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AB-1277 Transportation projects: oversight committees.(2019-2020)



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AB1277:v98#DOCUMENT

Amended  IN  Assembly  March 19, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1277


Introduced by Assembly Member Obernolte

February 21, 2019


An act to add Chapter 21 (commencing with Section 2710) to Division 3 of the Streets and Highways Code, relating to transportation.


LEGISLATIVE COUNSEL'S DIGEST


AB 1277, as amended, Obernolte. Major transportation infrastructure construction Transportation projects: oversight committees.
Existing law provides various sources of revenue for transportation projects undertaken by state and local agencies. The Public Works Project Peer Review Act of 2013 authorizes a public agency principally tasked with administering, planning, developing, and operating a public works project to establish a peer review group to give expert advice on the scientific and technical aspects of the public works project, as specified.
This bill would require a public agency undertaking a publicly funded major transportation infrastructure construction project that is estimated to cost $500,000,000 or more to form an oversight committee subject to applicable open meeting laws and to develop and use risk management plans throughout the course of the project. The bill would requires the oversight committee (1) to be composed of specified individuals, (2) to act as the authority for critical decisions regarding the project, and (3) to have sufficient staff to support decision making. By imposing new requirements on local agencies, administering a megaproject, which the bill would define as a transportation project with total estimated development and construction costs exceeding $1,000,000,000, to take specified actions to manage the risks associated with the megaproject, including establishing a comprehensive risk management plan and regularly reassessing its reserves for potential claims and unknown risks. The bill would require a public agency administering a megaproject to establish a project oversight committee composed of specified individuals to review the megaproject and perform other specified duties. The bill would require the public agency administering the megaproject to provide quarterly reports to the project oversight committee. The bill would require the project oversight committee to provide annual reports to the California Transportation Commission until the year following the completion of the megaproject. By requiring local agencies to perform additional duties, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 21 (commencing with Section 2710) is added to Division 3 of the Streets and Highways Code, to read:
CHAPTER  21. Transportation Infrastructure Oversight Committees

2710.
 For purposes of this chapter, the following definitions apply, unless expressly stated otherwise:
(a) “Administering agency” means a public agency principally tasked with administering, planning, developing, and operating a transportation project.
(b) “Megaproject” means a transportation project with total estimated development and construction costs exceeding one billion dollars ($1,000,000,000).
(c) “Project oversight committee” means the committee created pursuant to Section 2712 to implement a project oversight and project control process for a megaproject.

2711.
 (a) To ensure that an administering agency manages the risks associated with a megaproject, the agency shall, at a minimum, take all of the following actions:
(1) Establish a comprehensive risk management plan that clearly defines roles and responsibilities for risk management and addresses the process by which it will identify and quantify project risks, implement and track risk response activities, and monitor and control risks throughout the duration of the project.
(2) Qualify the effect of identified risks in financial terms.
(3) Develop and maintain documents to track identified risks and related mitigation steps.
(4) Regularly update its estimates of capital and capital outlay support costs.
(5) Regularly reassess its reserves for potential claims and unknown risks, incorporating information related to risks identified and quantified through its risk assessment process.
(6) Regularly integrate estimates for capital, capital outlay support costs, and contingency reserves into a projectwide report.
(b) The requirements contained in subdivision (a) shall be deemed to have been satisfied if an administering agency is undertaking similar activities for a megaproject as required by a state or federal agency.

2712.
 (a) (1) An administering agency shall establish a project oversight committee for a megaproject for all of the following purposes:
(A) Reviewing project status, costs, and schedules.
(B) Resolving project issues.
(C) Evaluating project changes.
(D) Developing and regularly updating cost estimates and risk assessments for the project.
(E) Providing project direction.
(2) The project oversight committee shall be established after 30 percent of the design of the project is completed but before the administering agency solicits bids for construction.
(b) The project oversight committee shall be subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code) or the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code), as applicable.
(c) The project oversight committee shall be composed of at least three directors, or their designees, with one member each from the administering agency and two other public agencies involved in the project. If there are fewer than two other agencies involved in the project, the number of members required by this subdivision shall be reduced accordingly.
(d) Expenses incurred by the public agencies for costs directly related to duties required by this section shall be reimbursed by the administering agency.
(e) The administering agency shall provide the project oversight committee any and all information that the project oversight committee requests to carry out its responsibilities.
(f) The requirement contained in subdivision (a) shall be deemed to have been satisfied if an administering agency has established a project oversight committee for all of the purposes listed in that subdivision as required by a state or federal agency.

2713.
 (a) If a project oversight committee is established pursuant to Section 2712, the administering agency shall provide quarterly reports to the project oversight committee, including, but not limited to, the construction status, actual expenditures, and forecasted costs and schedules for the project.
(b) (1) The project oversight committee shall provide annual reports to the commission.
(2) The reports shall include details of the megaproject and all information necessary to clearly describe the status of the project, including, but not limited to, all of the following:
(A) A progress report.
(B) The baseline budget for capital and capital outlay support costs.
(C) The current or projected budget for capital and capital outlay support costs.
(D) Expenditures to date for capital and capital outlay support costs.
(E) A comparison of the current or projected schedule and the baseline schedule.
(F) A summary of milestones achieved during the previous year and any issues identified and actions taken to address those issues.
(3) The report required by this subdivision shall no longer be required beginning in the year following completion of the megaproject.

SECTION 1.Chapter 21 (commencing with Section 2710) is added to Division 3 of the Streets and Highways Code, to read:
21.Transportation Infrastructure Oversight Committees
2710.

(a)A public agency undertaking a publicly funded major transportation infrastructure construction project that is estimated to cost five hundred million dollars ($500,000,000) or more shall form an oversight committee subject to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code) or the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code), as applicable, and shall develop and use risk management plans throughout the course of the project.

(b)The oversight committee shall be composed of at least all of the following members selected by the public agency undertaking the project:

(1)At least three members from three different agencies involved in the project. If there are fewer than three other agencies involved in the project, the number of members required by this paragraph shall be reduced accordingly.

(2)At least five members to support the ability of its members to conduct day-to-day business.

(c)The oversight committee shall act as the authority for critical decisions regarding the project and shall have sufficient staff to support decision making.

SEC. 2.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.