BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 149 (Lara)
Hearing Date: 8/15/2011 Amended: 6/21/2011
Consultant: Maureen Ortiz Policy Vote: PE&R 3-2
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BILL SUMMARY: AB 149 authorizes a state department or agency,
when the State Personnel Board (SPB) either disapproves a
personal services contract from being executed, or nullifies an
executed personal services contract, to create and fill a
limited-term civil service position for the equivalent number of
hours for each contractor position requested in the submitted
contract.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Limited-term positions ---unknown, potentially
several hundred
thousand dollars------ Spec/Gen
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense file.
This bill could result in increased costs to state agencies
which would have to use unallocated salaries and wages to fund
positions in excess of those which were originally budgeted, and
potentially resulting in reduced salary savings that are
currently reverted to the General Fund and other funds. While
AB 149 authorizes departments to hire limited term employees
"for the equivalent number of hours for each contractor position
requested in the submitted contract", the bill does not address
specific salaries, benefits, and overhead costs that may be
incurred by the department.
The State Civil Service Act establishes standards for the use of
personal services contracts. It requires any state agency
proposing to execute a contract to notify the State Personnel
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Board (SPB). The SPB then must notify all organizations that
represent state employees who perform the type of work to be
contracted so they may be given a reasonable opportunity to
comment on the proposed contract. The State Personnel Board, at
the request of an employee organization that represents state
employees, must review the adequacy of any proposed or executed
contract.
AB 149 provides that if the State Personnel Board either
disapproves a proposed contract prior to execution or
disapproves an executed contract on the basis of that review,
the department or agency submitting the contract may appoint a
limited term employee for the equivalent number of hours for
each contractor position requested in the submitted contract.
Essentially, this bill will allow departments to hire limited
term employees without adhering to the existing budgetary and
legislative approval process. There is already a procedure in
place that allows state departments to establish "blanket"
positions in the short term when DPA disallows a state contract.
However, these positions are for less than one year in
duration. AB 149 will provide a new procedure to establish
limited term positions for up to two years outside of the
Legislature's authority.
In addition, Control Section 26 of the Budget Act allows a
department to move funds among schedules in a budget item if
"necessary for the efficient and cost-effective implementation
or programs", but only after the approval by the Department of
Finance and the Joint Legislative Budget Committee. AB 149 will
allow a department to redirect funds intended for an operations
schedule to a personnel schedule in order to fund temporary
positions for up to two years.
AB 149 will require any department or agency that hires a
limited term employee to provide written notice of the
appointment to the chairpersons of the Appropriations Committee,
the Budget Committees, and the Chairperson of the Joint
Legislative Budget Committee.
Existing law allows state agencies to enter into personal
service contracts if the agreement meets certain standards
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including, but not limited to, the following:
a) Clearly demonstrates an actual overall cost savings;
b) The functions contracted are exempted from civil service, or
c) The services contracted are not available in civil service
or are of such a highly specialized or technical nature that the
necessary expertise, experience and ability is not available
through the civil service.
This bill is intended to address a circumstance where a
department has attempted to execute a contract for personal
services, the SPB has disapproved that contract, and the
department is then required to wait until the next budget year
in order to get approval to hire limited term positions to
complete the work - which meanwhile goes uncompleted. Over the
years, some bargaining units have successfully argued before the
SPB that various personal services contracts are in violation of
the Civil Service Act, and that in fact, the services are within
the existing scope of duties of bargaining unit classifications.
However, existing law does not provide the department with the
ability to immediately add positions to complete the personal
services work.