AB 1727: Public works: fees: small business.
- Session Year: 2021-2022
- House: Assembly
- Latest Version Date: 2022-03-21
Existing law defines public works, for the purposes of regulating public works contracts, as, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages be paid to workers employed on public works and imposes misdemeanor penalties for a willful violation of this requirement. Existing law generally requires a contractor or subcontractor to be registered with the Department of Industrial Relations to be qualified to bid on, be listed in a bid proposal, or engage in the performance of any public work contract. Existing law requires a contractor or subcontractor to meet specific conditions to qualify for this registration, including, among other things, to pay a $400 application fee to qualify for registration and to pay an annual renewal fee.
This bill would change the amount of the application fee for a small business, as defined, to a lower amount to be specified. The bill would also require the application fee for a small business, as defined, to be prorated based on the number of months the registration is valid for. The bill would also require the reduce the application and annual renewal fee for a small business, as defined, to be a lower amount to be specified. $200. The bill would prohibit the application and renewal fee for a contractor or subcontractor that does not qualify as a small business from being increased to support the above-described fee decrease.
Existing law defines public works, for the purposes of regulating public works contracts, as, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages be paid to workers employed on public works and imposes misdemeanor penalties for a willful violation of this requirement. Existing law generally requires a contractor or subcontractor to be registered with the Department of Industrial Relations to be qualified to bid on, be listed in a bid proposal, or engage in the performance of any public work contract. Existing law requires a contractor or subcontractor to meet specific conditions to qualify for this registration, including, among other things, to pay a $400 application fee to qualify for registration and to pay an annual renewal fee.
This bill would change the amount of the application fee for a small business, as defined, to a lower amount to be specified. The bill would also require the application fee for a small business, as defined, to be prorated based on the number of months the registration is valid for. The bill would also require the renewal fee for a small business, as defined, to be a lower amount to be specified. The bill would prohibit the application and renewal fee for a contractor or subcontractor that does not qualify as a small business from being increased to support the above-described fee decrease.
A contractor shall be registered pursuant to this section to be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any public work contract that is subject to the requirements of this chapter. For the purposes of this section, contractor includes a subcontractor as defined by Section 1722.1.
(a)To qualify for registration under this section, a contractor shall do all of the following:
(1)(A)(i)Register with the Department of Industrial Relations in the manner prescribed by the department and pay an initial nonrefundable application fee of four hundred dollars ($400) to qualify for registration under this section and an annual renewal fee on or before July 1 of each year thereafter, except as provided in clause (ii). The annual renewal fee shall be in a uniform amount set by the Director of Industrial Relations, and the initial registration and renewal fees may be adjusted no more than annually by the director to support the costs specified in Section 1771.3.
(ii)It is the intent of the Legislature that the application fee and renewal fee for a small business, as defined in Section 14837 of the Government Code, be less than the fees pursuant to clause (i). The application fee for a small business, as defined in subparagraph (B) of paragraph (1) of subdivision (d) of Section 14837 of the Government Code, shall be ____ dollars ($____). The application fee for a small business, as defined in Section 14837 of the Government Code, shall be prorated based on the number of months the registration is valid for. two hundred dollars ($200). The annual renewal fee for a small business, as defined in subparagraph (B) of paragraph (1) of subdivision (d) of Section 14837 of the Government Code, shall be ____ dollars ($____). two hundred dollars ($200).
(iii)The application fee and renewal fee for a contractor or subcontractor pursuant to clause (i) shall not be increased in order to support the decrease of the fees required by clause (ii).
(B)Beginning June 1, 2019, a contractor may register or renew according to this subdivision in annual increments up to three years from the date of registration. Contractors who wish to do so will be required to prepay the applicable nonrefundable application or renewal fees to qualify for the number of years for which they wish to preregister.
(2)Provide evidence, disclosures, or releases as are necessary to establish all of the following:
(A)Workers compensation coverage that meets the requirements of Division 4 (commencing with Section 3200) and includes sufficient coverage for any worker whom the contractor employs to perform work that is subject to prevailing wage requirements other than a contractor who is separately registered under this section. Coverage may be evidenced by a current and valid certificate of workers compensation insurance or certification of self-insurance required under Section 7125 of the Business and Professions Code.
(B)If applicable, the contractor is licensed in accordance with Chapter 9 (commencing with Section 7000) of the Business and Professions Code.
(C)The contractor does not have any delinquent liability to an employee or the state for any assessment of back wages or related damages, interest, fines, or penalties pursuant to any final judgment, order, or determination by a court or any federal, state, or local administrative agency, including a confirmed arbitration award. However, for purposes of this paragraph, the contractor shall not be disqualified for any judgment, order, or determination that is under appeal, provided that the contractor has secured the payment of any amount eventually found due through a bond or other appropriate means.
(D)The contractor is not currently debarred under Section 1777.1 or under any other federal or state law providing for the debarment of contractors from public works.
(E)The contractor has not bid on a public works contract, been listed in a bid proposal, or engaged in the performance of a contract for public works without being lawfully registered in accordance with this section, within the preceding 12 months or since the effective date of the requirements set forth in subdivision (e), whichever is earlier. If a contractor is found to be in violation of the requirements of this paragraph, the period of disqualification shall be waived if both of the following are true:
(i)The contractor has not previously been found to be in violation of the requirements of this paragraph within the preceding 12 months.
(ii)The contractor pays an additional nonrefundable penalty registration fee of two thousand dollars ($2,000).
(b)Fees received pursuant to this section shall be deposited in the State Public Works Enforcement Fund established by Section 1771.3 and shall be used only for the purposes specified in that section.
(c)A contractor who fails to pay the renewal fee required under paragraph (1) of subdivision (a) on or before the expiration of any prior period of registration shall be prohibited from bidding on or engaging in the performance of any contract for public work until once again registered pursuant to this section. If the failure to pay the renewal fee was inadvertent, the contractor may renew its registration retroactively by paying an additional nonrefundable penalty renewal fee equal to the amount of the renewal fee within 90 days of the due date of the renewal fee.
(d)If, after a body awarding a contract accepts the contractors bid or awards the contract, the work covered by the bid or contract is determined to be a public work to which Section 1771 applies, either as the result of a determination by the director pursuant to Section 1773.5 or a court decision, the requirements of this section shall not apply, subject to the following requirements:
(1)The body that awarded the contract failed, in the bid specification or in the contract documents, to identify as a public work that portion of the work that the determination or decision subsequently classifies as a public work.
(2)Within 20 days following service of notice on the awarding body of a determination by the Director of Industrial Relations pursuant to Section 1773.5 or a decision by a court that the contract was for public work as defined in this chapter, the contractor and any subcontractors are registered under this section or are replaced by a contractor or subcontractors who are registered under this section.
(3)The requirements of this section shall apply prospectively only to any subsequent bid, bid proposal, contract, or work performed after the awarding body is served with notice of the determination or decision referred to in paragraph (2).
(e)The requirements of this section shall apply to any bid proposal submitted on or after March 1, 2015, to any contract for public work, as defined in this chapter, executed on or after April 1, 2015, and to any work performed under a contract for public work on or after January 1, 2018, regardless of when the contract for public work was executed.
(f)This section does not apply to work performed on a public works project of twenty-five thousand dollars ($25,000) or less when the project is for construction, alteration, demolition, installation, or repair work or to work performed on a public works project of fifteen thousand dollars ($15,000) or less when the project is for maintenance work.
A contractor shall be registered pursuant to this section to be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any public work contract that is subject to the requirements of this chapter. For the purposes of this section, contractor includes a subcontractor as defined by Section 1722.1.
(a)To qualify for registration under this section, a contractor shall do all of the following:
(1)(A)(i)Register with the Department of Industrial Relations in the manner prescribed by the department and pay an initial nonrefundable application fee of four hundred dollars ($400) to qualify for registration under this section and an annual renewal fee on or before July 1 of each year thereafter. thereafter, except as provided in clause (ii). The annual renewal fee shall be in a uniform amount set by the Director of Industrial Relations, and the initial registration and renewal fees may be adjusted no more than annually by the director to support the costs specified in Section 1771.3.
(ii)It is the intent of the Legislature that the application fee and renewal fee for a small business, as defined in Section 14837 of the Government Code, be less than the fees pursuant to clause (i). The application fee for a small business, as defined in Section 14837 of the Government Code, shall be ____ dollars ($____). The application fee for a small business, as defined in Section 14837 of the Government Code, shall be prorated based on the number of months the registration is valid for. The annual renewal fee for a small business, as defined in Section 14837 of the Government Code, shall be ____ dollars ($____).
(iii)The application fee and renewal fee for a contractor or subcontractor pursuant to clause (i) shall not be increased in order to support the decrease of the fees required by clause (ii).
(B)Beginning June 1, 2019, a contractor may register or renew according to this subdivision in annual increments up to three years from the date of registration. Contractors who wish to do so will be required to prepay the applicable nonrefundable application or renewal fees to qualify for the number of years for which they wish to preregister.
(2)Provide evidence, disclosures, or releases as are necessary to establish all of the following:
(A)Workers compensation coverage that meets the requirements of Division 4 (commencing with Section 3200) and includes sufficient coverage for any worker whom the contractor employs to perform work that is subject to prevailing wage requirements other than a contractor who is separately registered under this section. Coverage may be evidenced by a current and valid certificate of workers compensation insurance or certification of self-insurance required under Section 7125 of the Business and Professions Code.
(B)If applicable, the contractor is licensed in accordance with Chapter 9 (commencing with Section 7000) of the Business and Professions Code.
(C)The contractor does not have any delinquent liability to an employee or the state for any assessment of back wages or related damages, interest, fines, or penalties pursuant to any final judgment, order, or determination by a court or any federal, state, or local administrative agency, including a confirmed arbitration award. However, for purposes of this paragraph, the contractor shall not be disqualified for any judgment, order, or determination that is under appeal, provided that the contractor has secured the payment of any amount eventually found due through a bond or other appropriate means.
(D)The contractor is not currently debarred under Section 1777.1 or under any other federal or state law providing for the debarment of contractors from public works.
(E)The contractor has not bid on a public works contract, been listed in a bid proposal, or engaged in the performance of a contract for public works without being lawfully registered in accordance with this section, within the preceding 12 months or since the effective date of the requirements set forth in subdivision (e), whichever is earlier. If a contractor is found to be in violation of the requirements of this paragraph, the period of disqualification shall be waived if both of the following are true:
(i)The contractor has not previously been found to be in violation of the requirements of this paragraph within the preceding 12 months.
(ii)The contractor pays an additional nonrefundable penalty registration fee of two thousand dollars ($2,000).
(b)Fees received pursuant to this section shall be deposited in the State Public Works Enforcement Fund established by Section 1771.3 and shall be used only for the purposes specified in that section.
(c)A contractor who fails to pay the renewal fee required under paragraph (1) of subdivision (a) on or before the expiration of any prior period of registration shall be prohibited from bidding on or engaging in the performance of any contract for public work until once again registered pursuant to this section. If the failure to pay the renewal fee was inadvertent, the contractor may renew its registration retroactively by paying an additional nonrefundable penalty renewal fee equal to the amount of the renewal fee within 90 days of the due date of the renewal fee.
(d)If, after a body awarding a contract accepts the contractors bid or awards the contract, the work covered by the bid or contract is determined to be a public work to which Section 1771 applies, either as the result of a determination by the director pursuant to Section 1773.5 or a court decision, the requirements of this section shall not apply, subject to the following requirements:
(1)The body that awarded the contract failed, in the bid specification or in the contract documents, to identify as a public work that portion of the work that the determination or decision subsequently classifies as a public work.
(2)Within 20 days following service of notice on the awarding body of a determination by the Director of Industrial Relations pursuant to Section 1773.5 or a decision by a court that the contract was for public work as defined in this chapter, the contractor and any subcontractors are registered under this section or are replaced by a contractor or subcontractors who are registered under this section.
(3)The requirements of this section shall apply prospectively only to any subsequent bid, bid proposal, contract, or work performed after the awarding body is served with notice of the determination or decision referred to in paragraph (2).
(e)The requirements of this section shall apply to any bid proposal submitted on or after March 1, 2015, to any contract for public work, as defined in this chapter, executed on or after April 1, 2015, and to any work performed under a contract for public work on or after January 1, 2018, regardless of when the contract for public work was executed.
(f)This section does not apply to work performed on a public works project of twenty-five thousand dollars ($25,000) or less when the project is for construction, alteration, demolition, installation, or repair work or to work performed on a public works project of fifteen thousand dollars ($15,000) or less when the project is for maintenance work.
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Date
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Status
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| Mar 22, 2022 | Re-referred to Com. on L. & E. |
| Mar 21, 2022 | From committee chair, with author's amendments: Amend, and re-refer to Com. on L. & E. Read second time and amended. |
| Feb 10, 2022 | Referred to Com. on L. & E. |
| Feb 1, 2022 | From printer. May be heard in committee March 3. |
| Jan 31, 2022 | Read first time. To print. |
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