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