AB 92: Public contracts: payment.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-07-10
Existing law until January 1, 2018, authorizes the retention proceeds withheld from any payment by an awarding entity, as described, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor to exceed 5% on specific projects where the director of the applicable department, as specified, has made, or the governing body of the public entity or designated official of the public entity has approved, a finding prior to the bid that the project is substantially complex and requires a higher retention and the department or public entity includes both this finding and the actual retention amount in the bid documents.
This bill would extend the operation of these provisions to January 1, 2023.
Existing law until January 1, 2018, authorizes the retention proceeds withheld from any payment by an awarding entity, as described, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor to exceed 5% on specific projects where the director of the applicable department, as specified, has made, or the governing body of the public entity or designated official of the public entity has approved, a finding prior to the bid that the project is substantially complex and requires a higher retention and the department or public entity includes both this finding and the actual retention amount in the bid documents.
This bill would extend the operation of these provisions to January 1, 2023.
Existing law until January 1, 2018, authorizes the retention proceeds withheld from any payment by an awarding entity, as described, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor to exceed 5% on specific projects where the director of the applicable department, as specified, has made, or the governing body of the public entity or designated official of the public entity has approved, a finding prior to the bid that the project is substantially complex and requires a higher retention and the department or public entity includes both this finding and the actual retention amount in the bid documents.
This bill would extend the operation of these provisions to January 1, 2023.
(a)(1)This section shall apply with respect to all contracts entered into on or after January 1, 2012, between a public entity and an original contractor, between an original contractor and a subcontractor, and between all subcontractors thereunder, relating to the construction of any public work of improvement.
(2)Under no circumstances shall any provision of this section be construed to limit the ability of any public entity to withhold 150 percent of the value of any disputed amount of work from the final payment, as provided for in subdivision (c) of Section 7107. In the event of a good faith dispute, nothing in this section shall be construed to require a public entity to pay for work that is not approved or accepted in accordance with the proper plans or specifications.
(3)For purposes of this section, public entity means the state, including every state agency, office, department, division, bureau, board, or commission, the California State University, the University of California, a city, county, city and county, including charter cities and charter counties, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency.
(b)(1)The retention proceeds withheld from any payment by a public entity from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder shall not exceed 5 percent of the payment. In no event shall the total retention proceeds withheld exceed 5 percent of the contract price. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the public entity and the original contractor.
(2)This subdivision shall not apply if the contractor provides written notice to the subcontractor, pursuant to subdivision (c) of Section 4108, prior to, or at, the time that the bid is requested, that bonds shall be required, and the subcontractor subsequently is unable or refuses to furnish to the contractor a performance and payment bond issued by an admitted surety insurer.
(3)Notwithstanding any other provision of this subdivision, the retention proceeds withheld from any payment by an awarding entity set forth in paragraphs (1) to (5), inclusive, of subdivision (a) of Section 10106, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the director of the department has made a finding prior to the bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent and the department includes in the bid documents details explaining the basis for the finding and the actual retention amount. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the department and the original contractor.
(4)Notwithstanding any other provision of this subdivision, the retention proceeds withheld from any payment by the awarding entity of a city, county, city and county, including charter cities and charter counties, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the governing body of the public entity or designee, including, but not limited to, a general manager or other director of an appropriate department, has approved a finding, on a project by project basis, during a properly noticed and normally scheduled public hearing and prior to bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent and the awarding entity includes in the bid documents details explaining the basis for the finding and the actual retention amount. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the department and the original contractor.
(5)Any finding by a public entity that a project is substantially complex shall include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.
(c)A party identified in subdivision (a) shall not require any other party to waive any provision of this section.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 2.Section 10261 of the Public Contract Code, as amended by Section 2 of Chapter 670 of the Statutes of 2014, is amended to read:10261.(a)Payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 100 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not more than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the department has, in place at the time of the request, the mechanism for the transfer.
(b)(1)Notwithstanding subdivision (a), when the director of the department has made a finding prior to the bid that a specified project is substantially complex and therefore requires a higher retention amount than 5 percent, and the department includes in the bid documents details explaining the basis for the finding and the actual retention amount, then payments upon contracts by the department shall be made as the department prescribes upon estimates made and approved by the department. However, progress payments shall not be made in excess of 95 percent of the percentage of actual work completed, plus a like percentage of the value of material delivered on the ground or stored, subject to, or under the control of the state, and unused, except as otherwise provided in this section. At any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them with funds appropriated therefor. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the department has, in place at the time of the request, the mechanism for the transfer.
(2)Any finding by the director of a department that a project is substantially complex shall include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 3.Section 10261 of the Public Contract Code, as amended by Section 3 of Chapter 670 of the Statutes of 2014, is amended to read:10261.(a)On and after January 1, 2023, payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 95 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not less than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the public entity has, in place at the time of the request, the mechanism for the transfer.
(b)This section shall become operative on January 1, 2023.
(a)(1)This section shall apply with respect to all contracts entered into on or after January 1, 2012, between a public entity and an original contractor, between an original contractor and a subcontractor, and between all subcontractors thereunder, relating to the construction of any public work of improvement.
(2)Under no circumstances shall any provision of this section be construed to limit the ability of any public entity to withhold 150 percent of the value of any disputed amount of work from the final payment, as provided for in subdivision (c) of Section 7107. In the event of a good faith dispute, nothing in this section shall be construed to require a public entity to pay for work that is not approved or accepted in accordance with the proper plans or specifications.
(3)For purposes of this section, public entity means the state, including every state agency, office, department, division, bureau, board, or commission, the California State University, the University of California, a city, county, city and county, including charter cities and charter counties, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency.
(b)(1)The retention proceeds withheld from any payment by a public entity from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder shall not exceed 5 percent of the payment. In no event shall the total retention proceeds withheld exceed 5 percent of the contract price. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the public entity and the original contractor.
(2)This subdivision shall not apply if the contractor provides written notice to the subcontractor, pursuant to subdivision (c) of Section 4108, prior to, or at, the time that the bid is requested, that bonds shall be required, and the subcontractor subsequently is unable or refuses to furnish to the contractor a performance and payment bond issued by an admitted surety insurer.
(3)Notwithstanding any other provision of this subdivision, the retention proceeds withheld from any payment by an awarding entity set forth in paragraphs (1) to (5), inclusive, of subdivision (a) of Section 10106, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the director of the department has made a finding prior to the bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent and the department includes in the bid documents details explaining the basis for the finding and the actual retention amount. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the department and the original contractor.
(4)Notwithstanding any other provision of this subdivision, the retention proceeds withheld from any payment by the awarding entity of a city, county, city and county, including charter cities and charter counties, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the governing body of the public entity or designee, including, but not limited to, a general manager or other director of an appropriate department, has approved a finding, on a project by project basis, during a properly noticed and normally scheduled public hearing and prior to bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent and the awarding entity includes in the bid documents details explaining the basis for the finding and the actual retention amount. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the department and the original contractor.
(5)Any finding by a public entity that a project is substantially complex shall include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.
(c)A party identified in subdivision (a) shall not require any other party to waive any provision of this section.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 2.Section 10261 of the Public Contract Code, as amended by Section 2 of Chapter 670 of the Statutes of 2014, is amended to read:10261.(a)Payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 100 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not more than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the department has, in place at the time of the request, the mechanism for the transfer.
(b)(1)Notwithstanding subdivision (a), when the director of the department has made a finding prior to the bid that a specified project is substantially complex and therefore requires a higher retention amount than 5 percent, and the department includes in the bid documents details explaining the basis for the finding and the actual retention amount, then payments upon contracts by the department shall be made as the department prescribes upon estimates made and approved by the department. However, progress payments shall not be made in excess of 95 percent of the percentage of actual work completed, plus a like percentage of the value of material delivered on the ground or stored, subject to, or under the control of the state, and unused, except as otherwise provided in this section. At any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them with funds appropriated therefor. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the department has, in place at the time of the request, the mechanism for the transfer.
(2)Any finding by the director of a department that a project is substantially complex shall include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 3.Section 10261 of the Public Contract Code, as amended by Section 3 of Chapter 670 of the Statutes of 2014, is amended to read:10261.(a)On and after January 1, 2023, payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 95 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not less than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the public entity has, in place at the time of the request, the mechanism for the transfer.
(b)This section shall become operative on January 1, 2023.
(a)(1)This section shall apply with respect to all contracts entered into on or after January 1, 2012, between a public entity and an original contractor, between an original contractor and a subcontractor, and between all subcontractors thereunder, relating to the construction of any public work of improvement.
(2)Under no circumstances shall any provision of this section be construed to limit the ability of any public entity to withhold 150 percent of the value of any disputed amount of work from the final payment, as provided for in subdivision (c) of Section 7107. In the event of a good faith dispute, nothing in this section shall be construed to require a public entity to pay for work that is not approved or accepted in accordance with the proper plans or specifications.
(3)For purposes of this section, public entity means the state, including every state agency, office, department, division, bureau, board, or commission, the California State University, the University of California, a city, county, city and county, including charter cities and charter counties, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency.
(b)(1)The retention proceeds withheld from any payment by a public entity from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder shall not exceed 5 percent of the payment. In no event shall the total retention proceeds withheld exceed 5 percent of the contract price. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the public entity and the original contractor.
(2)This subdivision shall not apply if the contractor provides written notice to the subcontractor, pursuant to subdivision (c) of Section 4108, prior to, or at, the time that the bid is requested, that bonds shall be required, and the subcontractor subsequently is unable or refuses to furnish to the contractor a performance and payment bond issued by an admitted surety insurer.
(3)Notwithstanding any other provision of this subdivision, the retention proceeds withheld from any payment by an awarding entity set forth in paragraphs (1) to (5), inclusive, of subdivision (a) of Section 10106, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the director of the department has made a finding prior to the bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent and the department includes in the bid documents details explaining the basis for the finding and the actual retention amount. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the department and the original contractor.
(4)Notwithstanding any other provision of this subdivision, the retention proceeds withheld from any payment by the awarding entity of a city, county, city and county, including charter cities and charter counties, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency, from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, may exceed 5 percent on specific projects where the governing body of the public entity or designee, including, but not limited to, a general manager or other director of an appropriate department, has approved a finding, on a project by project basis, during a properly noticed and normally scheduled public hearing and prior to bid that the project is substantially complex and therefore requires a higher retention amount than 5 percent and the awarding entity includes in the bid documents details explaining the basis for the finding and the actual retention amount. In a contract between the original contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld shall not exceed the percentage specified in the contract between the department and the original contractor.
(5)Any finding by a public entity that a project is substantially complex shall include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.
(c)A party identified in subdivision (a) shall not require any other party to waive any provision of this section.
(d)This section shall remain in effect only until January 1, 2018 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018 2023, deletes or extends that date.
SEC. 2.Section 10261 of the Public Contract Code, as amended by Section 2 of Chapter 670 of the Statutes of 2014, is amended to read:10261.(a)Payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 100 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not more than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the department has, in place at the time of the request, the mechanism for the transfer.
(b)(1)Notwithstanding subdivision (a), when the director of the department has made a finding prior to the bid that a specified project is substantially complex and therefore requires a higher retention amount than 5 percent, and the department includes in the bid documents details explaining the basis for the finding and the actual retention amount, then payments upon contracts by the department shall be made as the department prescribes upon estimates made and approved by the department. However, progress payments shall not be made in excess of 95 percent of the percentage of actual work completed, plus a like percentage of the value of material delivered on the ground or stored, subject to, or under the control of the state, and unused, except as otherwise provided in this section. At any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them with funds appropriated therefor. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the department has, in place at the time of the request, the mechanism for the transfer.
(2)Any finding by the director of a department that a project is substantially complex shall include a description of the specific project and why it is a unique project that is not regularly, customarily, or routinely performed by the agency or licensed contractors.
(c)This section shall remain in effect only until January 1, 2018 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018 2023, deletes or extends that date.
SEC. 3.Section 10261 of the Public Contract Code, as amended by Section 3 of Chapter 670 of the Statutes of 2014, is amended to read:10261.(a)On and after January 1, 2018 2023, payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 95 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not less than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. The Controller shall draw his or her warrants upon estimates so made and approved by the department and the Treasurer shall pay them. The funds may be released by electronic transfer if that procedure is requested by the contractor, in writing, and if the public entity has, in place at the time of the request, the mechanism for the transfer.
(b)This section shall become operative on January 1, 2018 2023.
|
Date
|
Status
|
|---|---|
| Jul 10, 2017 | Chaptered by Secretary of State - Chapter 37, Statutes of 2017. |
| Jul 10, 2017 | Approved by the Governor. |
| Jun 26, 2017 | Enrolled and presented to the Governor at 2:30 p.m. |
| Jun 20, 2017 | In Assembly. Ordered to Engrossing and Enrolling. |
| Jun 19, 2017 | Read third time. Passed. Ordered to the Assembly. (Ayes 33. Noes 0. Page 1611.). |
| Jun 14, 2017 | Read second time. Ordered to Consent Calendar. |
| Jun 13, 2017 | From committee: Do pass. To Consent Calendar. (Ayes 12. Noes 0.) (June 13). |
| May 18, 2017 | Referred to Com. on G.O. |
| May 4, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 4, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 1388.) |
| Apr 27, 2017 | Read second time. Ordered to Consent Calendar. |
| Apr 26, 2017 | From committee: Do pass. To Consent Calendar. (Ayes 16. Noes 0.) (April 26). |
| Apr 3, 2017 | Re-referred to Com. on APPR. pursuant to Assembly Rule 97. |
| Mar 23, 2017 | Read second time. Ordered to third reading. |
| Mar 22, 2017 | From committee: Do pass. (Ayes 7. Noes 0.) (March 22). |
| Jan 19, 2017 | Referred to Com. on A. & A.R. |
| Jan 10, 2017 | From printer. May be heard in committee February 9. |
| Jan 9, 2017 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jun 19, 2017 | Consent Calendar 2nd AB92 | Senate Floor |
Passed |
|
| Jun 13, 2017 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Governmental Organization |
Passed |
|
| May 4, 2017 | AB 92 BONTA Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Apr 26, 2017 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Mar 22, 2017 | Do pass. | Assembly Standing Committee on Accountability and Administrative Review |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Air Conditioning & Refrigeration Contractors Association | ** Support | Jun 14, 2017 |
| Air Conditioning Sheet Metal Association | ** Support | Jun 14, 2017 |
| Building Industry Credit Association | ** Support | Jun 14, 2017 |
| California Precast Concrete Association | ** Support | Jun 14, 2017 |
| California State Association Of Electrical Workers | ** Support | Jun 14, 2017 |
| California State Council Of Laborers | ** Support | Jun 14, 2017 |
| California State Labor Management Cooperation Committee For The International Brotherhood Of Electrical Workers And The National Electrical Contractors Association | * Support | Mar 22, 2017 |
| California State Pipe Trades Council | ** Support | Jun 14, 2017 |
| Finishing Contractors Association Of Southern California | ** Support | Jun 14, 2017 |
| National Electrical Contractors Association | ** Support | Jun 14, 2017 |
| Northern California Allied Trades | ** Support | Jun 14, 2017 |
| Southern California Contractors Association | ** Support | Jun 14, 2017 |
| State Building and Construction Trades Council, AFL-CIO | ** Support | Jun 14, 2017 |
| United Contractors | ** Support | Jun 14, 2017 |
| Wall and Ceiling Alliance | ** Support | Jun 14, 2017 |
| Western States Council Of Sheet Metal Workers | ** Support | Jun 14, 2017 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
CONSENT
Bill No: AB 92
:
SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 6/13/17
AYES: Dodd, Bradford, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, Mendoza, Portantino, Vidak
NO VOTE RECORDED: Berryhill
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
SOURCE: California Association of Sheet Metal and Air Conditioning Contractors National Association
National Electrical Contractors Association
United Contractors
DIGEST: This bill extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor or subcontractor prior to completion of a public works project.
ANALYSIS:
Existing law:
- Prohibits a public agency from retaining more than 5% of a contract price until final completion of a project.
- Provides an exception from the above prohibition by allowing a public agency to withhold more than 5% of the contract price if a project is deemed to be substantially complex, provided that the bid documents describe the specific project, explain why it is substantially complex, and identify the actual retention amount.
- Sunsets these provisions on January 1, 2018.
This bill extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor prior to completion of a public works project.
Background
History. In California and many other states, a public agency is entitled to withhold a percentage of a contract which allows the public agency to maintain some control over the project and ensure that the contractor performs the work, on time, and within a budget. Prior to 2011, state law allowed a public agency to retain no less than 5% from the contractor until the project was completed; the usual standard for public entities was 10%, although this was not set by statute.
In 2011, SB 293 (Padilla, Chapter 700, Statutes of 2011) was enacted which capped the percentage that could be withheld to 5%.
The only identified exception to the 5% retention limit is when a public entity deems that a project is substantially complex during a properly noticed and regularly scheduled public meeting prior to bidding the project. In that case, retention proceeds may exceed 5%.
Determining whether a project is substantially complex for purposes of requiring retention in excess of 5% must be analyzed and approved on a project-by-project basis. The finding and the designated retention amount must be included in the project’s bid documents. Existing law establishing the general 5% retention limit but allowing higher retention for substantially complex projects is due to sunset on January 1, 2018. This bill extends the sunset on these provisions for five years to January 1, 2023.
It should be noted that the 5% limit on retention proceeds does not limit a public entity’s ability to withhold funds for other purposes, including withholding 150% of the value for disputed work.
Comments
Purpose of the bill. According to the author’s office, “if the current 5% cap is not extended, public works contractors and subcontractors could be forced to complete work without full payment, forcing them to seek additional financing. This could drive up project costs and, in many cases, make it difficult for them to meet their financial obligations in a timely manner. This bill will extend a fair policy that reduces the cost of public works construction and ensures that the state’s small and emerging constructing businesses can continue to compete for these contracts.”
Related/Prior Legislation
AB 1705 (Williams, Chapter 670, Statutes of 2014) limited the circumstances under which public agencies may withhold more than 5% of total payment amounts for time and materials on substantially complex public works projects and extended the repeal date of the provisions governing retention proceeds from January 1, 2016, to January 1, 2018.
SB 293 (Padilla, Chapter 700, Statutes of 2011) capped the amount of money that public agencies can withhold from a contractor prior to completion of a public works project at 5% of the total contract, with specified exceptions, with a sunset of January 1, 2016.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
California Association of Sheet Metal and Air Conditioning Contractors National Association (co-source)
National Electrical Contractors Association (co-source)
United Contractors (co-source)
Air Conditioning Sheet Metal Association
Air Conditioning & Refrigeration Contractors Association
Building Industry Credit Association
California Legislative Conference of the Plumbing, Heating and Piping Industry
California Precast Concrete Association
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
Finishing Contractors Association of Southern California
Northern California Allied Trades
Southern California Contractors Association
State Building and Construction Trades Council, AFL-CIO
Wall and Ceiling Alliance
Western States Council of Sheet Metal Workers
OPPOSITION: (Verified 6/13/17)
None received
ARGUMENTS IN SUPPORT: Supporters argue that, “the 5% retention cap is a significant policy for the construction industry and has an extremely positive impact on small and emerging construction businesses. AB 92 will extend a fair policy that reduces the cost of public works construction and provides capital for job creation at a time in which California is actively investing in its infrastructure, at both the local and state levels.”
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
6/14/17 16:16:34
**** END ****
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Bill Dodd
Chair
2017 - 2018 Regular
Bill No: 92 Hearing Date: 6/13/2017
Author: | |||
Version: | 1/9/2017 Introduced | ||
Urgency: | No | Fiscal: | No |
Consultant: | Felipe Lopez | ||
SUBJECT: Public contracts: payment
DIGEST: This bill extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor or subcontractor prior to completion of a public works project.
ANALYSIS:
Existing law:
- Prohibits a public agency from retaining more than 5% of a contract price until final completion of a project.
- Provides an exception from the above prohibition by allowing a public agency to withhold more than 5% of the contract price if a project is deemed to be substantially complex, provided that the bid documents describe the specific project, explain why it is substantially complex, and identify the actual retention amount.
- Sunsets these provisions on January 1, 2018.
This bill extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor prior to completion of a public works projects.
Background
Purpose of the bill. According to the author’s office, “if the current 5% cap is not extended, public works contractors and subcontractors could be forced to complete work without full payment, forcing them to seek additional financing. This could drive up project costs and, in many cases, make it difficult for them to meet their financial obligations in a timely manner. This bill will extend a fair policy that reduces the cost of public works construction and ensures that the state’s small and emerging constructing businesses can continue to compete for these contracts.”
History. In California and many other states, a public agency is entitled to withhold a percentage of a contract which allows the public agency to maintain some control over the project and ensure that the contractor performs the work, on time, and within a budget. Prior to 2011, state law allowed a public agency to retain no less than 5% from the contractor until the project was completed; the usual standard for public entities was 10%, although this was not set by statute.
In 2011, SB 293 (Padilla, Chapter 700, Statutes of 2011) was enacted which capped the percentage that could be withheld to 5%.
The only identified exception to the 5% retention limit is when a public entity deems that a project is substantially complex during a properly noticed and regularly scheduled public meeting prior to bidding the project. In that case, retention proceeds may exceed 5%.
Determining whether a project is substantially complex for purposes of requiring retention in excess of 5% must be analyzed and approved on a project-by-project basis. The finding and the designated retention amount must be included in the project’s bid documents. Existing law establishing the general 5% retention limit but allowing higher retention for substantially complex projects is due to sunset on January 1, 2018. This bill extends the sunset on these provisions for five years to January 1, 2023.
It should be noted that the 5% limit on retention proceeds does not limit a public entity’s ability to withhold funds for other purposes, including withholding 150% of the value for disputed work.
Prior/Related Legislation
AB 1705 (Williams, Chapter 670, Statutes of 2014) limited the circumstances under which public agencies may withhold more than 5% of total payment amounts for time and materials on substantially complex public works project and extended the repeal date of the provisions governing retention proceeds from January 1, 2016, to January 1, 2018.
SB 293 (Padilla, Chapter 700, Statutes of 2011) capped the amount of money that public agencies can withhold from a contractor prior to completion of a public works project at 5% of the total contract, with specified exceptions, with a sunset of January 1, 2016.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
SUPPORT:
California Association of Sheet Metal and Air Conditioning Contractors National Association (Co-source)
National Electrical Contractors Association (Co-source)
United Contractors (Co-source)
Air Conditioning Sheet Metal Association
Air Conditioning & Refrigeration Contractors Association
Building Industry Credit Association
California Legislative Conference of the Plumbing, Heating and Piping Industry
California Precast Concrete Association
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
Finishing Contractors Association of Southern California
Northern California Allied Trades
Southern California Contractors Association
State Building and Construction Trades Council, AFL-CIO
Wall and Ceiling Alliance
Western States Council of Sheet Metal Workers
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: Supporters argue that, “the 5% retention cap is a significant policy for the construction industry and has an extremely positive impact on small and emerging construction businesses. AB 92 will extend a fair policy that reduces the cost of public works construction and provides capital for job creation at a time in which California is actively investing in its infrastructure, at both the local and state levels.”
Date of Hearing: April 26, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
ABPCA Bill Id:AB 92
Author:(Bonta) – As Introduced Ver:January 9, 2017
Policy Committee: | Accountability and Administrative Review | Vote: | 7 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor prior to completion of a public works project.
FISCAL EFFECT:
- Minor, if any, fiscal impact to the state. The Department of General Services, the California State University, and Caltrans have indicated they have no cost concerns with the extension. The University of California has a longstanding 5% retention practice. Caltrans currently has a "zero percent" retention policy on all projects, including federal projects, as required by federal law.
- Minor fiscal impact on local governments. Existing law requires cities and counties using design-build and other alternative construction delivery methods to hold no more than 5% retention on contractors.
COMMENTS:
- Purpose. According to the author, "If the current 5% cap is not extended, public works contractors and subcontractors could be forced to complete work without full payment, forcing them to seek additional financing. This could drive up project costs and, in many cases, make it difficult for them to meet their financial obligations in a timely manner." The sponsors, representing contractors, maintain that this bill will extend a fair policy that reduces the cost of public works construction and ensures that the state's small and emerging construction businesses can continue to compete for these contracts.
- Background. Withholding a percentage of a contract allows a public agency to maintain a degree of control over a project to ensure that the contractor performs the work well, on time, and on budget. Current law limits the amount of money that public agencies can withhold prior to completion of a job to no more than 5% of the total contract. However, public agencies may retain a higher percentage if the agency, after a proper hearing, finds a project to be "substantially complex," as long as the bid documents include a description of the specific project and an explanation of why it is unique.
Existing law establishing the general 5% retention limit, but allowing higher retention for substantially complex projects is due to sunset on January 1, 2018. This bill extends the sunset on these provisions for five years to January 1, 2023.
- Prior Legislation.
AB 1705 (Williams), Chapter 670, Statutes of 2014, clarified the circumstances under which a public works project is deemed substantially complex for purposes of higher retention withholding and extended the sunset date on public agencies' retention requirements from January 1, 2016, to January 1, 2018.
SB 293 (Padilla), Chapter 700, Statutes of 2011, caped the maximum amount of money that public agencies can withhold from a contractor prior to completion of a public works project at 5% of the total contract, with specified exceptions for substantially complex projects; and contained a sunset date on public agencies' retention requirements of January 1, 2016.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
ASSEMBLY THIRD READING
ATR Bill Id:AB 92
Author:(Bonta)
As Introduced Ver:January 9, 2017
Majority vote
Committee | Votes | Ayes | Noes |
Accountability | 7-0 | Eggman, Lackey, Burke, Flora, Frazier, Medina, Quirk-Silva |
SUMMARY: Extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor prior to completion of a public works project.
EXISTING LAW:
- Generally prohibits a public agency from retaining more than 5% of a contract price until final completion of a project.
- Provides an exemption to the above prohibition by allowing a public agency to withhold more than 5% of the contract price if a project is deemed to be substantially complex, provided that the bid documents describe the specific project, explain why it is substantially complex, and identify the actual retention amount.
- Prohibits retention proceeds from exceeding the retention percentage specified in the contract.
- Sunsets these retention provisions on January 1, 2018.
FISCAL EFFECT: None
COMMENTS: Withholding a percentage of a contract allows a public agency to maintain a degree of control over a project to ensure that the contractor performs the work well, on time, and on budget. Current law limits the amount of money that public agencies can withhold prior to completion of a job to no more than 5% of the total contract. However, public agencies may retain a higher percentage if the agency, after a proper hearing, finds a project to be "substantially complex," as long as the bid documents include a description of the specific project and an explanation of why it is unique.
Existing law establishing the general 5% retention limit but allowing higher retention for substantially complex projects is due to sunset on January 1, 2018. This bill extends the sunset on these provisions for five years to January 1, 2023.
According to the author, "If the current 5% cap is not extended, public works contractors and subcontractors could be forced to complete work without full payment, forcing them to seek additional financing. This could drive up project costs and, in many cases, make it difficult for them to meet their financial obligations in a timely manner." The sponsors, representing contractors, maintain that this bill will extend a fair policy that reduces the cost of public works construction and ensures that the state's small and emerging construction businesses can continue to compete for these contracts.
Analysis Prepared by: Cassie Royce / A. & A.R. / (916) 319-3600 FN: 0000053
Date of Hearing: March 22, 2017
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Susan Talamantes Eggman, Chair
ABPCA Bill Id:AB 92 (
Author:Bonta) – As Introduced Ver:January 9, 2017
SUBJECT: Public contracts: payment
SUMMARY: Extends from January 1, 2018, to January 1, 2023, the sunset date on existing statutes governing the amount of money a public agency can retain from a contractor prior to completion of a public works project.
EXISTING LAW:
- Generally prohibits a public agency from retaining more than 5% of a contract price until final completion of a project.
- Provides an exemption to the above prohibition by allowing a public agency to withhold more than 5% of the contract price if a project is deemed to be substantially complex, provided that the bid documents describe the specific project, explain why it is substantially complex, and identify the actual retention amount.
- Prohibits retention proceeds from exceeding the retention percentage specified in the contract.
- Sunsets these retention provisions on January 1, 2018.
FISCAL EFFECT: None
COMMENTS: Withholding a percentage of a contract allows a public agency to maintain a degree of control over a project to ensure that the contractor performs the work well, on time, and on budget. Current law limits the amount of money that public agencies can withhold prior to completion of a job to no more than 5% of the total contract. However, public agencies may retain a higher percentage if the agency, after a proper hearing, finds a project to be "substantially complex," as long as the bid documents include a description of the specific project and an explanation of why it is unique.
Existing law establishing the general 5% retention limit but allowing higher retention for substantially complex projects is due to sunset on January 1, 2018. This bill extends the sunset on these provisions for five years to January 1, 2023.
According to the author, "If the current 5% cap is not extended, public works contractors and subcontractors could be forced to complete work without full payment, forcing them to seek additional financing. This could drive up project costs and, in many cases, make it difficult for them to meet their financial obligations in a timely manner." The sponsors, representing contractors, maintain that this bill will extend a fair policy that reduces the cost of public works construction and ensures that the state's small and emerging construction businesses can continue to compete for these contracts.
PRIOR LEGISLATION:
- AB 1705 (Williams), Chapter 670, Statutes of 2014, clarifies the circumstances under which a public works project is deemed substantially complex for purposes of higher retention withholding and extends existing law relating to public agencies' retention requirements to January 1, 2018.
- SB 293 (Padilla), Chapter 700, Statutes of 2011, caps the maximum amount of money that public agencies can withhold from a contractor prior to completion of a public works project at 5% of the total contract, with specified exceptions for substantially complex projects; and sunsets public agencies' retention requirements on January 1, 2016.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Sheet Metal and Air Conditioning Contractors National Association (sponsor)
National Electrical Contractors Association (sponsor)
United Contractors (sponsor)
Air Conditioning & Refrigeration Contractors Association
Air Conditioning Sheet Metal Association
California Legislative Conference of the Plumbing, Heating and Piping Industry
California Precast Concrete Association
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
Finishing Contractors Association of Southern California
Northern California Allied Trades
State Building and Construction Trades Council, AFL-CIO
Wall and Ceiling Alliance
Western States Council of Sheet Metal Workers
Opposition
None on file.
Analysis Prepared by: Cassie Royce / A. & A.R. /
Discussed in Hearing
4MIN
Assembly Standing Committee on Accountability and Administrative Review
Bill Author
Bill Co-Author(s):