(a) For the purposes of this section, the following definitions shall apply:

(1) “Design-build” means a construction procurement process in which both the design and construction of a project are procured from a single entity.

(2) “Design-build project” means a capital outlay project using the design-build construction procurement process.

(3) “Design-build entity” means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting, architectural, and engineering services as needed.

(4) “Design-build solicitation package” means the performance criteria, any concept drawings, the form of contract, and all other documents and information that serve as the basis on which bids or proposals will be solicited from the design-build entities.

(5) “Design-build phase” means the period following the award of a contract to a design-build entity in which the design-build entity completes the design and construction activities necessary to fully complete the project in compliance with the terms of the contract.

(6) “Performance criteria” means the information that fully describes the scope of the proposed project and includes, but is not limited to, the size, type, and design character of the buildings and site; the required form, fit, function, operational requirements, and quality of design, materials, equipment, and workmanship; and any other information deemed necessary to sufficiently describe the state’s needs. Performance criteria may include concept drawings, which include any schematic drawings or architectural renderings that are prepared in the detail necessary to sufficiently describe the state’s needs.

(b) (1) Except as otherwise specified in subparagraphs (A) to (D), inclusive, of paragraph (2) funds appropriated for a design-build project shall not be expended by any state agency, including, but not limited to, the University of California, the California State University, the California Community Colleges, and the Judicial Council, until the Department of Finance and the State Public Works Board have approved performance criteria.

(2) This section shall not apply to any of the following:

(A) Amounts for acquisition of real property, in fee or any lesser interest.

(B) Amounts for equipment or minor capital outlay projects.

(C) Amounts appropriated for performance criteria.

(D) Amounts appropriated for preliminary plans, if the appropriation was made prior to January 1, 2005.

(c) Any appropriated amounts for the design-build phase of a design-build project, where funds have been expended on the design-build phase by any state agency prior to the approval of the performance criteria by the State Public Works Board, and all amounts not approved by the board under this section shall be reverted to the fund from which the appropriation was made. A design-build project for which a capital outlay appropriation is made shall not be put out to design-build solicitation until the bid package has been approved by the Department of Finance. A substantial change shall not be made to the performance criteria as approved by the board and the Department of Finance without written approval by the Department of Finance. The Department of Finance shall approve any proposed bid or proposal alternates set forth in the design-build solicitation package.

(d) The State Public Works Board may augment a design-build project in an amount of up to 20 percent of the capital outlay appropriations for the project, irrespective of whether any such appropriation has reverted. For projects authorized through multiple fund sources, including, but not limited to, general obligation bonds and lease-revenue bonds, to the extent permissible, the Department of Finance shall have full authority to determine which of the fund sources will bear all or part of an augmentation. The board shall defer all augmentations in excess of 20 percent of the amount appropriated for each design-build project until the Legislature makes additional funds available for the specific project.

(e) In addition to the powers provided by Section 15849.6, the State Public Works Board may further increase the additional amount in Section 15849.6 to include a reasonable construction reserve within the construction fund for any capital outlay project without augmenting the project. The amount of the construction reserve shall be within the 20 percent augmentation limitation. The board may use this amount to augment the project, when and if necessary, after the lease-revenue bonds are sold to ensure completion of the project.

(f) Any augmentation in excess of 10 percent of the amounts appropriated for each design-build project shall be reported to the Chairperson of the Joint Legislative Budget Committee, or his or her designee, 20 days prior to board approval, or not sooner than whatever lesser time the chairperson, or his or her designee, may in each instance determine.

(g) (1) The Department of Finance may change the administratively or legislatively approved scope for major design-build projects.

(2) If the Department of Finance changes the approved scope pursuant to paragraph (1), the department shall report the changes and associated cost implications to the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the respective fiscal committees, and the legislative members of the State Public Works Board 20 days prior to the proposed board action to recognize the scope change.

(h) The Department of Finance shall report to the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the respective fiscal committees, and the legislative members of the State Public Works Board 20 days prior to the proposed board approval of performance criteria for any project when it is determined that the estimated cost of the total design-build project is in excess of 20 percent of the amount recognized by the Legislature.

(Amended by Stats. 2015, Ch. 14, Sec. 1. (AB 114) Effective June 24, 2015.)