BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 682|
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THIRD READING
Bill No: SB 682
Author: Leno (D)
Amended: 5/5/15
Vote: 21
SENATE JUDICIARY COMMITTEE: 5-1, 4/28/15
AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski
NOES: Anderson
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SUBJECT: Courts
SOURCE: American Federation of State, County and Municipal
Employees, AFL-CIO
Laborers' Locals 777 and 792
Orange County Employees Association
Service Employees International Union
DIGEST: This bill requires a trial court to meet certain
standards if it intends to enter into a contract for any
services that are currently or have been customarily performed
by that trial court's employees, except as specified.
ANALYSIS:
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Existing law:
1)Permits a state agency to contract out for personal services
only if specified standards are satisfied, such as:
The agency clearly demonstrates actual overall cost
savings, as specified;
Proposals to contract out are not approved solely on the
basis that savings will result from lower contractor pay
rates or benefits, except that proposals to contract out
work are eligible for approval if the contractor's wages
are at the industry's level and do not significantly
undercut state pay rates;
The contract does not displace civil service employees,
as specified;
The savings are large enough to ensure they will not be
eliminated by cost fluctuations that could normally be
expected during the contracting period;
The amount of savings clearly justify the size and
duration of the agreement;
The contract is awarded through a publicized,
competitive bidding process;
The potential economic advantage of contracting is not
outweighed by the public's interest in having a particular
function performed directly by state government.
(Government Code Section 19130)
1)Exempts personal services contracting from the above
requirements if:
The functions contracted are exempt from civil service
under the state constitution;
The contract is for a new state function and the
Legislature has specifically mandated or authorized the
performance of the work by independent contractors;
The services contracted are not available within civil
service, cannot be performed satisfactorily by civil
service employees, or are of such a highly specialized or
technical nature that the necessary expert knowledge,
experience, and ability are not available through the civil
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service system;
The services are incidental to a contract for the
purchase or lease of real or personal property;
The legislative, administrative, or legal goals and
purposes cannot be accomplished through the utilization of
persons selected pursuant to the regular civil service
system, as specified;
The nature of the work is such that specified existing
law standards for emergency appointments apply;
State agencies need private counsel because a conflict
of interest on the part of the Attorney General's office
prevents it from representing the agency without
compromising its position, as specified;
The contractor will provide equipment, materials,
facilities, or support services that the state could not
feasibly provide in the location where the services are to
be performed;
The contractor will conduct training courses for which
appropriately qualified civil service instructors are not
available, provided that permanent instructor positions in
academies or similar settings shall be filled through civil
service appointment; or
The services are of such an urgent, temporary, or
occasional nature that the delay incumbent in their
implementation under civil service would frustrate their
very purpose. (Government Code Section 19130)
This bill:
1)Provides that the purpose of its provisions is to establish standards
when a trial court intends to enter into a contract for any
services that are currently or have been customarily performed
by that trial court's employees and authorizes trial courts to
contract for such services if all of the following conditions
are met:
The trial court clearly demonstrates that the contract
will result in actual overall cost savings to the trial
court, as specified;
The contract shall not be approved solely on the basis
that savings will result from lower contractor pay rates or
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benefits, except contracts shall be eligible for approval
if the contractor's wages are at the industry level and do
not significantly undercut trial court pay rates;
The contract does not displace trial court employees, as
specified;
The savings are large enough to ensure they will not be
eliminated by private sector and trial court fluctuations
that could normally be expected during the contracting
period;
The amount of savings clearly justify the size and
duration of the contracting agreement;
The contract is awarded through a publicized,
competitive bidding process;
The contract includes specific provisions pertaining to
the qualifications of the staff that will perform the work
under the contract, and assurance that the contractor's
hiring practices meet applicable nondiscrimination
standards;
The potential for future economic risk to the trial
court from potential contractor rate increases is minimal;
The contract is with a "firm," as defined; and
The potential economic advantage of contracting out is
not outweighed by the public's interest in having a
particular function performed directly by the trial court.
1)Provides that these provisions do not preclude a trial court or
Judicial Council from adopting more restrictive rules
regarding the contracting of court services.
2)Exempts contracts from the above requirements if:
The contract is for a new trial court function and the
Legislature has specifically mandated or authorized the
performance of the work by independent contractors;
The contract is between a trial court and another trial
court or a local government entity for services to be
performed by employees of the other trial court or
employees of the local government entity;
The services contracted for cannot be satisfactorily
performed by trial court employees, or are of such a highly
specialized or technical nature that the necessary expert
knowledge, experience, and ability cannot be obtained from
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the court's trial court employees;
The services are incidental to a contract for the
purchase or lease of real or personal property. Such
contracts, known as "service agreements," shall include,
but not be limited to, agreements to service or maintain
office equipment or computers that are leased or rented.
Service agreements do not include contracts to operate
equipment or computers for purposes other than service or
maintenance;
The legislative, administrative, or legal goals and
purposes cannot be accomplished through the utilization of
trial court employees because of the need to protect
against a conflict of interest or to ensure independent and
unbiased findings in situations where there is a clear need
for an independent, outside perspective;
Due to an emergency, a contract is necessary for the
immediate preservation of the public health, welfare, or
safety;
The contractor will conduct training courses for which
appropriately qualified trial court employee instructors
are not available from the court, provided that permanent
instructor positions shall be filled through the process
for hiring trial court employees;
The contractor will provide equipment, materials,
facilities, or support services that could not feasibly be
provided by the trial court in the location where the
services are to be performed, except as specified;
The services are of such an urgent, temporary, or
occasional nature that the delay incumbent in their
implementation through the process for hiring trial court
employees would frustrate their very purpose, except as
specified;
The contract is a personal services contract developed
pursuant to rehabilitation programs, as specified, or
pursuant to a program vendored or contracted through a
regional center or the Statement Department of
Developmental Services in accordance with the Lanterman
Developmental Disabilities Services Act, as specified, and
the contract will not cause an existing trial court
employee to incur a loss of his or her employment or
employment seniority, a reduction in wages, benefits, or
hours; or an involuntary transfer to a new location
requiring a change in residence; or
The contract is for the services of any court
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interpreter, which shall be governed by the Trial Court
Interpreter Employment and Labor Relations Act or by the
other provisions of the Trial Court Employment Protection
and Governance Act, and any memorandum of understanding or
agreement entered into pursuant to those acts, as
specified.
1)Specifies that if a trial court entered into, or renewed or extended, a
contract between July 1, 2015, and December 31, 2015,
inclusive, for services that were provided or are customarily
provided by its trial court employees and that contract has a
term extending beyond March 31, 2016, the trial court must
provide a specified report by no later than February 1, 2016.
2)Includes a severability clause.
Background
Under California law, most governmental entities can use
personal services contracts (i.e. contracting out) to achieve
cost savings only if specified standards are satisfied, chief
among them being that the entity clearly demonstrates actual
overall cost savings based upon certain information. These
entities include executive branch agencies, public schools,
community colleges, and libraries.
In recent years, California's judicial branch has experienced
catastrophic budget reductions that have crippled California's
court system by, among other things, forcing the closure of
courts and self-help centers, which has resulted in delayed
access to justice for a large number of Californians. In
response, many courts have begun seeking ways in which to
operationalize those budget reductions. According to
information provided to this Committee by the Judicial Council
of California, examples of services that trial courts currently
contract out for include: court reporters; interpreters; child
custody evaluations; probate investigations; family law
facilitators; minor's counsel in dependency cases; child custody
mediation services; mediators/alternative dispute resolution;
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security guards; personnel services; payroll; information
services; collections; adoption investigation services; services
for self-represented litigants; labor negotiation services;
transcripts for electronically recorded proceedings; and more.
Over the last two years, bills have been introduced in an effort
to impose various contracting out standards upon the trial
courts. The first bill, AB 566 (Wieckowski, 2013) was
ultimately vetoed by the Governor, and the second bill, AB 2332
(Wieckowski, 2014) passed this Committee but died on the
Suspense File in the Senate Appropriations Committee.
This bill similarly seeks to impose certain standards upon
courts when entering into contracts for services currently or
customarily performed by the trial court's employees, largely
based upon standards imposed on state agencies.
Comment
As stated by the author:
The major government entities in California either face
explicit limits (cities and counties) on privatization of
public services or must meet due diligence requirements
(State, community colleges, K-12 school districts, libraries)
prior to privatizing their services.
Historically, trial courts in California were county entities,
funded by the [c]ounties and thus subject to the privatization
restrictions that applied to [c]ounties. But in 1997, the
Legislature passed the Lockyer-Isenberg Trial Court Funding
Act, AB 233 (Escutia and Pringle), Ch. 850, Stats. 1997[,] and
shifted the responsibility for funding from the [c]ounties to
the State. Subsequently, many of the laws that had previously
applied to the trial courts no longer applied once they were
removed from the [c]ounties' jurisdictions, such as open
meetings, access to public records, whistleblower protections,
public contract code requirements for contracting purposes and
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provisions relating to privatization.
As a result of recent budget cuts to the trial courts, some
courts have sought alternative ways to provide critically
important services to the public, including privatizing some
of the most sensitive services that help preserve the
integrity of our impartial trial court system. Alternatives
being considered include privatizing the handling and
maintenance of private, confidential and sensitive information
contained in official court records.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Potentially significant loss of future cost savings in
the millions of dollars (General Fund*) per year to the
extent the provisions of this measure restrict the ability
of courts to transition to the use of technology-based
services for existing court services.
Unknown, significant costs potentially in the millions
of dollars (General Fund*) to the extent the standards
established in this bill limit the courts' ability to
negotiate contracts for services prospectively, including
contracts with non-local governmental agencies.
*Trial Court Trust Fund
SUPPORT: (Verified5/29/15)
American Federation of State, County and Municipal Employees,
AFL-CIO (co-source)
Laborers' Locals 777 and 792 (co-source)
Orange County Employees Association (co-source)
Service Employees International Union (co-source)
California Professional Firefighters
Center for Judicial Excellence
Glendale City Employees Association
Orange County Employees Association
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Organization of SMUD Employees
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Luis Obispo County Employees Association
OPPOSITION: (Verified5/29/15)
California Chamber of Commerce
Judicial Council
Ventura County Superior Court, Presiding Judge
ARGUMENTS IN SUPPORT: The Service Employees International
Union (SEIU), co-sponsor of this bill, writes that "SB 682 would
ensure that trial courts operate within the norms of good
government practices by requiring them to show diligence prior
to privatizing important trial court services." SEIU argues:
[T]ax dollars have the dual responsibility of being well spent
for quality services, as well as being an investment in the
larger society. In fact, it could be argued that the level of
accountability should be higher for trial court services.
Being a nation of laws, a fair and impartial judicial system
is a critical underpinning of democracy and is fundamental to
the success of a civilized society. Trial court services
represent a "public good," which are most effectively
delivered by government and public employees. [ . . . ]
SEIU also asserts that SB 682's provisions "are neither radical
nor a departure from current law governing most other parts of
government and will ensure that tax dollars are accountable. In
a time of budget austerity it is even more important to ensure
that scarce judicial dollars are well spent. Every misspent
dollar is a dollar taken away from a taxpayers' ability to
access much needed court services."
The California Labor Federation writes in support:
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When entities contract out, oftentimes there are sacrifices
made in the pursuit of cost savings. Outsourcing can result
in less accountability, public access, and transparency. Such
practices can lead to substantially reduced wages, [thereby]
increasing demand for taxpayer funded public assistance.
Public interest becomes secondary to profit maximization when
for-profit corporations are responsible for delivery of public
services. [Whereas] California requires due diligence
standards be satisfied in all sectors of government prior to
privatization of public services [. . .] trial courts are
exempt from even this minimum standard, which applies to other
public entities. Privatization of court services means that
justice truly is in the hands of private contractors whose
primary concern is profits for shareholders over fairness to
the public. For these reasons, it is essential to have
safeguards in the law protecting the public interests.
ARGUMENTS IN OPPOSITION: Judicial Council opposes this bill
because it would severely hamper the trial courts' ability to
contract for personal services. Judicial Council bases its
opposition on several grounds, including that the bill:
presumes no personal services contract is valid unless it
meets one of several very limited exceptions or has achieved
the impossible balance of attaining actual savings without
reducing labor and benefit costs;
applies to any services "currently or customarily" performed
by trial court employees which is not only "overly broad, it's
also vague and retroactive;"
inhibits the trial courts' ability to manage their staff and
resources, which is critical in view of substantial budget
cuts in recent years and an ongoing funding gap of more than
$600 million;
reduces local control and discretion over trial court
management;
conflicts with recent legislation regarding judicial branch
contracting; and
affects circumstances that are more appropriately addressed at
the local level through collective bargaining agreements.
Judicial Council further argues that while this bill appears to
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be modeled upon the Government Code section limiting contracting
in the executive branch for services that could be performed by
civil service employees, that "model is inappropriate for trial
courts because . . . the trial courts must operate independently
from one jurisdiction to the next." Additionally, unlike
executive branch agencies that "can manage the amount of work
they receive, the number and types of people they serve, and the
services provided . . . trial courts must accept all filings
form the public, have no control over the number and types of
cases they must process, and have no ability to limit court
users. In order to effectively manage their caseloads, courts
need flexibility in managing their costs and contracts."
The California Chamber of Commerce (Cal Chamber) writes in
opposition that a functioning judicial system is important for
all members of the public, including business, and that this
bill does not help the courts' current funding situation, which
has resulted in closed courthouses, reduced hours of service,
and reduced number of employees. Cal Chamber argues that "the
judicial branch is in the best position to determine how to
balance the needs of the public with their existing budget,
including whether private contractors are necessary."
Prepared by:Ronak Daylami / JUD. / (916) 651-4113
5/31/15 12:40:14
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