State Survey of P3 Authorizing Statutes: California

Cal. Streets & Highway Code §143

Summary

Caltrans and regional transportation agencies may enter into P3s for transportation projects. The law requires the California Transportation Commission to approve the agreement. The law expires on January 1, 2017.

The private partner must demonstrate that it has the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance.

Excerpt:

“143(7) The contracting entity or lessee shall have the following qualifications:

(3) Evidence that establishes that members of the contracting entity or lessee have the capacity to obtain all required payment and performance bonding, liability insurance, and errors and omissions insurance.”

Cal. Civ. Code §§ 5956 thru 5956.10

Summary

The law authorizes local governmental agencies to enter into agreements with private entities to study, plan, design, construct, develop, finance, maintain, rebuild, improve, repair, and/or operate a variety of fee‐producing infrastructure facilities, including rail, highway, bridge, tunnel, or airport projects. The law prohibits using the authority granted in this provision to design, construct, finance, or operate a toll road on a state highway.

The agreement between the governmental agency and the private entity shall include requirements for performance and payment bonds.

Excerpt:

Ҥ 5956.6

(b) The agreement between the governmental agency and the private entity shall include, but need not be limited to, provisions to ensure the following:

(2) Performance bonds as security to ensure completion of the construction of the facility and contractual provisions that are necessary to protect the revenue streams of the project.

[…]

(13) Payment bonds to secure the payment of claims of laborers, mechanics, and materials suppliers employed on the work under the contract. Payment bonds required under this subdivision shall conform to the requirements of Sections 9550 to 9566, inclusive, of the Civil Code.”