BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 906|
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THIRD READING
Bill No: AB 906
Author: Pan (D)
Amended: 9/11/13 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 3-1, 8/19/13
AYES: Beall, Block, Yee
NOES: Walters
NO VOTE RECORDED: Gaines
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 7-0, 8/20/13
AYES: Wright, Cannella, De León, Galgiani, Hernandez, Lieu,
Padilla
NO VOTE RECORDED: Berryhill, Calderon, Correa, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 49-27, 5/29/13 - See last page for vote
SUBJECT : Personal services contracts: independent
contractors
SOURCE : Author
DIGEST : This bill amends the Civil Service Act to prohibit
the execution of those proposed personal services contracts
until the state agency proposing to execute the contract
permissible under specified conditions, without regard to cost
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savings, has notified all organizations that represent state
employees who perform the type of work to be contracted. This
bill requires the Department of General Services (DGS) to
establish a process to certify that notification.
Senate Floor Amendments of 9/6/13 remove a two-year contracting-
out limitation and make additional narrowing and clarifying
amendments; delete a provision in this bill that prohibited
state personal services contracts with terms in excess of two
years; delete a provision that added an additional limitation on
the circumstances under which a state agency can contract out
for personal services; specify that the state agency entering
into the contract is responsible for notifying organizations
representing state employees of the proposed contract, not the
SPB as in existing law; and add a provision stating that unless
a personal services contract is necessary due to a sudden and
unexpected occurrence that poses a clear and imminent danger, or
other specified circumstances, the contract shall not be
executed until the state agency certifies that all relevant
labor organizations have been notified of the impending
contract.
ANALYSIS :
Existing law:
1. Establishes in the California Constitution a system of civil
service employment for state government. The civil service
includes every officer and employee of the state except as
otherwise provided in the Constitution.
2. Restricts, but does not prohibit, private contracting by
public agencies. Public agencies are authorized to engage in
private contracting in various instances, including:
A. When the "nature of the services" is such that the
services cannot be adequately rendered by an existing
agency of the public entity.
B. If the state seeks to contract for private assistance
to perform "new functions" not previously undertaken by
the state or covered by an existing department.
C. When the state, under specified conditions contracts
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with private contractors to achieve cost savings.
D. When the nature of the work is such that the
Government Code standards for emergency appointments
apply.
E. When the services are of such urgent, temporary, or
occasional nature that the delay incumbent in their
implementation under civil service would frustrate their
very purpose.
3. Requires a state agency proposing to enter into a personal
services contract with a private contractor to notify the
SPB, which contacts employee organizations and allow a
reasonable opportunity for comment on the proposed contract.
4. Authorizes an employee organization, within 10 days of
receiving notice of a proposed contract, to request that SPB
review the contract for compliance with the statutory
standards.
5. Authorizes public agencies to contract out for architectural
and engineering services on public works projects.
6. Requires state agency personal service contracts to be with a
"firm" defined as a corporation, partnership, nonprofit
organization, or sole proprietorship, but which does not
include limited liability companies (LLCs).
This bill:
1. Prohibits, unless a personal services contract, as defined,
is necessary due to a sudden and unexpected occurrence that
poses a clear and imminent danger, requiring immediate action
to prevent or mitigate the loss or impairment of life,
health, property, or essential public services, the contract
from being executed until the state agency proposing to
execute the contract has notified all organizations that
represent state employees who perform the type of work to be
contracted.
2. Requires the notice, at a minimum, to include a full copy of
the proposed contract. Permits the notifying agency to
redact specific confidential or proprietary information from
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the notice.
3. Requires DGS to establish a process to certify the
notification.
4. Specifies that the notification and certification of notice
requirements do not change the requirements for contracts
under Section 11045 or require an additional notification.
Prior/Related Legislation
SB 252 (Vargas, 2011-2012 Session) would have required the DGS
to compile and publish reports detailing all "privatization
contracts" let by state agencies. Furthermore, the bill
specifies that all contracts and related subcontracts are public
documents subject California Public Records Act. This bill died
in the Assembly Public Employees, Retirement, and Social
Security Committee.
AB 740 (Blumenfield, Chapter 685, Statutes of 2011) provides
that if the SPB disapproves a state agency's contract for
personal services, the agency shall immediately discontinue the
contract unless otherwise ordered by the SPB. It prohibits the
state agency from circumventing or disregarding the SPB's action
by entering into another contract for the same services, for
similar services, or to continue the services provided under the
disapproved contract.
AB 2494 (Blumenfield, 2009-2010 Session) would have specified
that if the SPB disapproves a state agency's contract for
personal services, the agency shall immediately discontinue the
contract unless otherwise ordered by the SPB. This bill was
vetoed by Governor Schwarzenegger.
AB 756 (Eng, 2009-2010 Session) would have required every state
agency to provide a link to a centrally located and accessible
state-run Internet Web site that includes a listing of personal
services and consulting services contracts that it entered into
during the previous fiscal year. This bill was vetoed by
Governor Schwarzenegger.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Senate Appropriations Committee, SPB indicates
annual costs of $359,568 for 3 staff attorney positions
(General).
SUPPORT : (Verified 9/9/13)
American Federation of State, County and Municipal Employees
California Attorneys, Administrative Law Judges & Hearing
Officers
in State Employment
California Correctional Peace Officers Association
Professional Engineers in California Government
Service Employees International Union, Local 1000
Union of American Physicians and Dentists
OPPOSITION : (Verified 9/9/13)
American Council of Engineering Companies
California Chamber of Commerce
California Disability Services Association
ARGUMENTS IN SUPPORT : Supporters state that a broad variety
of studies and analyses have found that the state could save
hundreds of millions annually by utilizing civil service
employees instead of unnecessary and wasteful privatization
contracts. Proponents say that currently, there is very little
oversight of the magnitude of outsourcing performed by the
hundreds of state departments, boards and commissions, and that
these contracts are often unnecessary in any event.
Supporters also cite a 2009 study conducted by the SEUI Local
1000, which found that the state could save about $350 million
annually by utilizing state employees instead of private
contractors. Sponsors state that this bill will "provide the
increased transparency and oversight needed for those savings to
be realized."
ARGUMENTS IN OPPOSITION : The California Disability Services
Association is in opposition "?.unless and until AB 906 is
amended to honor the previous commitment to exempt contracts
which offer employment opportunities for persons with
developmental disabilities."
ASSEMBLY FLOOR : 49-27, 5/29/13
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AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall,
Roger Hernández, Jones-Sawyer, Lowenthal, Medina, Mitchell,
Mullin, Nazarian, Pan, Perea, V. Manuel Pérez, Quirk, Rendon,
Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams,
Yamada, John A. Pérez
NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle,
Donnelly, Fox, Beth Gaines, Gorell, Grove, Hagman, Harkey,
Jones, Levine, Logue, Maienschein, Mansoor, Melendez, Morrell,
Nestande, Olsen, Patterson, Quirk-Silva, Wagner, Waldron, Wilk
NO VOTE RECORDED: Holden, Linder, Muratsuchi, Vacancy
JL:d 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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