BILL ANALYSIS                                                                                                                                                                                                    



                                                                     SB 682  


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          Date of Hearing:  July 8, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 682  
          (Leno) - As Amended June 24, 2015


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          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:










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          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.








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             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  








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            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  








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            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