BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  AB 
          633
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2011-2012 Regular Session
                                 Bill Analysis


          AB 633  Author:  Olsen
          As Amended:  June 23, 2011
          Hearing Date:  June 28, 2011
          Consultant:  Paul Donahue


           SUBJECT  :  California State University; Acquisition of motor 
          vehicles 

           SUMMARY  :  Authorizes the California State University (CSU) 
          to acquire motor vehicles and surplus mobile equipment 
          without first having the Department of General Services 
          (DGS) investigate and establish the necessity for the 
          acquisition.

           Existing law  :       

          1) Specifies that no state agency purchase order for the 
          acquisition or replacement of motor vehicles shall be 
          issued until DGS has investigated and established that the 
          vehicle purchase is necessary. (Gov. Code § 13332.09)

          2) Prohibits a state agency, including DGS, from purchasing 
          new vehicles without the approval of the Department of 
          Finance (DOF) and the secretary or director of the agency 
          or department requesting the purchase.

          3) Authorizes CSU to enter into contracts with any public 
          or private entity for the furnishing of goods, services or 
          equipment.

          4) Defines "state agency" to include every state office, 
          officer, department, division, bureau, board, and 
          commission, and, effective July 1, 2012, would again 
          include each campus of the CSU within the definition. (Gov. 
          Code §§ 11000, 13332.09) 






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          5) Requires CSU, by June 30th of each year until July 1, 
          2012, to report to the Legislature on its motor vehicle 
          procurement, including the following: 

               a) An inventory of motor vehicles by campus and type

               b)   The number of vehicles purchased during the prior 
               fiscal year (FY), by campus and type; 

               c)   The average time taken to complete procurement of 
               each motor vehicle purchased during the prior FY; 

               d)   Any changes in policies or procedures made during 
               the prior FY relative to motor vehicle procurement and 
               contracts, and the identification of any vehicles 
               procured pursuant to the new policy or procedure; and, 


               e)   The estimated cost savings associated with 
               management by CSU of motor vehicle procurement, 
               including average time to complete procurements, 
               reduced administrative costs, reduced charges paid to 
               DGS, and competitive or reduced market prices obtained 
               for vehicles. 

           This bill  :

          1) Effective July 1, 2012, eliminates each campus of the 
          California State University from the definition of a "state 
          agency," thus authorizing CSU to manage and approve its own 
          acquisitions of motor vehicles and mobile equipment.

          2) Provides that the Trustees of the CSU shall, to the 
          greatest extent feasible, purchase vehicles using statewide 
          commodity contracts.

          3) Directs the CSU to report to the Legislature on or 
          before June 30 of each year through June 30, 2017, on their 
          motor vehicle procurement, including the following:

               a) An inventory, by campus, of motor vehicles that 
               includes the type of vehicle, consistent with the 
               fleet asset management system reports (maintained by 
               DGS).

               b) The number of motor vehicles purchase during the 





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               prior year, disaggregated by campus and type of 
               vehicle, if the passenger vehicle or truck was 
               purchased through statewide commodity contracts, and 
               the purchase price.

           COMMENTS  :
          
          1)  Purpose of the bill  :  According to the author's office, 
          in 2004, SB 1757 (Denham) inadvertently included CSU under 
          a new and duplicative process for purchasing vehicles.  For 
          several years, this legislation cost CSU over $240,000 per 
          year to support the DGS Fleet Management Program despite 
          the fact that CSU is less than two percent of DGS's total 
          purchases statewide.  

          The author also notes that AB 262 (Coto) of 2007 suspended 
          provisions related to DGS approval of vehicle purchasing 
          and required the CSU Board of Trustees to report annually 
          to the Legislature until June 30, 2012, certain information 
          regarding motor vehicle procurement.  

          The author states that these reports show how CSU was able 
          to procure their vehicles in a more timely and cost-saving 
          manner, and that this bill will allow CSU to continue to 
          procure vehicles cost effectively under its long standing 
          Education Code authority.

          2)  Background  :  In 1994, the Legislature passed AB 1191 
          (Aguiar), which authorized the CSU to (1) lease any real 
          property for use by CSU, and (2) procure goods and 
          services, including telecommunications goods and services, 
          without going through the State Department of General 
          Services approval process.

          In 2004, however, the Legislature passed SB 1757 (Denham), 
          which specifies that CSU must receive approval from DGS 
          before acquiring motor vehicles or general use mobile 
          equipment.<1>  In response to this enactment, CSU sponsored 
          AB 262 (Coto) in 2007, which suspended temporarily the 
          requirement that DGS approve motor vehicle purchases made 
          by CSU, instead requiring that CSU prepare an annual report 
          -------------------------
          <1> Gov. Code § 13332.09 (f) additionally states that the 
          "University of California is requested and encouraged to 
          have the ÝDGS] perform the tasks identified in this section 
          with respect to the acquisition or replacement of motor 
          vehicles by the University of California."





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          to the Legislature on its motor vehicle inventory, 
          purchases, estimated cost savings, and the like.  On July 
          1, 2012, the reporting requirement expires, and DGS would 
          also resume its oversight and approval of CSU motor vehicle 
          purchases.  

          3)  Recent amendments to AB 633  :  As amended on June 23, 
          2011, AB 633 would exempt CSU from DGS oversight and 
          approval of CSU motor vehicle purchasing.  It would require 
          only that CSU continue to report to the Legislature on its 
          motor vehicle purchases.  The reporting requirement would 
          expire on June 30, 2017. 

          The policy question raised by the bill is whether the 
          Legislature considers it appropriate or desirable for DGS 
          to resume oversight of CSU motor vehicle purchases.  

          4)  Gubernatorial Executive Orders on fleet-related issues  :  
          Executive Order S-14-09, issued in July 2009, prohibits all 
          state agencies and departments from ordering or purchasing 
          new vehicles for non-emergency use.  The Director of DGS 
          could still approve a purchase, subject to review by the 
          Consumer Services Agency Secretary, but only when the 
          purchase was necessary to protect public health and safety, 
          provide critical services and functions, utilize federal 
          stimulus funding, or achieve cost savings.

          On January 27, 2011, Governor Brown issued Executive Order 
          B-2-11, which requires agencies and departments to review 
          home-storage permits and fleet usage and submit a plan to 
          DGS to withdraw vehicles that are non-essential or 
          cost-ineffective to be later sold.  Like its predecessor, 
          EO B-2-11 also prohibits the purchase of non-emergency 
          vehicles, unless the vehicle is essential for health and 
          safety purposes or realizes cost savings.  

          5)  Related legislation  :

          AB 2031 (Evans), Stats. 2010, ch. 247 prohibits a state 
          agency or department, including DGS, from purchasing new 
          vehicles without the approval of the Department of Finance 
          and the secretary or director of the agency or department 
          requesting the purchase.

          AB 262 (Coto) Stats. 2007, ch. 679 requires CSU to purchase 
          cars through DGS and be subject to DGS oversight as part of 





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          the state fleet by redefining "state agency" to include 
          each campus of the CSU for vehicle purchases, starting in 
          2012. AB 262 also deleted mandatory annual fleet reporting 
          requirements from CSU to DGS.

          AB 236 (Lieu) Stats. 2007, ch. 593 changed state policies 
          regarding the purchase of vehicles for state vehicle fleets 
          in order to increase fuel efficiency and the use of 
          alternative fuels, and expanded the nature and extent of 
          information  on which DGS is required to report to the 
          Governor and the Legislature.

          SB 1757 (Denham) Stats. 2004, ch. 926 establishes 
          requirements for CSU for the acquisition of motor vehicles 
          under the supervision of DGS, and encouraged the University 
          of California to follow these requirements. 

          AB 1191 (Aguiar) Stats. 1994, ch. 1097 authorized the CSU 
          Board of Trustees to lease any real property for use by 
          CSU, and procure goods and services, including 
          telecommunications goods and services, without going 
          through the DGS approval process.
          
          SUPPORT:   

          California State University (source)

           OPPOSE:   

          None on file

           FISCAL COMMITTEE:   Senate Appropriations Committee



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