Bill Text: CA AB2270 | 2015-2016 | Regular Session | Introduced

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

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Bill Title: California Infrastructure and Economic Development Bank: surety bond program.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Failed) 2016-11-30 - From Senate committee without further action. [AB2270 Detail]

Download: California-2015-AB2270-Introduced.html

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BILL NUMBER: AB 2270	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bonta

                        FEBRUARY 18, 2016

   An act to add Article 3 (commencing with Section 14848) to Chapter
6.5 of Part 5.5 of Division 3 of Title 2 of the Government Code, and
to amend Section 10221 of the Public Contract Code, relating to
public contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2270, as introduced, Bonta. Public contracts: business
development: statewide bonding program.
   Existing law requires that public contracts with state agencies
provide for the filing of separate performance and payment bonds by
the contractor in the form of bonds executed by an admitted surety
insurer, as provided.
   This bill would establish, in the Department of General Services,
a statewide contractor bonding program, to be administered by the
Office of Small Business and Disabled Veteran Business Enterprise
Services, for the purpose of enabling participating contractors to
meet any applicable bid, payment, or performance bonding requirements
for public contracts with state agencies. This bill would authorize
the office to act as guarantor on surety bonds for participating
contractors on contracts with state agencies and require the office
to provide specified technical assistance to participating
contractors. The bill would authorize the office to charge
participating contractors fees for the provision of these services,
not to exceed the amount necessary to cover the costs incurred in the
administration of these provisions.
   This bill would require the office to establish a request for the
proposals process by which contractors may participate in the program
as a participating contractor and to give preference to contractors
that are disadvantaged business enterprises, small business
enterprises, or disabled veteran business enterprises, as specified.
The bill would authorize the office to terminate a contractor's
participation after a reasonable period of time if the contractor is
no longer in compliance with the requirements of the program or
suspend a participating contractor that defaults on a bond from
transacting any business with the state for a period of not less than
3 years and not more than 10 years.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 3 (commencing with Section 14848) is added to
Chapter 6.5 of Part 5.5 of Division 3 of Title 2 of the Government
Code, to read:

      Article 3.  Statewide Contractor Bonding Program


   14848.  As used in this article, the following definitions shall
apply:
   (a) "Office" means the Office of Small Business and Disabled
Veteran Business Enterprise Services established within the
department pursuant to Section 14839.
   (b) "Program" means the statewide contractor bonding program
established pursuant to this chapter.
   (c) "Participating contractor" means a person seeking to bid on a
contract with a state agency that is required by law, including, but
not limited to, Sections 10221 to 10225, inclusive, of the Public
Contract Code, to acquire bonds to participate in those contracts and
participate in the program.
   14848.10.  There is in the department a statewide contractor
bonding program for the purpose of enabling participating contractors
to meet any applicable bid, payment, or performance bonding
requirements for public contracts with state agencies. The office
shall be the entity to administer this program.
   14848.20.  The office may act as guarantor on a surety bond for a
participating contractor on a contract with a state agency.
   14848.30.  (a) The office shall establish a request for proposals
process by which contractors may participate in the program as
participating contractors pursuant to this chapter.
   (b) In considering requests for proposals for assistance pursuant
to this article, the department shall give preference to contractors
that are any of the following:
   (1) A disadvantaged business enterprise, as defined in Section
2051 of the Public Contract Code.
   (2) A small business enterprise certified pursuant to Article 1
(commencing with Section 14835).
   (3) A disabled veteran business enterprise, as defined in Section
999 of the Military and Veterans Code.
   (c) (1) The office may terminate a contractor's participation in
the program after a reasonable period of time if the contractor is no
longer in compliance with the requirements of the program.
   (2) The office may suspend a participating contractor that
defaults on a bond issued pursuant to this article from transacting
any business with the state either directly as a prime contractor or
indirectly as a subcontractor, for a period of not less than three
years and not more than 10 years. A contractor that was previously a
participating contractor but was suspended pursuant to this paragraph
may resume participation in the bonding program at the end of his or
her suspension upon approval by the office.
   14848.40.  The office shall provide technical assistance to a
participating contractor. Technical assistance provided pursuant to
this section shall include, but is not limited to, all of the
following:
   (a) Assessment and identification of the particular barriers
facing the participating contractor and development of solutions to
those barriers. Activities pursuant to this subdivision may include
the following:
   (1) Assessments by surety and construction experts.
   (2) Development of a business plan.
   (3) Workshops addressing the following topics:
   (A) Basic information pertaining to contractor bonding.
   (B) Understanding the surety process and underwriting.
   (C) The process for bidding on state projects.
   (D) Addressing stop notices.
   (E) Strategies for accessing capital.
   (F) Prevailing wages.
   (G) Job safety and the Occupational Safety and Health
Administration.
   (H) Certification.
   (I) Any other topics that would be beneficial to the participating
contractor.
   (4) Project field support.
   (b) Identification of and assistance in obtaining other financial
support and resources. Activities pursuant to this subdivision may
include the following:
   (1) Linkages with accountants, brokers, and surety companies
committed to helping contractors build bonding and organizational
capacity.
   (2) Pre-qualifications for additional assistance.
   (3) Collateral guarantees.
   (c) Monitoring and reporting on the progress of the participating
contractor, including the following:
   (1) Collaboration with other programs.
   (2) Progress on any project for which a bond is issued pursuant to
this article.
   (3) Defaults on a bond issued pursuant to this article.
   (4) Funds administration. Notwithstanding subdivision (b) of
Section 14848.50, the office shall not charge a participating
contractor fees for the purpose of this paragraph.
   14848.50.  (a) The department shall adopt rules and regulations
necessary to implement the provisions of this article.
   (b) The office may charge a participating contractor fees for the
provision of services pursuant to this article. The fees shall not
exceed the amount necessary to cover the costs incurred in the
administration of this article.
  SEC. 2.  Section 10221 of the Public Contract Code is amended to
read:
   10221.  Every contract shall provide for the filing of separate
performance and payment bonds by the contractor in the form of bonds
executed by  either  an admitted surety insurer  or the
Office of Small Business and Disabled Veteran Business Enterprise
Services pursuant to Section 14848.20 of the Government Code and
not deposits in lieu of bond, subject to the approval of the
department.