BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 232
                                                                  Page  1

          Date of Hearing:   August 14, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                SB 232 (Monning) - As Introduced:  February 11, 2013 

          Policy Committee:                             Labor and  
          Employment   Vote:                            5-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill extends an existing local government agency 10% bid  
          preference on public transit projects to all public transit  
          contracts awarded by the State of California.  The current bid  
          preference is provided to those entities that agree to retain  
          the employees of the prior contractor or subcontractor.    

           FISCAL EFFECT  

          Potential increased special fund costs to the Department of  
          Parks and Recreation (DPR), of $220,000 annually, or $2.2  
          million over the duration of a 10-year contract.

          Generally, the state does not contract with public transit  
          contractors.  DPR, however, does contract for public transit  
          services at the Hearst San Simeon State Historical Monument  
          (Hearst Castle) and has since at least 1983.  According to DPR,  
          the current contract is approximately $22 million over 10 years  
          (July 31, 2012 to August 31, 2023).  

           COMMENTS  

           1)Purpose  .  Current law [SB 158, Chapter 103, Statues of 2003]  
            requires an awarding authority for a public transit contract  
            to give a 10% preference to any bidder who agrees to retain  
            the employees of prior contractor or subcontractor.  Statute  
            defines awarding authority as any local government agency  
            (e.g., city, county, special district, etc.).  

            According to the author, "One of the conditions for Governor  
            Davis signing SB 158 into law was that the provisions exclude  








                                                                  SB 232
                                                                  Page  2

            the state as one of the government entities defined as  
            awarding authorities affected by the new law.  SB 232 would  
            eliminate this exception."

            According to the California Teamsters Public Affairs Council,  
            sponsor of this bill, "This bill arose from an incident that  
            occurred at Hearst Castle when the Department of Parks and  
            Recreation received bids for transit services and the lowest  
            bidder steadfastly refused to offer employment to qualified  
            incumbent drivers.  Many of these [drivers] had decades of  
            service with the prior contractor and become unemployed and  
            lost their benefits."  According to DPR, prior to the new  
            transit contract in 2012, the prior transit service provider  
            had held this contract for over 20 years.

           2)Existing law  , SB 158, Chapter 103, Statues of 2003, requires a  
            bidder on a public transit contract to declare whether or not  
            his or she will retain the employees of the prior contractor  
            or subcontractor for a period of not less than 90 days.   
            Statute further requires a successor contractor or  
            subcontractor for public transit services to 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.

           Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916)  
          319-2081