BILL ANALYSIS Ó
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THIRD READING
Bill No: SB 232
Author: Monning (D)
Amended: As introduced
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-1, 4/10/13
AYES: Lieu, Leno, Padilla, Yee
NOES: Wyland
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : Private employment: public transit employees
SOURCE : California Teamsters Public Affairs Council
DIGEST : This bill expands existing law that requires a local
government agency to give a 10% preference to any bidder on a
service contract to provide public transit services who agrees
to retain employees of the prior contractor or subcontractor for
a period of not less than 90 days. This bill expands these
provisions in existing law to require a "state" agency to be
included as an awarding authority.
ANALYSIS :
Existing law:
1.Requires that when a public entity puts out to bid a public
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service contract on public transit services, the bidder must
state as part of the bid for a service contract whether or not
he/she will retain the employees of the prior contractor or
subcontractor for a period of not less than 90 days.
2.Requires that an awarding authority letting a service contract
out to bid for public transit services shall give a 10%
preference to any bidder who agrees to retain the employees of
the prior contractor or subcontractor.
3.Requires successor contractor or subcontractor for public
transit services who agrees to retain employees must retain
employees who have been employed by the prior contractor or
subcontractors, except for reasonable and substantiated cause,
which includes the particular employee's performance or
conduct while working under the prior contract, as well as or
the employee's failure of any controlled substances and
alcohol test.
4.Requires successor contractor or subcontractor for public
transit services shall make a written offer of employment to
each employee to be rehired. That offer shall state the time
within which the employee must accept that offer, which may
not be less than 10 days, and does not need to be at the same
level of wages or benefits as provided by the previous
contractor or subcontractor.
5.Provides that if the successor contractor or subcontractor for
public transit services determines that fewer employees are
required than were required under the prior contract or
subcontract, the successor contractor must retain qualified
employees by seniority within the job classification. The
successor contractor is permitted to consider licensing
requirements when judging seniority.
6.Provides that an employee who was not offered employment or
who has been discharged in violation of this chapter, or
his/her agent, may bring an action against the successor
contractor or subcontractor in any superior court having
jurisdiction over the successor contractor or subcontractor.
Upon finding a violation of this, the court must order
reinstatement to employment with the successor contractor or
subcontractor and award backpay, including the value of
benefits, for each day of violation, as well as reasonable
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attorney fees.
7.Provides that, upon its own motion or upon the request of any
member of the public, an awarding authority may terminate any
service contract if both of the following occur:
A. The contractor or subcontractor has substantially
breached the contract.
B. The awarding authority holds a public hearing within
30 days of the receipt of the request or its announcement
of its intention to terminate.
A contractor or subcontractor terminated as described above must
be ineligible to bid on or be awarded a service contract or
subcontract with that awarding authority for a period of not
less than one year and not more than three years, to be
determined by the awarding authority.
This bill expands existing law that requires a local government
agency to give a 10% preference to any bidder on a service
contract to provide public transit services who agrees to retain
employees of the prior contractor or subcontractor for a period
of not less than 90 days. This bill expands these provisions in
existing law to require a "state" agency to be included as an
awarding authority.
Prior Legislation
SB 158 (Alarcon, Statutes of 2003, Chapter 103) created the bid
preference for contracted transit services for public agencies.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, costs from
this bill are unknown, but potentially significant, to the
extent that state contracts are awarded to other than the lowest
bidder due to the preference. The state contracts out for
relatively few transit services compared to local agencies.
Based on currently-available information, the provisions of this
bill appear only to affect the transit operation at Hearst San
Simeon State Historical Monument (Hearst Castle). Hearst
Castle's current transit contract is valued at roughly $22
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million over 10 years, and is up for renewal in eight years.
Assuming the subsequent contract is for the same amount and
duration, the 10% bid preferential could lead to an increased
costs to the Department of Parks and Recreation of $2.2 million,
or an average of $220,000 annually (special funds).
SUPPORT : (Verified 5/24/13)
California Teamsters Public Affairs Council (source)
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Labor Federated
ARGUMENTS IN SUPPORT : The author's office notes that the
current 10% bid preference for transit contracts applies to all
public entities, except to the State of California. The
author's office believes that this oversight deserves to be
revisited. The author's office notes that this oversight has
already led to the lowest bidder of the transit services at
Hearst Castle terminating the employment of the existing
drivers, leading to their unemployment and loss of benefits.
Proponents argue that the existing bid preference, which impacts
public agencies that contract out for transit services, has a
nearly ten year history of success on the local level.
Proponents note that the law does not protect the wages or
benefits of services, allowing those who seek the contract to
bid the service at any price, but frequently all bidders decide
to hire all of the incumbent employees in order to compete with
the other bidders on a level playing field. Proponents believe
that this bid preference should be extended to state transit
contracts, and they cite the loss of employment and benefits by
drivers formally employed at the Hearst Castle when the transit
services were contracted out.
PQ:nd 5/24/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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