BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 682|
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VETO
Bill No: SB 682
Author: Leno (D), et al.
Amended: 8/31/15
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
SENATE FLOOR: 24-14, 6/2/15
AYES: Allen, Beall, Block, De León, Galgiani, Hall, Hancock,
Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leno, Leyva,
Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Pavley,
Wieckowski, Wolk
NOES: Anderson, Bates, Berryhill, Fuller, Gaines, Glazer,
Huff, Moorlach, Morrell, Nguyen, Nielsen, Roth, Runner, Vidak
NO VOTE RECORDED: Cannella, Stone
SENATE FLOOR: 25-15, 9/3/15
AYES: Allen, Beall, Block, De León, Galgiani, Hall, Hancock,
Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leno, Leyva,
Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Pavley, Roth,
Wieckowski, Wolk
NOES: Anderson, Bates, Berryhill, Cannella, Fuller, Gaines,
Glazer, Huff, Moorlach, Morrell, Nguyen, Nielsen, Runner,
Stone, Vidak
ASSEMBLY FLOOR: 51-28, 9/2/15 - See last page for vote
SUBJECT: Courts
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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:
Existing law:
1)Permits a state agency to contract out for personal services
only if specified standards are satisfied, including, among
other things:
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;
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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.
1)Exempts personal services contracting from the above
requirements under specified circumstances, including, among
other things, where:
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
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;
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
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be performed;
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.
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 generally authorizes a
trial court to contract for such services to achieve cost
savings in that trial court if all of the following conditions
are met:
The trial court clearly demonstrates that the proposed
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
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 cost
fluctuations that could normally be expected during the
contracting period;
The amount of savings clearly justifies the size and
duration of the contracting agreement;
The contract is awarded through a publicized,
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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;
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;
and
The contract shall comply with any additional
requirements imposed by the Judicial Branch Contracting
Manual, as specified.
1)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 government entity for services to be performed
by employees of the other trial court or employees of the
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
the court's trial court employees;
The services are incidental to a contract for the
purchase or lease of real or personal property;
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The legislative, administrative, or legal goals and
purposes cannot be accomplished through the utilization of
trial court employees for specified reasons. These
contracts shall include, but not be limited to, obtaining
expert witnesses in litigation;
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, 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;
The contract is for the services of any court
interpreter, which shall be governed by specified laws, and
any memorandum of understanding or agreement entered into
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pursuant to those acts, as specified; or
The contract is for services provided to a court by a
traffic assistance program, as specified.
1)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;
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
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courts. The first bill, AB 566 (Wieckowski, 2013) was
ultimately vetoed by the Governor, and the second bill, AB 2332
(Wieckowski, 2014) died on the Senate Appropriations Committee's
Suspense File. 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.
Comments
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 [ . . . ] 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 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
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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 Assembly Appropriations Committee:
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
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.
SUPPORT: (Verified10/20/15)
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)
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Service Employees International Union (co-source)
Alliance of California Judges
California Court Reporters Association
California Labor Federation
California Professional Firefighters
Center for Judicial Excellence
Glendale City Employees Association
Orange County Employees Association
Organization of SMUD Employees
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Luis Obispo County Employees Association
OPPOSITION: (Verified10/20/15)
California Chamber of Commerce
Judicial Council
Los Angeles Superior Court
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
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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."
ARGUMENTS IN OPPOSITION: Judicial Council takes an "oppose
unless amended" position, writing that this bill would severely
hamper the trial courts' ability to contract for personal
services. Judicial Council writes 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;
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
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
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users. [ . . . ]"
GOVERNOR'S VETO MESSAGE:
I am returning Senate Bill 682 without my signature.
This bill requires trial courts to meet specified standards
when entering into personal service contracts, and provide
an analysis of all such contracts, to the Legislature.
I agree with the author that decisions to change the way
court services are provided should be carefully evaluated
to ensure they are both fair and cost-effective. However,
this measure goes too far. It requires California's courts
to meet overly detailed and in some cases nearly impossible
requirements when entering into or renewing certain
contracts. Other provisions are unclear and will lead to
confusion about what services may or may not be subject to
this measure.
The courts, like many of our governmental agencies, are
under tremendous funding pressure and face the challenge of
doing their work at a lower cost. I am unwilling to
restrict the flexibility of our courts, as specified in
this bill, as they face these challenges.
ASSEMBLY FLOOR: 51-28, 9/2/15
AYES: Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,
Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,
Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Roger Hernández, Holden,
Irwin, Jones-Sawyer, Lopez, Low, McCarty, Medina, Mullin,
Nazarian, O'Donnell, Olsen, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Weber, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper,
Jones, Kim, Lackey, Levine, Linder, Maienschein, Mathis,
Mayes, Melendez, Obernolte, Patterson, Steinorth, Wagner,
Waldron, Wilk
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NO VOTE RECORDED: Gray
Prepared by:Ronak Daylami / JUD. / (916) 651-4113
11/4/15 14:01:16
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