05/12/15
Legislative Update
May 2015
The Legislature just passed a very important deadline: May 1 was the last day for policy committees to hear and pass bills with potential fiscal implications. Most bills are now pending in the Appropriations Committee in their house of origin and must be passed out of that committee by May 29. Bills are then considered by the full Senate or Assembly and Senate bills must be passed out of the Senate and Assembly bills passed out of the Assembly by June 5.
Below is an update on a number of priority bills for which C.A.S.H. has taken a position or that staff is actively working. Note that when bills are heard in the Appropriations Committee, the Committee will often defer action, sending bills to the “suspense file.” This is a mechanism whereby each house collects and prioritizes bills with state fiscal implications, acting upon them at a later date.
Bills that do not meet deadlines in 2015 become “two-year bills” and will have a second chance to move forward at the beginning of 2016.
AB 219 (Daly) – Concrete Delivery
This bill would expand the definition of “public works” for purposes of prevailing wage law to include the hauling and delivery of ready-mixed concrete or asphaltic concrete to a public works site. It is co-sponsored by a number of labor organizations, who argue that concrete delivery is already covered by prevailing wage law if delivered by the on-site general contractor or a subcontractor, but not by a material supplier. Opponents include Associated General Contractors, who states that ready-mix concrete is delivered by drivers, not construction workers. C.A.S.H. is actively watching the bill to ensure that it does not expand to cover delivery of other materials.
C.A.S.H. Position: Watch
Status: Pending in Assembly Appropriations Committee – suspense file.
AB 552 (O’Donnell) – Consequential Damages
This bill seeks to limit the risk that contractors shoulder regarding amounts owed for potential damages in public works contracts. Specifically, the bill would require a contract that includes a clause requiring a contractor to be responsible for consequential damages to specify those damages, i.e. it could create a cap on such damages. The bill is sponsored by the Construction Employers Association, who argues that consequential damages drive up the cost of public works projects by increasing contractor potential liability costs and limits the number of small- and mid-sized contractors who can participate on such projects due to their financial bonding capacity. C.A.S.H. has concerns with the limitations that this bill would place on school districts that would be left holding the bag for damages in excess of the cap.
C.A.S.H. Position: Concern – Working to limit school district liability and project costs.
Status: Passed by the Assembly; awaiting referral to policy committee in the Senate.
AB 566 (O’Donnell) – Prequalification and Lease-Leaseback
This bill would extend the new prequalification requirement established by AB 1565 (2013) to all school construction projects above $1 million, excluding projects in small school districts, regardless of funding source. These prequalification requirements currently apply only to projects funded by the School Facility Program. The bill also creates more stringent requirements for projects using the lease-leaseback delivery method by requiring the use of a skilled and trained workforce (apprentices and journeypersons). C.A.S.H. is proposing amendments to the author’s staff and the sponsors, the State Building and Construction Trades Council, to address implementation concerns regarding availability of appropriate workers. A more detailed analysis will be provided next week.
C.A.S.H. Position: Seeking Amendments
Status: Passed by the Assembly; awaiting referral to policy committee in the Senate.
AB 677 (Dodd) – Safety Locks
This bill would require, by January 1, 2022, all classrooms and rooms with an occupancy of 5 or more to be equipped with locks that are lockable from the inside, also known as security or interior door locks. It would also require all School Facility Program modernization projects as of January 1, 2016, to include such security door locks. C.A.S.H. staff worked with Assembly Member Dodd’s staff to educate and provide information about prior efforts to require the installation of security locks, and the Assembly Member agreed to tie the requirements to a future state bond funding source. The recent amendments stipulate that these requirements would only apply to projects funded by a future state school bond. While C.A.S.H.’s concerns are primarily related to costs, we continue to have concerns with the language in the bill, and we are requesting that the author strike the provision requiring retrofitting of all doors by 2022.
C.A.S.H. Position: Oppose Unless Amended
Status: Pending in Assembly Appropriations Committee.
AB 715 (Daly) – Assessable Space
This bill revises the definition of assessable space for purposes of calculating developer fees, specifying that the following are excluded from the definition: covered walkway, uncovered walkway, enclosed walkway, bike storage locker, and detached personal property storage. The bill is sponsored by the California Apartment Association, which argues that such spaces are not considered “livable space.” C.A.S.H. has adopted an oppose position because the bill would decrease the developer fee revenue available to school districts.
C.A.S.H. Position: Oppose
Status: Pending in Assembly Education Committee.
AB 882 (Wilk) – Portable Electronic Devices
This bill as introduced sought to limit the use of Proposition 39 (2000) local bond dollars for the purchase of portable electronic devices, including laptops and tablet computers, and instructional materials. The author is seeking to prohibit the use of long-term bond funds for items with a relatively short useful life. C.A.S.H. is working with the author’s office to educate them about the existing Federal tax code requirement for entities issuing tax-exempt bonds to match the maturity of the bond with the life of the item being purchased. The author has willingly taken amendments to the bill to address our concerns and is now, at C.A.S.H.’s suggestion, developing language to codify California conformity with Federal tax code.
C.A.S.H. Position: Oppose Unless Amended (as introduced)
Status: Pending in Assembly Education Committee.
AB 912 (Wilk) – Local Bond Notification Requirements
This bill creates new notification requirements related to the issuance of all local bonds or school construction financing. Current law specifies notification requirements for the issuance of revenue bonds, and this bill would extend those requirements to local general obligation bonds. Under AB 912, districts would be required to notify the county superintendent of schools and the county auditor thirty days before the governing board approves issuance of such bonds and other debt instruments, and the notification must include information such as repayment schedules and the anticipated effect of the debt issuance. C.A.S.H. took an oppose position on this bill and worked with the author to share our concerns, which were rooted in a negotiated agreement from a prior bill, AB 2197 (Mullin) from 2008. C.A.S.H. questioned why such requirements should apply to debt that has already been approved by voters. Assembly Member Wilk has decided not to move forward with the bill this year and it has become a two-year bill.
C.A.S.H. Position: Oppose
Status: Two-Year Bill
AB 975 (Frazier) – Prequalification
This bill prohibits a school district from disqualifying a prospective bidder participating in a prequalification process solely based on whether the bidder has filed a claim against a project owner through the courts, mediation, or arbitration. The proponents, the Construction Employers’ Association, claim that public agencies are disqualifying bidders involved in claims regardless of the outcome. C.A.S.H. initially had concerns that the bill would prohibit disqualifying bidders that don’t meet the minimum requirements, but recent amendments have tightened the bill and removed C.A.S.H.’s concerns.
C.A.S.H. Position: Neutral
Status: Pending in Assembly Appropriations Committee.
AB 1126 (Rendon) – HVAC Inspection Reports
This bill would require schools to post on their websites the most recent date of a heating, ventilation, and air conditioning system inspection report and information on how the report may be obtained. The bill previously required schools to post a copy of all HVAC inspection reports, but it has been narrowed in the legislative process. C.A.S.H. believes this bill is unnecessary because HVAC systems are required to be maintained in good repair and should be covered in the Local Control Accountability Plan (LCAP).
C.A.S.H. Position: Concern
Status: Passed by the Assembly; awaiting referral to policy committee in the Senate.
AB 1347 (Chiu) – Claims Process
This bill is a new attempt to address the change order process, similar to AB 2471 (Frazier) from last year. AB 1347 is sponsored by United Contractors and a number of other labor groups and is attempting to achieve timely payment for undisputed claims. The bill was recently amended to address some of the concerns of the opposition, though there are still significant issues with the bill. The bill would require a public entity to respond to a claim within 30 days and to identify disputed versus undisputed amounts; non-response would mean approval of the full amount. The public entity would then have 30 days to pay undisputed amounts, and disputed portions would go through a non-binding mediation process. The bill allows a contractor to submit a claim on behalf of a subcontractor without standing, and interest would be charged on all unpaid claims. The bill favors the contractor in the claims process, and as such C.A.S.H. is working with a coalition of other public works entities to oppose the bill and negotiate amendments to address our concerns.
C.A.S.H. Position: Oppose
Status: Pending in Assembly Appropriations Committee.
AB 1358 (Dababneh) – Design-Build Contracts
This bill extends the sunset on the authorization for school districts to use the design-build delivery method from January 1, 2020 until January 1, 2025. AB 1358 re-casts the design-build authorizing provisions and requirements, most significant of which pertains to the use of a skilled and trained workforce (journeypersons and apprentices). The language is similar to the language in AB 566 above. The bill also lowers the threshold for use of design-build from $2.5 million to $1 million which is consistent with the pre-qualification requirement that also applies to design-build delivery.
C.A.S.H. Position: Watch
Status: Pending on the Assembly floor.
SB 47 (Hill) – Artificial Turf
As introduced, SB 47 proposed to prohibit the installation of new artificial turf fields and playground surfaces containing waste tires (aka crumb rubber infill) for two years beginning January 1, 2016 while the state conducted a comprehensive study of the potential health impacts of crumb rubber infill. The author has amended the bill in an attempt to meet some of the concerns of opponents, which include C.A.S.H. and others in the education community as well as the International Union of Painters and Applied Trades. While the author removed the prohibition on the installation of such artificial turf fields and play surfaces, he adopted amendments to create additional bid requirements that would make it more difficult to move forward with such projects, and C.A.S.H. continues to oppose the bill. The bill has been placed on the suspense file in the Senate Appropriations Committee, and the Department of Finance estimates the bill would create significant state agency costs in the millions in order to conduct the study required by the bill. C.A.S.H. continues to engage with the author’s office to express our concerns and provide feedback on possible amendments; C.A.S.H. supports the study but opposes limitations on the use of artificial turf with crumb rubber infill absent a direct connection to health hazards.
C.A.S.H. Position: Oppose Unless Amended
Status: Pending in Senate Appropriations Committee – suspense file.
SB 111 (Fuller) – Military Base Schools
This bill would appropriate $61 million in FY 2015-16 General Funds to the State Allocation Board for apportionments at military base schools to help fund local match requirements for the federal Department of Defense school facility grant program for public military base schools. C.A.S.H. has taken a support position on this bill.
C.A.S.H. Position: Support
Status: Pending in Senate Appropriations Committee – suspense file.
SB 222 (Block) – Statutory Liens
This bill would require an automatic lien on all tax revenues received from local bond issuances; revenues received from the levy and collection of the tax would be immediately subject to the lien. The bill is sponsored by San Diego Unified School District and is intended to help improve rating agency treatment of school district GO bonds, possibly leading to lower borrowing costs. C.A.S.H. has adopted a support position. The bill was passed by the Senate Governance and Finance Committee with amendments to apply the bill to all public entities that issue bonds, not just schools.
C.A.S.H. Position: Support
Status: Passed by the Senate; awaiting referral to policy committee in the Assembly.
SB 313 (Galgiani) – School Siting
This bill would create new requirements for a school district before it can declare a zoning ordinance inapplicable to a proposed school site. Specifically, SB 313 would require a school board to notify the city or county at least 30 days before a vote to deem a zoning ordinance inapplicable. The notification must include the reason that the board intends to take that action and be based on written findings that the ordinance fails to meet the school district’s facilities needs. The bill is sponsored by the California Farm Bureau Federation and supported by the League of Cities. C.A.S.H. opposes the bill because it adds another hoop for schools to jump through when siting or expanding schools, forcing them to justify their decision to local governments while delaying school construction projects.
C.A.S.H. Position: Oppose
Status: Pending on the Senate floor.
~ C.A.S.H. Staff
