BILL NUMBER: AB 740	CHAPTERED
	BILL TEXT

	CHAPTER  684
	FILED WITH SECRETARY OF STATE  OCTOBER 9, 2011
	APPROVED BY GOVERNOR  OCTOBER 9, 2011
	PASSED THE SENATE  SEPTEMBER 1, 2011
	PASSED THE ASSEMBLY  MAY 19, 2011

INTRODUCED BY   Assembly Member Blumenfield

                        FEBRUARY 17, 2011

   An act to add Section 19135 to the Government Code, relating to
personal services contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 740, Blumenfield. Personal services contracts.
   Existing law authorizes state agencies to use personal services
contracts if specified standards are satisfied, including, among
other things, the contract does not cause the displacement of civil
service employees and the contract is awarded through a publicized,
competitive bidding process. The State Personnel Board is required to
review a proposed contract upon the request of an employee
organization for compliance with those standards.
   This bill would require a state agency to immediately discontinue
a contract disapproved by action of the board or its delegate unless
ordered otherwise by the board or its delegate. The bill would
prohibit the state agency from circumventing or disregarding the
board's action by entering into another contract for the same or
similar services or to continue the services that were the subject of
the contract that was disapproved. The bill would require the state
agency to serve notice of the discontinuation of the contract to the
vendor within 15 days from the board's final action, and to serve a
copy of the notice on the board and the employee organization that
filed the contract challenge. The bill would provide that failure to
serve this notice may be grounds for rejection of future contracts
for the same or similar services. The bill would make a related
statement of legislative findings.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Article 4 (commencing with Section 19130) of Chapter 5 of Part
2 of Division 5 of Title 2 of the Government Code specifies the
conditions under which state agencies may contract for services
rather than use civil servants to perform specified work and the
procedures for reviewing and amending contracts for that permissive
contracting.
   (b) A union challenging the appropriateness of a personal services
contract with the State Personnel Board must provide adequate
evidence to support its challenge, and state agencies are given the
opportunity to demonstrate how the contract meets one or more of the
conditions permitted under Article 4 (commencing with Section 19130)
of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government
Code.
   (c) The Legislature recognizes that the State Personnel Board is
best able to determine the appropriateness of whether a state agency
or department may contract for services, and the conditions for
amending or continuing the contract for permissive services.
   (d) In a September 2009 report, the State Auditor found "faults in
the State's oversight of the California Constitution's implied civil
service mandate. In particular, the State Personnel Board] currently
has no mechanism for determining whether state agencies are
complying with its decisions." The State Auditor concluded that
departments experienced no repercussions for failing to terminate
contracts disapproved by the board.
   (e) The State Auditor recommended that the State Personnel Board
specify that contracts disapproved by the board must be terminated
and require state agencies to provide documentation to the board and
the applicable unions to demonstrate to the satisfaction of the board
the termination of these contracts. The recommended changes would
provide clarity to departments about the results of the State
Personnel Board decisions.
   (f) Implementing the recommendation of the State Auditor regarding
contracts reviewed by the State Personnel Board would provide
greater governmental accountability and transparency without reducing
the ability of state agencies to enter or continue valid contracts.
  SEC. 2.  Section 19135 is added to the Government Code, to read:
   19135.  (a) If a contract is disapproved by action of the board or
its delegate, a state agency shall immediately discontinue that
contract unless ordered otherwise by the board or its delegate. The
state agency shall not circumvent or disregard the board's action by
entering into another contract for the same or similar services or to
continue the services that were the subject of the contract
disapproved by the board or its delegate.
   (b) A state agency ordered to discontinue a contract shall serve
notice of the discontinuation of the contract to the vendor within 15
days from the board's final action unless a different notice period
is specified. A copy of the notice also shall be served on the board
and the employee organization that filed the contract challenge.
Failure to serve this notice may be grounds for rejection of future
contracts for the same or similar services that were discontinued.