BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 906
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          Date of Hearing:   April 24, 2013

            ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL  
                                      SECURITY
                                  Rob Bonta, Chair
                      AB 906 (Pan) - As Amended:  April 18, 2013
           
          SUBJECT  :   Personal services contracts: independent contractors.

           SUMMARY  :   Prohibits the term of a personal services contract  
          from exceeding two years, as specified, and requires  
          notification of the affected state employee organizations when a  
          contract is proposed to be renewed or extended.  Employee  
          organization may request to meet and confer over the issue prior  
          to the extension or renewal.   

           EXISTING LAW :

          1)Requires, based on provisions in the California Constitution,  
            that services provided by state agencies generally be  
            performed by state civil service employees.    

          2)Requires that proposals for contracting must, at a minimum,  
            meet the following criteria: 

             a)   Contracts must result in cost savings to the state. 
             b)   Contractors' wages are at the industry's level and do  
               not significantly under-cut state pay rates. 
             c)   Contracts cannot cause the displacement of civil service  
               employees.
             d)   Contracts cannot adversely affect the state's  
               affirmative action efforts.
             e)   Contract savings must be large enough to ensure that the  
               savings will not be eliminated by cost fluctuations that  
               could normally be expected during the contract period
             f)   Contract savings clearly justify the size and duration  
               of the contract
             g)   The contract is awarded through a publicized,  
               competitive bidding procedure
             h)   The contract includes specific provisions pertaining to  
               the qualifications of the staff who will perform the work.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   According to the author, "Under existing law, state  








                                                                  AB 906
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          agencies and departments are undermining the Legislature's  
          appropriation authority and the state civil service system by  
          abusing their ability to enter into personal services contracts.  
           The Department of General Services charged with reviewing and  
          approving state departments' requests to contract out personal  
          services.  Unfortunately, DGS is failing to thoroughly review  
          request to ensure the request makes good business sense and the  
          cost is reasonable."

          "According to the Assembly Budget Subcommittee 4 Agenda for its  
          February 21, 2012 hearing, the state currently has over 14,000  
          personal service contracts worth $11.8 billion.  These  
          expenditures occur with no substantive legislative oversight."

          The author concludes that AB 906 is a first step in ensuring  
          that state agencies and departments are working in conjunction  
          with the Legislature to build and maintain a strong civil  
          service system, as envisioned in the State Constitution.

          The Committee is informed that the author will be offering  
          amendments in Committee that delete the provision that requires  
          notification of the affected state employee organizations when a  
          contract is proposed to be renewed or extended and allows the  
          employee organization to request to meet and confer over the  
          issue.  It was the author's intent that this provision be  
          deleted in the April 18, 2013 amendments to the bill but it was  
          inadvertently retained.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Federation of State, County and Municipal Employees  
          (Sponsor)
          American Federation of State, County, and Municipal Employees  
          Local 2620

           Opposition 
           
          Brea Chamber of Commerce (letter dated 4/11/13)
          California Chamber of Commerce (letter dated 4/22/13)
          Natoma Technologies, Inc. (letter dated 4/12/13)
          Technology Association of America (letter dated 4/18/13)
           
          Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916)  








                                                                  AB 906
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          319-3957