Public contracts: claim resolution.

All provisions of the California SOAR Guaranteed Income Program were removed, including the $1,000 monthly payment to homeless 12th graders (May-August 2026), the tax exclusions in the Revenue and Taxation Code, the means-tested program exclusion in the Welfare and Institutions Code, and the program's January 1, 2029 sunset date. These provisions were transferred to a separate bill (JR11).

A new Section 1 amending Public Contract Code Section 9204 was added, extending the public works claim resolution process indefinitely by removing the January 1, 2027 repeal date. The provision applies to contracts entered into on or after January 1, 2017 and covers all public entities except specified state departments (Water Resources, Transportation, Parks and Recreation, Corrections, Military, General Services, and High-Speed Rail Authority).

The bill's designation as a state-mandated local program changed from 'no' to 'yes,' reflecting that the indefinite extension of claim resolution duties imposes ongoing obligations on local agencies. A new Section 2 includes a statewide concern finding to ensure the provision applies to charter cities, and Section 3 provides for state mandates reimbursement if the Commission on State Mandates determines costs are mandated.

The amended Section 9204 requires public entities to conduct a reasonable review of contractor claims within 45 days and provide a written statement identifying disputed and undisputed portions. Undisputed amounts must be paid within 60 days of the written statement. If the claimant disputes the response, the public entity must schedule a meet-and-confer conference within 30 days, followed by nonbinding mediation for any remaining disputes, with costs shared equally.

Late payments bear interest at 7 percent per annum. Failure to respond within required timeframes results in the claim being deemed rejected in its entirety, though this does not constitute an adverse finding on the merits. A waiver of rights under the section is void and contrary to public policy, with limited exceptions for mutual agreement to skip mediation or for additional contractual dispute procedures that do not conflict with statutory timeframes.

Subcontractors and lower-tier subcontractors who lack privity of contract may request that the prime contractor present a claim on their behalf. The prime contractor must respond within 45 days confirming whether the claim was presented or providing reasons for not doing so.