BILL ANALYSIS
AB 2391
Page 1
ASSEMBLY THIRD READING
AB 2391 (Koretz)
As Amended May 20, 2004
Majority vote
PUBLIC EMPLOYEES 8-1 APPROPRIATIONS 16-5
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|Ayes:|Negrete McLeod, Levine, |Ayes:|Chu, Berg, Calderon, |
| |Chan, Correa, Kehoe, | |Corbett, Correa, |
| |Laird, Maldonado, | |Firebaugh, Goldberg, |
| |Nakanishi | |Leno, Nation, Negrete |
| | | |McLeod, Oropeza, Pavley, |
| | | |Ridley-Thomas, Wesson, |
| | | |Wiggins, Yee |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Campbell |Nays:|Runner, Bates, Daucher, |
| | | |Haynes, Keene |
| | | | |
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SUMMARY : Prohibits a state agency from contracting for legal
services if the hourly rate of compensation for these services
equals more than 250% the hourly rate billed to state agencies
by State Bargaining Unit 2.
EXISTING LAW authorizes a state agency to contract for private
legal services if, among other circumstances, the Attorney
General's office has a conflict of interest that prevents the
office from representing the agency.
FISCAL EFFECT : Potential savings if certain state agencies
[e.g., California Public Employees Retirement System (CalPERS)]
are required to terminate contracts with law firms that exceed
the limitation required by this bill.
COMMENTS : CalPERS has requested an exemption to this bill so
that it may maintain contracts with law firms that they believe
provide specialized investment services.
This bill is sponsored by the California Attorneys,
Administrative Law Judges, Hearing Officers and Deputy Labor
Commissioners in State Employment (CASE). CASE represents
employees represented in State Employee Bargaining Unit 2.
According to CASE, Article VII, Section 1 of the California
AB 2391
Page 2
Constitution contains the state's civil service provisions.
These provisions have been interpreted by the California Supreme
Court as including an implied mandate limiting the state's
authority to contract with private entities to perform services
the state has historically or customarily performed.
In fact, as recently as 1997, the California Supreme Court
reaffirmed its prior recognition of the "civil service mandate"
in Article VII of the California Constitution, and the fact that
it, "forbids private contract for work that the state itself can
perform 'adequately and competently." ( Professional Engineers
v. Department of Transportation (1997) 15 Cal. 4th 543, 547.)
Despite this, the state has spent large amounts of money
contracting out legal services to private firms. Currently,
many state agencies contract out for legal services while the
state continues to lay off employees because of the fiscal
crisis. With the budget deficit only growing, the state can no
longer afford to contract out for legal services and spend
millions of dollars on work that can be performed by current
state employees.
In recent years, the increased use of outside counsel by state
agencies has become an issue of great concern for CASE and its
members, particularly at a time when the state is proposing
laying off bargaining unit members.
This bill would address the problem by prohibiting a state
agency from contracting out if the hourly rate of compensation
equals more than 250% the hourly rate billed to state agencies
by the State Bargaining Unit 2. In these fiscal times the state
can no longer afford the luxury of spending millions of dollars
for work that can and should be performed by members of
Bargaining Unit 2.
Analysis Prepared by : Clem Meredith / P.E., R. & S.S. / (916)
319-3957
FN: 0005776