BILL ANALYSIS �
AB 566
Page 1
ASSEMBLY THIRD READING
AB 566 (Wieckowski)
As Amended May 24, 2013
Majority vote
JUDICIARY 7-2 APPROPRIATIONS 12-5
-----------------------------------------------------------------
|Ayes:|Wieckowski, Alejo, Chau, |Ayes:|Gatto, Bocanegra, |
| |Dickinson, Garcia, | |Bradford, |
| |Muratsuchi, Stone | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Ammiano, Pan, Quirk, |
| | | |Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Maienschein |Nays:|Harkey, Bigelow, |
| | | |Donnelly, Linder, Wagner |
| | | | |
-----------------------------------------------------------------
SUMMARY : Requires a court to comply with specified requirements
before contracting out services currently, customarily or, as of
July 1, 2012, performed by that court's trial court employees.
Specifically, this bill :
1)Provides that if a trial court seeks to contract for services
currently, previously or customarily or, as of July 1, 2012,
performed by that court's trial court employees, all of the
following apply:
a) The contract may not be approved if, in light of the
services provided by the trial courts and the special
nature of the judicial function, it would be inconsistent
with the public interest to have the services performed by
a private entity.
b) The court clearly demonstrates that the contract will
result in actual, overall cost savings to the court,
considering specified factors, as provided.
c) The contract savings are not the result of lower
contractor pay rates or benefits, provided the contract is
eligible for approval if the contractor's wages are at the
industry standard and do not undercut trial court pay
AB 566
Page 2
rates.
d) The contract does not cause existing trial court
employees to lose employment, as provided.
e) The contract is awarded through a competitive bidding
process.
f) The contract provides for qualified staff, and the
contractor's hiring practicing are nondiscriminatory.
g) The contract allows for immediate termination by the
trial court, without penalty, for material breach.
h) For contracts over $100,000, requires the contract to i)
disclose specified information, ii) provide measurable
performance standards; and iii) require a performance audit
and a cost audit be done and considered prior to any
contract renewal.
i) The contract is limited to no more than five years.
2)Provides that the provisions in 1) above, do not apply to a) a
contract between a trial court and another trial court or a
local government entity for services to be performed by
employees of that trial court or local government entity; or
b) a contract for a new trial court function for which the
Legislature has specifically mandated or authorized the
performance of the services by independent contractors.
3)Does not preclude a trial court or the Judicial Council from
adopting more restrictive rules regarding contracting of court
services.
4)Provides that any contract entered into or extended between
the date the bill is enacted and the date it is effective that
does not comply with the requirements in 1) above, terminates
90 days after the date the bill becomes operative, unless the
contract terminates earlier.
5)Contains a severability clause.
EXISTING LAW :
AB 566
Page 3
1)Provides that employees of the state be appointed through the
civil service system.
2)Limits personal service contracts (contracting out) for work
done by state employees to when specified conditions are
satisfied, including:
a) The contracting state agency clearly demonstrates actual
overall savings.
b) The contract savings are not the result of lower
contractor pay rates or benefits, provided the contract is
eligible for approval if the contractor's wages are at the
industry standard and do not undercut existing pay rates.
c) The contract does not cause displacement of state civil
service employees.
d) The amount of the savings clearly justifies the
agreement.
e) The contract is awarded through a competitive bidding
process.
f) The potential for future economic risk for the state
from the contractor is minimal.
g) The potential economic advantage of contracting out is
not outweighed by the public's interest in having a
particular function performed directly by the state.
3)Permits contracting out of work done by state employees in
limited specified situations, including new state functions,
services that cannot be performed within civil service, and
emergency situations.
4)Prevents a school district or community college district from
contracting out services currently or customarily performed by
classified employees, unless conditions similar to those set
out in 2) above, are satisfied.
5)Prevents, until January 1, 2019, a city or library district
from withdrawing from a county free library system and
operating libraries with a private contractor, unless
AB 566
Page 4
conditions similar to 2) above, are satisfied.
6)Allows a county to contract out for "special services," as
provided.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, to the extent the bill limits courts from contracting
out for certain services, particularly where doing so could
result in greater operating efficiencies, the courts could incur
increased costs. The courts will also incur administrative
costs to demonstrate that a decision to contract out for
services is allowable under the bill's parameters, and to
provide the specified additional information and performance
audit for contracts exceeding $100,000. Offsetting a portion of
these costs will be savings in cases where decisions to continue
or resume performing functions with court employees is more cost
effective.
COMMENTS : Nearly all government entities in California are
restricted from contracting out functions customarily done by
public employees, unless specified conditions are satisfied.
These requirements are designed to ensure that not only is work
done cost-effectively, but that the public interest in
government activities remains paramount. As a general rule,
work performed for the state must be done by state employees
unless the proposed contract for personal services meets
specified criteria, including a clear demonstration of cost
savings. Schools and community college districts are also
required to comply with the same standards that apply to state
departments. Just two years ago, the Legislature passed, and
the Governor signed, almost identical provisions to limit the
privatization of public libraries in AB 438 (Williams), Chapter
611, Statutes of 2011. This bill, jointly sponsored by the
Service Employees International Union (SEIU) and the American
Federation of State, County and Municipal Employees (AFSCME),
seeks to extend these same due diligence protections to the
trial courts.
The author writes that this bill is necessary not only to ensure
that scarce court resources are used as effectively and
efficiently as possible, but also to protect the very integrity
of the court process: "AB 566 is consistent with the law today
for the state, school districts, community colleges, and our
libraries. This bill simply puts the trial courts on par with
AB 566
Page 5
other important government functions by ensuring that our tax
dollars are accountable and that the public's interest in fair
and judicious courts is considered before privatizing critical
court functions."
The due diligence requirements in this bill are very similar to
requirements today that apply to all state agencies, as well as
schools, community colleges and libraries. Like the courts,
these entities, with the exception of the libraries, receive the
bulk of their funding from and through the state.
Historically, trial courts in California were county entities,
funded by the counties, but in 1997, after significant problems
came to light with the county-based court funding model, the
Legislature passed the Lockyer-Isenberg Trial Court Funding Act,
AB 233 (Escutia and Pringle), Chapter 850, Statutes of 1997.
Under that bill, the state assumed responsibility for funding
the courts and helping ensure equal access to a quality judicial
system statewide. After the state took over funding, the courts
received significant funding increases and historically
underfunded courts saw greater increases. Unfortunately, the
recession forced significant reductions in state General Fund
support for the courts, but "one-time" fixes, backfills and new
revenues have, to date, spared the court system some of the
General Fund reductions.
Nevertheless the state's trial courts and their employees, and
all court users in the state, have been experiencing tragic
reductions in court services and basic access to justice. Trial
courts have been taking dramatic and painful steps to address
the budget cuts, including 1) closing courthouses and
courtrooms, some on selected days and others completely; 2)
laying off or furloughing employees; and 3) reducing services,
including substantial cuts to self-help and family law
facilitator assistance, and providing fewer court reporters and
court interpreters. While the Governor's Budget for 2013-14
does not propose any additional cuts to the trial courts, some
of the one-time fixes are set to expire. As a result, it is
anticipated that courts will be looking for additional ways to
reduce expenditures, unless there is a hoped-for needed infusion
of additional funds. Courts may therefore understandably be
tempted to consider contracting out important court functions in
an attempt to reduce expenses. If this is the case, it is
important to ensure that such contracting out will actually save
AB 566
Page 6
the courts money and continue to strongly protect the integrity
of the judicial system. According to the author, this bill
proposes to do exactly that.
The Placer Superior Court has reportedly gone so far as to lay
off all its court reporters and contract out all of their work
to private court reporters. The Placer Court states that the
contract will result in $600,000 in anticipated savings in the
2013-14 fiscal year. However, according to the sponsors, court
employees agreed to reduce their wages and benefits to the level
of the private contract and attain the $600,000 savings, but the
Placer Court nevertheless pursued the private contract even
though there were no longer savings. Moreover, the contract has
not increased either the number or type of cases for which court
reporters are present. Thus, court reporting in all cases in
Placer County, including juvenile court cases which are closed
to the public, will now be performed by a private, for-profit
company. This bill would help ensure that future contracts of
this sort not only actually save money for the courts, but also
are, most importantly, in the public's interest.
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
FN: 0000809