BILL ANALYSIS Ó SB 599 Page 1 Date of Hearing: July 8, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 599 (Mendoza) - As Introduced February 27, 2015 ----------------------------------------------------------------- |Policy |Labor and Employment |Vote:|5 - 2 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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 Page 2 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 Page 3 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