A BILL TO BE ENTITLED
AN ACT to improve the state capital facilities program by directing the state building commission to review the program and implement measures to reduce delays and increase accountability among the parties to the design and construction process, by increasing the bidding, bonding, and designer selection thresholds for state construction contracts, By directing the state personnel office to conduct a market study of architect and engineering position classifications, and by appropriating funds for additional plan review and enforcement personnel at the department of insurance.
Whereas, delays in the completion of State capital improvement projects that occur during designer selection, the construction plan review process, construction, and the construction inspection process can result in millions of dollars in increased construction costs due to inflation; and
Whereas, the State Building Commission was created within the Department of Administration to direct and guide the State's capital facilities development and management program; and 
Whereas, the State Building Commission has the responsibility for establishing the criteria for and overseeing designer selection for State facilities, adopting rules, coordinating the plan review, approval, and permit process for State capital improvements, and studying and recommending ways to improve the effectiveness and efficiency of the State's capital facilities development and management programs; and 
Whereas, greater clarity, coordination, and accountability among the agencies responsible for the examination of plans and specifications for the construction and renovation of State facilities and for the construction inspections of those facilities, the owning agencies/institutions as defined in the State Construction Manual, designers, and contractors could reduce these delays and facilitate the timely completion of such projects resulting in significant dollar savings to the State; and
Whereas, the influx of project reviews occasioned by the 2000 Higher Education Bond Act created serious workload and resource issues for the State Construction Office and the Department of Insurance; and
Whereas, costly delays in the plan review and inspections process for State construction projects are occurring in part due to the inability of the State to attract qualified architects and engineers to conduct such reviews and inspections, and there are no plans at this time for a State Personnel Office market study of architect and engineering positions; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  The State Building Commission shall examine the State capital improvement process and shall establish or modify, as necessary, the guidelines for the selection of designers and the rules governing the design, plan review, and inspection of State building projects.  In carrying out its examination and proposing and modifying its guidelines and rules, the Commission shall consult with all of the State departments involved in the capital improvement process, including (i) the agencies responsible for the examination of plans and specifications for the construction and renovation of State facilities and for the supervision and inspection of all work done and materials used in the construction or renovation of State facilities ("review and inspection agencies"), (ii) the owning agencies/institutions as defined in the State Construction Manual ("owning agencies"), (iii) the Board of Governors of The University of North Carolina, and (iv) the State Board of Community Colleges.  In carrying out the provisions of this section, the Commission shall:
(1)	Examine the State Construction Manual for opportunities to increase the accountability of all parties to the State capital improvement process.
(2)	Determine whether the review and inspection agencies have sufficiently formalized and documented their review standards and processes. 
(3)	Oversee the proper documentation of review standards and processes where necessary.
(4)	Facilitate the establishment of clear expectations for all parties to the process, including the owning agencies, review and inspection agencies, designers, and contractors. The Commission shall work with owning agencies and review and inspection agencies to develop a standard set of time measurements for the design process and the construction process and shall consider the development of other standard measures of performance for all the parties to the design, review, inspection, and construction process.
(5)	Review the State's standard design contract for opportunities to strengthen the accountability of design firms to the owning agencies. In particular, the Commission shall consider the inclusion of a designer's e-mail address as a requirement of the standard design contract.
SECTION 2.  The State Building Commission shall file an interim report on or before April 30, 2008, and a final report on or before December 31, 2008, with the Joint Legislative Commission on Governmental Operations, the Joint Legislative Oversight Committee on Capital Improvements, the Appropriations Committees of the House of Representatives and Senate, and the Fiscal Research Division of the General Assembly.  The report shall cover the activities of the Commission in implementing the provisions of Section 1 of this act and any recommendations to improve the coordination and efficacy of the design, review, inspection, and construction process.  The report also shall cover the implementation of the recommendations from the Legislative Study Commission on State Construction Inspections, including:
(1)	Efforts to include owning agencies on all correspondence between review and inspection agencies, designers, and contractors.
(2)	Implementation of new services by review and inspection agencies, including the use of face-to-face meetings.
(3)	The impact of any statutory changes providing State agencies with greater flexibility in design and construction contracts.
SECTION 3.  The State Personnel Office shall work with the Department of Administration, the Department of Insurance, and other State agencies employing architects and engineers to perform a market study of architect and engineer salaries and position classifications.  The State Personnel Office shall complete the study as soon as possible, but in no event later than six months from the effective date of this section.
SECTION 4.  G.S. 143‑129(a) reads as rewritten:
"(a)	Bidding Required. – No construction or repair work requiring the estimated expenditure of public money in an amount equal to or more than five hundred thousand dollars ($500,000) or purchase of apparatus, supplies, materials, or equipment requiring an estimated expenditure of public money in an amount equal to or more than ninety thousand dollars ($90,000) may be performed, nor may any contract be awarded therefor, by any board or governing body of the State, or of any institution of the State government, or of any political subdivision of the State, unless the provisions of this section are complied with.
For purchases of apparatus, supplies, materials, or equipment, the governing body of any political subdivision of the State may, subject to any restriction as to dollar amount, or other conditions that the governing body elects to impose, delegate to the manager, school superintendent, chief purchasing official, or other employee the authority to award contracts, reject bids, or readvertise to receive bids on behalf of the unit. Any person to whom authority is delegated under this subsection shall comply with the requirements of this Article that would otherwise apply to the governing body."
SECTION 5.  G.S. 44A‑26(a) reads as rewritten:
"(a)	When the total amount of construction contracts awarded for any one project exceeds  five hundred thousand dollars ($500,000), a performance and payment bond as set forth in (1) and (2) is required by the contracting body from any contractor or construction manager at risk with a contract more than fifty thousand dollars ($50,000). In the discretion of the contracting body, a performance and payment bond may be required on any construction contract as follows:
(1)	A performance bond in the amount of one hundred percent (100%) of the construction contract amount, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract. Such bond shall be solely for the protection of the contracting body that is constructing the project.
(2)	A payment bond in the amount of one hundred percent (100%) of the construction contract amount, conditioned upon the prompt payment for all labor or materials for which a contractor or subcontractor is liable. The payment bond shall be solely for the protection of the persons furnishing materials or performing labor for which a contractor, subcontractor, or construction manager at risk is liable."
SECTION 6.  G.S. 143‑64.34 reads as rewritten:
"§ 143‑64.34.  Exemption of certain projects.
	State capital improvement projects under the jurisdiction of the State Building  Commission, capital improvement projects of The University of North Carolina, and community college capital improvement projects, where the estimated expenditure of public money is less than  five hundred thousand dollars ($500,000), are exempt from the provisions of this Article.
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SECTION 7.  There is appropriated from the General Fund to the Department of Insurance the sum of seven hundred seventy-seven thousand three hundred eighty-six dollars ($777,386) for the 2007‑2008 fiscal year and the sum of seven hundred twenty-nine thousand three hundred eighty six dollars ($729,386) for the 2008‑2009 fiscal year to establish one building systems engineer III position, five building systems engineer II positions, and two State Building Code enforcement officer positions.
SECTION 8.  Sections 1, 2, and 3 of this act are effective when they become law.  Sections 4, 5, and 6 are effective when they become law and apply to projects that are funded by the General Assembly on or after July 1, 2007.  Section 7 of this act becomes effective July 1, 2007.