BILL ANALYSIS Ó SB 682 Page 1 Date of Hearing: July 8, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 682 (Leno) - As Amended June 24, 2015 ----------------------------------------------------------------- |Policy |Judiciary |Vote:|7 - 3 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill places conditions on trial courts' use of contracts for personal services. Specifically, this bill: SB 682 Page 2 1)Allows a trial court to enter into a contract for services currently or customarily performed by that trial court's employees if all of the following conditions are met: a) Demonstration that actual contract savings, in comparison as specified, with the court's costs of providing the same services. b) The contract shall not be approved solely because of savings from lower contractor pay rates or benefits. c) The contract shall not cause loss of an existing employee's job, seniority, a reduction in wages or benefits, or an involuntary transfer. d) The savings will be large enough to ensure they will not be eliminated by normally expected private sector and trial court fluctuations. e) The savings clearly justifies the size and duration of the contract, and the potential for economic risk to the trial court is minimal. f) The contract shall be awarded through a competitive bidding process, and will include provisions regarding qualifications of those performing the work. g) The economic advantage of contracting out is not outweighed by the public interest in having a particular function performed directly by the trial court. 2)States that contracting is also permissible under any of the following conditions: a) For a new trial court function for which the Legislature has mandated or authorized use of contractors. b) For contracts between trial courts or between a trial court and another government agency, with the contracted services being provided by employees of the other trial court or government agency. c) For contracts where the services required are highly specialized or require technical expertise outside the courts' capabilities. d) For services that are incidental to a lease of real or personal property. SB 682 Page 3 e) For contracts required due to potential conflicts of interest regarding trial court employees. f) Contracting is due to an emergency and necessary to protect public health and safety. g) Contracts involving training courses not requiring permanent instructor positions. h) Equipment, materials, facilities, or services provided under the contract could not feasibly by provided by the trial court in the location where the services would be performed. i) For services of an urgent nature where the process for hiring court employees would frustrate the purpose of the contract. This exception does not apply to court reporters, except on a pro tempore basis. j) Developed pursuant to rehabilitation programs under the Welfare and Institutions Code. aa) For court interpreter services that are consistent with existing law for such contracts. 3)Requires every trial court, by February 1, 2016, to report specified information to the Legislature and the Department of Finance regarding contracts for services that were provided or are customarily provided by trial court employees and were entered into, renewed or extended between July 1, 2015, and December 31, 2015, with a term extending beyond March 31, 2016. FISCAL EFFECT: 1)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 and to renew or extend SB 682 Page 4 existing contracts. (Based on a survey of the courts, the Judicial Council estimates increased costs of $25 million to hire employees for work currently performed by contract staff.) 2)Offsetting a portion of the above costs will be savings in cases where the decision to continue or resume performing functions with court employees is more cost effective. 3)Unknown, significant loss of future savings, potentially in the millions of dollars (General Fund) annually, to the extent this bill restricts the ability of courts to transition to technology-based services for existing court services. COMMENTS: 1)Purpose. Most government entities in California are restricted from contracting out functions that are customarily done by public employees, unless certain conditions are satisfied. These requirements are designed to ensure not only that work is done cost-effectively, but also that the public interest in government activities remains paramount. As a general rule, work performed for the state must be done by state employees, unless the proposed contract for personal services meets specified criteria, including a clear demonstration of cost savings. Schools, community college districts and public libraries are also required to comply with generally the same standards that apply to the state. SB 682, co-sponsored by the American Federation of State, County, and Municipal Employees (AFSCME), Laborers' Local 777 and 792, the Orange County Employees Association, and the Service Employees International Union (SEIU), extends these same contracting requirements to the courts. The bill generally follows the requirements for contracting by state SB 682 Page 5 agencies, as delineated in Government Code Section 19130. 2)Opposition. The Judicial Council argues that the bill: 1) is too prescriptive and will make it impossible to contract out for services; 2) has language applying to services "currently or customarily" performed by trial court employees that is vague and could impact existing contracts when they come up for renewal or extension; 3) inhibits a court's ability to manage its staff and resources; 4) reduces local control; 5) conflicts with the Judicial Branch Contracting Manual; and 6) affects circumstances that are more appropriately addressed through collective bargaining at the local level. 3)Prior Legislation. Last year a similar bill, AB 2332 (Wieckowski), was held on Suspense in Senate Appropriations. In 2013, AB 566 (Wieckowski), also a similar bill, was vetoed by the Governor, who opined that the bill contained unclear provisions and required courts to meet overly detailed requirements, particularly in light of the courts' funding constraints. Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081