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ASSEMBLY BILL 1702 (ARCHIE-HUDSON – 1992)
CHAPTER 1042, STATUTES OF 1992, AB 1702
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Public Contract Code section 7107 was added in 1992 following legislative passage of Assembly Bill 1702, a single-section bill that proposed only to add this new section. (See Exhibits #1a through #1f) Assembly member Marguerite Archie‑Hudson introduced Assembly Bill 1702 on March 8, 1991 at the request of the Associated General Contractors of California, the Southern California Contractors Association, and the Associated General Contractors - San Diego Chapter. (See Exhibits #1a; #11, page 1; and #12, documents SFA-2 and SFA‑8)
Assembly Bill 1702 was assigned to the Assembly Committee on Consumer Protection, Governmental Efficiency, and Economic Development where policy issues raised by the bill were considered. (See Exhibit #3) After approval by that Committee, the Assembly Committee on Ways and Means examined its fiscal ramifications. (See Exhibit #5) The Assembly amended the bill on May 13, 1991. (See Exhibits #1b and #2) Assembly Bill 1702 was approved by the Assembly and forwarded to the Senate on June 18, 1991. (See Exhibit #2)
While in the Senate, the Committee on Governmental Organization considered the policy issues raised by the bill. (See Exhibit #8) Subsequent to approval by that Committee, the measure was assigned to the Senate Committee on Appropriations
which examined its fiscal implications. (See Exhibit #2) The Senate amended Assembly Bill 1702 on June 28, July 7, and August 20, 1992. (See Exhibits #1c through #1e and #2) The bill was thereafter approved by the Senate and returned to the Assembly. (See Exhibit #2)
The Assembly approved the Senate amendments and forwarded Assembly Bill 1702 to the Governor on September 1, 1992. (See Exhibit #2) Governor Pete Wilson signed the bill on September 27, 1992, and it was recorded by the Secretary of State on September 29, 1992 as Chapter 1042, Statutes of 1992. (See Exhibits #1f and #2)
A Third Reading analysis of Assembly Bill 1702 as last amended on August 20, 1992, prepared by the Office of Senate Floor Analyses, stated that:
This bill would authorize, on or after January 1, 1993, the release of retained funds on all public works construction contracts within 60 days after a project is accepted by a public entity.
(See Exhibit #11, page 1)
The purpose of Assembly Bill 1702 was summarized as follows in the Concurrence in Senate Amendments analysis prepared by the Assembly Committee on Consumer Protection, Governmental Efficiency, and Economic Development:
The purpose of the bill, according to the author, is to ensure that retentions on public construction contracts are released when the project is completed. The state and general contractors apparently frequently use retentions as an interest free “float” at the expense of the general contractors and the subcontractors.
(See Exhibit #13, page 2)