BILL ANALYSIS Ó
Bill No: AB
2508
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Staff Analysis
AB 2508 Author: Bonilla
As Amended: May 25, 2012
Hearing Date: June 26, 2012
Consultant: Paul Donahue
SUBJECT
Public contracts: Public health agencies
DESCRIPTION
Prohibits a state agency from contracting for call center
services unless the contractor certifies that the contract
will be performed solely with workers employed in
California. Specifically, this bill :
1)Prohibits any state agency authorized to enter into
contracts for public benefit programs from contracting
for associated call center services unless the contractor
certifies under penalty of perjury in the bid for the
contract that the contract, or any subcontract under that
contract, will be performed solely with workers employed
in California.
2)Terminates a contract for noncompliance when a contractor
uses out-of-state workers and requires the contractor to
pay a penalty to the state agency in an amount equal to
the percentage of work performed by out-of-state workers.
3)Exempts a state agency from in-state work requirements
for specified call centers if the Governor waives those
requirements during a state of emergency.
4)Does not apply to:
AB 2508 (Bonilla) continued
Page 2
a) Contracts that are not awarded to contractors who
solely use in-state workers if the contract would
violate the terms of the Agreement on Government
Procurement of the World Trade Organization or any
other bilateral or regional free trade agreement to
which the State of California has consented;
b) Existing contracts, except those that will be
renewed upon expiration; or
c) Contracts entered into between a state agency and a
health care service plan, a specialized health care
service plan regulated by the Department of Managed
Health Care or a disability insurer or specialized
health insurer regulated by the Department of
Insurance, or to the contractors and subcontractors of
those plans or insurers contracting with a state
agency.
5)Defines "call center" to mean a building, facility, or
operation where customer or client services or assistance
is provided by telephone, fax, e-mail, text, or Web-based
interaction.
6)Defines "public benefit programs" to mean California Work
Opportunity and Responsibility to Kids (CalWORKS),
CalFRESH, Medi-Cal, Healthy Families, and the California
Healthcare Eligibility, Enrollment, and Retention System.
EXISTING LAW
Existing law requires a state agency to comply with
specified procedures in awarding agency contracts.
BACKGROUND
According to the author's office, "both the Schwarzenegger
and the Davis administrations approved two separate vendor
contracts, for the CalFRESH food stamp programs, that
subcontracted with out-of country call centers. Currently,
one of the call centers is located in Juarez, Mexico, where
workers there provide assistance to Californians who
receive CalWORKs or CalFRESH benefits. Approximately four
million Californians are currently receiving CalFRESH
benefits as a result of the ongoing recession and the
AB 2508 (Bonilla) continued
Page 3
increase in unemployment and underemployment."
Major CHHS programs include income support for CalWORKs
recipients, low-cost public health insurance (Healthy
Families) for children from working families, Medi-Cal, and
CalFRESH.
PRIOR/RELATED LEGISLATION
AB 1829 (Liu) 2003-2004 Session . Would have prohibited
state and local agencies from using state funds to contract
for services unless the contractor can certify that the
work will be performed within the United States. (Vetoed)
SUPPORT:
American Federation of State, County and Municipal
Employees, AFL-CIO
California Community Colleges CalWORKS Association
California Labor Federation
California School Employees Association
Health Access California
Jericho
Service Employees International Union Local 1000
UC Berkeley Labor Center
Western Center on Law and Poverty
OPPOSE:
None on file
DUAL REFERRAL: Senate Public Safety Committee
FISCAL COMMITTEE: Senate Appropriations Committee
**********
AB 2508 (Bonilla) continued
Page 4