BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 334 (Gomez) - State Contracts
Amended: As Introduced Policy Vote: PE&R 3-2
Urgency: No Mandate: No
Hearing Date: June 24, 2013
Consultant: Maureen Ortiz
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 334 provides an independent basis for the
State Personnel Board (SPB) to disapprove a contract for the
employment of outside counsel if a state agency fails to provide
a copy of the contract to Bargaining Unit 2 (CASE).
Fiscal Impact:
Unknown costs to SPB (General)
The SPB could incur unknown costs to the extent that CASE files
an increased number of challenges with the board if state
agencies do not comply with the notice requirement. However,
since state agencies are already required to provide
notification of outside legal services contracts to CASE, and
since CASE is already authorized to challenge any outside
contract for legal services, it is not anticipated that this
bill will result in an increase in those challenges.
Background: Existing law requires, with certain exceptions, the
consent of the Attorney General prior to the employment of
outside counsel for representation of any state agency or
employee in a judicial proceeding. Additionally, state agencies
must provide written notice to State Bargaining Unit 2 when
seeking approval from the Attorney General to employ outside
legal counsel. The notice must include a copy of the complaint
or other pleadings, justification for the contract, nature of
the legal services, estimated hourly wage to be paid under the
contract, estimated length of the contract, and identity of the
person or party entering into the contract. Contracts for
expert witnesses or consultations in connection with a
confidential investigation or to any confidential component of a
AB 334 (Gomez)
Page 1
pending or active legal action are exempt from the notice
requirement.
Existing law further requires a state agency, when submitting a
contract for outside counsel to the Department of General
Services (DGS) in connection with state contracting
requirements, to also submit a copy of the contract to the BU 2
designated representative, and authorizes SPB to review personal
service contracts to ensure that civil service rules are being
followed.
In 2012, CASE challenged the contract for outside legal counsel
entered into by the Department of Corrections and Rehabilitation
(CDCR) on the basis that the legal services could have been
provided by state attorneys AND on the basis that the department
did not notify CASE when first submitting the contract for
approval as required under current law. While ultimately the
SPB did find that CDCR had failed to demonstrate that the
contracted services could not be performed satisfactorily by
civil service employees, the board also ruled that it could not
use the fact that the department had failed to notify CASE as a
basis for disapproving the contract since that authorization is
not provided in the Government Code.
Proposed Law: AB 334 provides that the failure of a state
agency to provide a copy of a contract for the employment of
outside counsel to the designated representative of State
Bargaining Unit 2, California Attorney's, Administrative Law
Judges and Hearing Officers in State Employment (CASE) when it
provides a copy to the Department of General Services is an
independent basis for the State Personnel Board (SPB) to
disapprove the contract.
Staff Comments: AB 334 provides that failure to provide a copy
of the contract to CASE is an independent basis for SPB to
disapprove the contract, however, it is not clear whether that
will be interpreted to mean that the board must disapprove the
contract or merely can exercise its own discretion.
CASE represents approximately 3,500 legal professionals employed
in more than 90 different state departments, boards, agencies
and commissions. Although current law does require state
agencies to notify CASE when they contract for outside legal
AB 334 (Gomez)
Page 2
services, there are no repercussions if they do not provide that
notification.
AB 334 will provide an incentive for departments and agencies to
follow through with their existing notice obligations, and will
also provide SPB with a remedy in those cases where state
agencies do not provide the required notice to CASE.