required by the regional boards to prevent or reduce water pollution or runoff on a public works project. However, public entities, charter cities, and charter counties may contract separately with a licensed architect or engineer for design of a plan, and they may require a bidder to review an applicable plan and report errors or omissions. The bill limits those reviews to the contractor’s capacity as a contractor. The bill also states that the prohibitions and exemptions apply regardless of the project delivery method required in a public works contract.

SB 1170 also includes findings and declarations stating that the bill’s provisions are declaratory of existing law, including certain provisions of law that regulate project design, execution, and indemnity.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. Public agencies that design construction projects and put them out to bid have begun to require contractors to develop SWPPPs, often in as little as three weeks, as a part of a bid package for the project. Since public agencies usually must award the contract to the lowest responsible bidder, some contractors lowball the cost and contents of SWPPPs, resulting in ineffective SWPPPs that don’t serve their purpose to stop stormwater discharges. Public agencies have responded by prohibiting change orders and requiring contractors to indemnify the agency. This effectively shifts legal responsibility for the plan onto contractors, even though the Permit specifically says that contractors are not qualified to be the legally responsible person. Public agencies must receive other environmental permits prior to a project going out to bid; current practice around SWPPPs is therefore out of step with other laws. By ensuring that development and compliance with the SWPPP rest with the public agency, SB 1170 furthers the intent of the Permit and existing laws that prohibit holding contractors liable for the responsibilities of public entities.

2. Practice makes perfect. Contractors work on multiple construction projects over time, or even simultaneously. Accordingly, many develop preexisting relationships with QSDs or employ them within their own organization. Some larger public agencies may also retain their own QSDs, but it doesn’t make sense for smaller ones that rarely build new public works to do the same. SB 1170 allows local agencies to contract separately with an engineer or architect for a SWPPP, but this simply puts a public agency in the position of being the general contractor for the project—requiring experience and relationships which smaller agencies may not have. Moreover, SWPPPs are ever-changing documents. Construction projects frequently change in response to unforeseen circumstances or issues with the site, and the SWPPP must be revised to reflect those changes. Contractors who are actually performing work on a site are in the best position to know when the plan must be modified. Requiring the contractor to develop and maintain the SWPPP—and ensuring that the contractor bears the risk of violating the Permit—sets up the right incentives for the people performing the work to ensure that the SWPPP effectively protects water quality. SB 1170 would remove these incentives and increase the burden on unprepared local agencies, potentially resulting in illegal pollutant discharges, fines to the state and local governments, and water quality problems.

4. Other procurement methods. The bill’s prohibitions on delegation of SWPPPs and assigning responsibility for their completeness and accuracy to a contractor apply regardless of the procurement method used in a construction contract. But the Legislature has expanded the authority of local agencies to use design-build and construction manager at risk procurement methods because of their potential to more efficiently deliver projects. The ability to transfer risk from the public agency to the contractor is fundamental to these procurement methods. Thus, this bill may run contrary to the use of these other methods. The Committee may wish to consider amending SB 1170 to explicitly exempt from its provisions projects that use design-build, construction manager at risk, and best value procurement methods.

5. Charter city. The California Constitution allows cities and counties that adopt charters to control their own “municipal affairs.” In all other matters, charter cities and counties must follow the general, statewide laws. Because the Constitution doesn’t define “municipal affairs,” the courts determine whether a topic is a municipal affair or whether it’s an issue of statewide concern. SB 1170 says that it applies to charter cities and counties. To support this assertion, the bill includes a legislative finding and declaration that it is of statewide concern to require a public entity, charter city, or charter county to be responsible for the development of, and completeness and accuracy of, a plan to prevent or reduce water pollution or runoff on a public works project.

6. Mandate. The California Constitution generally requires the state to reimburse local agencies for their costs when the state imposes new programs or additional duties on them. According to the Legislative Counsel’s Office, SB 1170 creates a new state-mandated local program. SB 1170 disclaims this mandate by saying that the Legislature finds that there is no mandate in the act. Ultimately, the Commission on State Mandates may make the final determination on whether a mandate exists.

7. Double-referred. The Senate Rules Committee has ordered a double-referral of SB 1170—first to the Senate Governance & Finance Committee, which has jurisdiction over bills relating to local governments’ authority, and then to the Senate Environmental Quality Committee, which has jurisdiction over bills relating to water quality.

8. Related legislation. The provisions of SB 1170 are virtually identical to those of AB 1315 (Alejo, 2015), except that AB 1315 did not disclaim the state mandate and did not purport to be declaratory of existing law. AB 1315 was held under submission in the Assembly Appropriations Committee.

Support and Opposition

(3/24/2016)

Support: Association of General Contractors (sponsor); American Subcontractors Association, California Chapter; California Association of Sheet Metal and Air Conditioning Contractors, National Association; California Chapters of the National Electrical Contractors Association; California Legislative Conference of the Plumbing, Heating, and Piping Industry; California-Nevada Conference of Operating Engineers; California Precast Concrete Association; California Professional Association of Specialty Contractors; California State Council of Laborers; Northern California Allied Trades; Southern California Contractors Association; Union Roofing Contractors Association; United Contractors; Wall and Ceiling Alliance.

Opposition: Association of California Healthcare Districts; Association of California School Administrators; Association of California Water Agencies; California Association of Sanitation Agencies; California Association of School Business Officials; California Special Districts Association; Coalition for Adequate School Housing; California Municipal Utilities Association; California State Association of Counties; California School Boards Association; California State University; League of California Cities; Rural County Representatives of California; Three Valleys Municipal Water District; Urban Counties of California.

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