BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 599  


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          Date of Hearing:  July 8, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 599  
          (Mendoza) - As Introduced February 27, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill extends a ten percent bid preference for bidders on  
          public transit contracts who agree to retain the employees of  
          the prior contractor of subcontractor to all public transit  
          contracts awarded by the State of California.








                                                                     SB 599  


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          FISCAL EFFECT:


          Costs from this measure are unknown, but potentially  
          significant, to the extent state contracts are awarded to other  
          than the lowest bidder due to the preference.  The only transit  
          contract currently awarded by the state appears to be the  
          transit operation at Hearst San Simeon State Historical Monument  
          (Hearst Castle). Hearst Castle's current transit contract is  
          valued at roughly $22 million and is up for renewal in 2023. For  
          illustration, assuming the subsequent contract is for the same  
          amount and duration, the 10% bid preference could lead to  
          increased costs to the Department of Parks and Recreation of  
          $2.2 million, or an average of $220,000 annually (special  
          funds).

          COMMENTS:

          1)Purpose. Existing law requires a local government agency to  
            give a 10% preference to any bidder on a service contract to  
            provide public transit service if they agree to retain  
            employees of the prior contractor or subcontractor for not  
            less than 90 days.  This law does not currently apply to state  
            contracts. Supporters of the bill, including California  
            Teamsters Public Affairs Council, believe this law should be  
            extended to state transit contracts and cite an incident at  
            Hearst Castle where the lowest bidder terminated the  
            employment of existing drivers as an example of the need for  
            this bid preference.

          2)Prior legislation.
          
             a)   SB 263 (Monning) of 2014 is identical to this bill.  SB  
               263 was held on the Suspense file in this committee.

             b)   SB 232 (Monning) of 2013, as introduced, is identical to  
               this bill. SB 232 was subsequently amended to address  








                                                                     SB 599  


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               issues related to the California Central Coast State  
               Veterans Cemetery at Fort Ord Endowment Fund.

             c)   SB 158 (Alarcon), Chapter 103, Statutes of 2003 created  
               the 10% bid preference for contracted transit services for  
               local government agencies.



          Analysis Prepared by:Misty Feusahrens / APPR. / (916)  
          319-2081