BILL ANALYSIS                                                                                                                                                                                                    


          |SENATE RULES COMMITTEE            |                  SB 1419|
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                              UNFINISHED BUSINESS

          Bill No:  SB 1419
          Author:   Alarcon (D)
          Amended:  8/23/02
          Vote:     21

          AYES:  Alarcon, Figueroa, Kuehl, Polanco, Romero
          NOES:  Margett, McClintock, Oller

           SENATE EDUCATION COMMITTEE  :  7-2, 5/1/02
          AYES:  Vasconcellos, Alarcon, Alpert, Chesbro, Karnette,  
            O'Connell, Ortiz
          NOES:  McPherson, Knight

           SENATE EDUCATION COMMITTEE  :  8-1, 5/21/02
          AYES:  Vasconcellos, Alarcon, Alpert, Chesbro, Karnette,  
            O'Connell, Ortiz, Sher
          NOES: Knight

           SENATE APPROPRIATIONS COMMITTEE  :  7-3, 6/3/02
          AYES:  Alpert, Bowen, Escutia, Karnette, Murray, Perata,  
          NOES:  Johnson, McPherson, Poochigian

           SENATE FLOOR :  22-15, 6/10/02
          AYES:  Alarcon, Alpert, Bowen, Burton, Chesbro, Dunn,  
            Escutia, Figueroa, Karnette, Kuehl, Machado, Murray,  
            O'Connell, Ortiz, Peace, Perata, Romero, Sher, Soto,  
            Speier, Torlakson, Vasconcellos
          NOES:  Ackerman, Battin, Brulte, Costa, Haynes,  
            Johannessen, Johnson, Knight, Margett, McClintock,  
            McPherson, Monteith, Morrow, Oller, Poochigian


                                                               SB 1419

           ASSEMBLY FLOOR  :  47-29, 8/26/02 - See last page for vote

           SUBJECT  :    Personal services contracting

           SOURCE  :     Author

           DIGEST  :    This bill establishes standards for the use of  
          personal service contracts in California school districts  
          and community college districts.

           Assembly Amendments  make clarifying changes and state  
          legislative intent that districts use cost information that  
          is readily available, as specified.  
           ANALYSIS  :    Current law does not specifically restrict the  
          use of personal service contracts by governing boards of  
          California school and community college districts.

          For state services, current law provides standards for the  
          use of personal service contracts with specific criteria  
          for contracting outside state service.  These criteria  
          include demonstration of cost savings, definition of costs,  
          and requirements that work not be contracted out solely on  
          the basis of lower pay rates or benefits, and justification  
          of savings based on the size and duration of the contract.

          The State Public Employment Relations Board (PERB) is a  
          quasi-judicial agency which oversees public sector  
          collective bargaining in California.  PERB administers four  
          collective bargaining statutes, ensures their consistent  
          implementation and application, and adjudicates disputes  
          between the parties subject to them.  The statutes  
          administered by PERB include the Educational Employment  
          Relations Act (EERA) of 1976, which established collective  
          bargaining in California's public schools (K-12) and  
          community colleges.

          This bill establishes standards for the use of personal  
          service contracts in school districts and community college  
          districts and:


                                                               SB 1419

          1.Restricts personal services contracting for the purpose  
            of achieving cost savings, permitting so only if the  
            following conditions are met:

             A.    Actual cost savings be demonstration, to be  
                determined through the inclusion and exclusion of  
                specific costs, as specified.

             B.    The proposed contractor's wages are at the  
                industry's level, and do not undercut school district  
                pay rates.

             C.    The contract does not result in displacement, as  
                defined, of school district employees.

            E.   Various additional requirements.

          2.Restricts personal services contracting, unless the  
            following conditions are met:

             A.    The Legislature mandates or authorizes work be  
                performed by independent contractors, and the  
                contract is for new school district functions.

             B.    Services are unavailable or unable to be  
                satisfactorily performed by district employees.

             C.    Services which are incidental to a purchase or  
                lease contract.

             D.    The policy, administrative, or legal  
                goals/purposes cannot be accomplished through the  
                regular or ordinary hiring process.

             E.    The nature of the work is such that criteria for  
                an emergency appointment applies, i.e. necessary to  
                prevent the stoppage of public business or because of  
                the limited duration of the work.

             F.    The district cannot feasibly supply the equipment,  
                materials, facilities, or support services provided.

             G.    The contract is for services of an urgent,  
                temporary, or occasional nature.


                                                               SB 1419

          3.Restricts application of the bill's provisions to new  
            contracts initiated after January 1, 2003.  Existing  
            contracts or renewals of existing contracts are exempted,  
            unless substantially modified.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          Unknown, major costs ongoing.

           SUPPORT  :   (Verified  6/4/02) (Unable to reverify at time  
          of writing)

          California School Employees Association
          American Federation of State, County and Municipal  

           OPPOSITION  :    (Verified  6/4/02) (Unable to reverify at  
          time of writing)

          American Institute of Architects, California Council
          Association of California School Administrators
          California School Board's Association
          California School Bus Contractor's Association 
          Cardinal Transportation Group, Inc.
          Community College League of California
          Durham School Services
          First Student
          Laidlaw Education Services
          Los Angeles Unified School District
          Orinda Union School District
          San Francisco Unified School District

           ARGUMENTS IN SUPPORT  :    Supporters contend that this bill  
          does not prohibit personal service contracts, but rather  
          merely mirrors the guidelines and requirements that every  
          state agency in California must currently follow when  
          entering into personal service contracts.  Supporters  
          assert that there have been many cases of school districts  
          contracting out jobs and services, only to find that the  
          contracts ended up costing more and delivering less.

           ARGUMENTS IN OPPOSITION  :    Opponents assert that the bill  


                                                               SB 1419

          creates significant costs and administrative burdens by  
          creating added state mandates that include the cost for the  
          process of bidding and the requirement to hire someone if  
          unable to contract out for services.  Opponents  
          additionally contend that PERB has ruled that EERA's  
          mandatory subjects of bargaining include the employer's  
          decision to contract out work.  

           ASSEMBLY FLOOR  : 
          AYES:  Alquist, Aroner, Calderon, Canciamilla, Cardenas,  
            Cedillo, Chan, Chavez, Chu, Cohn, Corbett, Correa, Diaz,  
            Dutra, Firebaugh, Florez, Frommer, Goldberg, Havice,  
            Hertzberg, Horton, Jackson, Keeley, Kehoe, Koretz, Liu,  
            Longville, Lowenthal, Migden, Nakano, Nation, Negrete  
            McLeod, Papan, Pavley, Reyes, Salinas, Shelley, Simitian,  
            Steinberg, Strom-Martin, Thomson, Vargas, Washington,  
            Wayne, Wiggins, Wright, Wesson
          NOES:  Aanestad, Ashburn, Bates, Bogh, Briggs, Bill  
            Campbell, John Campbell, Cogdill, Cox, Daucher,  
            Dickerson, Harman, Hollingsworth, Kelley, La Suer, Leach,  
            Leonard, Leslie, Maddox, Maldonado, Mountjoy, Robert  
            Pacheco, Rod Pacheco, Richman, Runner, Strickland,  
            Wyland, Wyman, Zettel

          NC:cm  8/27/02   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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