BILL ANALYSIS Ó AB 1669 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1669 (Roger Hernández) As Amended June 27, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |52-26 |(May 5, 2016) |SENATE: |22-13 |(August 16, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: L. & E. SUMMARY: Extends an existing bid preference for public transit contractors who agree to retain employees to also include contracts for the collection and transportation of solid waste, as specified. The Senate amendments: 1)Provide that this bill shall not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017. 2)Provide that this bill shall only apply to service contracts for the collection and transportation of solid waste when an awarding agency decides to let an exclusive solid waste collection and transportation contract out to bid. AB 1669 Page 2 3)Provide that this bill is not intended to determine whether or not a local agency should procure a service contract by inviting bids, extend an existing service contract, renegotiate its service contract with the prior contractor, or exercise any other right it possesses pursuant to specified existing law to determine aspects of solid waste handling that are of local concern. 4)Provide that this bill does not modify, limit, or abrogate in any manner any franchise, contract, license, or permit granted or extended by a city, county, or other local government agency before January 1, 2017. EXISTING LAW: 1)Requires all bidders on public transit service contracts to advise the awarding authority whether they will retain the employees of the prior contractor/subcontractor. 2)Requires awarding authorities who put out a bid for public transit service to provide a 10% bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days. 3)Requires existing contractors to provide awarding authorities with specified employee information, which will assist bidding contractors/subcontractors in costing their bids. 4)Exempts contractors/subcontractors from retaining employees for "cause," as defined. 5)Authorizes the new contractor/subcontractor to pay alternate AB 1669 Page 3 wages and provide alternate benefits from those of the prior contractor/subcontractor. 6)Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification. 7)Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court. 8)Provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs. 9)Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor. 10)Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority. 11)Also provides for employment retention protection for employees of janitorial and building maintenance contractors, as specified. FISCAL EFFECT: According to the Senate Appropriations Committee, this bill could result in a General Fund state reimbursable mandate on local government, the magnitude of which is unknown, but potentially in the low hundreds of thousands of dollars annually. AB 1669 Page 4 COMMENTS: Existing law already establishes a 10% bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by SB 158 (Alarcón), Chapter 103, Statues of 2003. This bill would extend those requirements to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste. This bill is sponsored by the California Teamsters Public Affairs Council. The sponsor states that this bill is intended to prevent keeping workers from being displaced when a city's contract for solid waste services changes companies. They argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced. The sponsor contends that this bill rewards companies who retain existing solid waste service employees for 90 days after the new contract takes effect with a 10% bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job. Opponents argue that, while well-intentioned, the type of bid preference created by this bill is nonessential to the service being delivered. There are many other considerations for contracting with a waste hauler in order to provide maximum benefit, such as rates, ability to service a community, and the ability to meet state diversion requirements. Opponents argue that there are already significant limitations for what local governments can and cannot contract. This bill simply adds another unnecessary layer of bureaucratic red tape at the expense of scare taxpayer resources. AB 1669 Page 5 Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0004008