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