HB1816 Regulates privatization contracts for state agencies and political subdivisions.
Sponsor: Hosmer, Craig (138) Effective Date:07/01/2001
CoSponsor: Reynolds, David L. (77) LR Number: 3623L.03C
Last Action: COMMITTEE: LABOR
02/23/2000 - HCS Reported Do Pass (H)
HCS HB 1816
Next Hearing:Hearing not scheduled
Calendar:HOUSE BILLS FOR PERFECTION
Position on Calendar:021
ACTIONS HEARINGS CALENDAR
BILL SUMMARIES BILL TEXT
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Available Bill Summaries for HB1816 Copyright(c)
* Committee * Introduced

Available Bill Text for HB1816
* Introduced *

BILL SUMMARIES

COMMITTEE

HCS HB 1816 -- STATE AGENCY PRIVATIZATION CONTRACTS

SPONSOR:  Hickey (Hosmer)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Labor by
a vote of 12 to 5.

This substitute regulates the use of privatization contracts by
the state, except that the Department of Transportation is not
covered.  Privatization contracts are agreements or a
combination or series of agreements in which a non-governmental
person or entity agrees with a state agency to provide services
valued at $100,000 or more which could have been provided by
regular employees of the agency.  The substitute:

(1)  Creates the Public Service Accountability Act and prohibits
agencies from entering into privatization contracts, except
under the conditions of this substitute;

(2)  Requires agencies to solicit competitive sealed bids for
privatization contracts based on a written proposal.  Bid
requirements are outlined in the substitute;

(3)  Requires contractors who enter into privatization contracts
to compensate employees at the rate a state employee doing
similar work would receive or the average private sector
compensation rate, whichever is greater.  The compensation must
include the value of health insurance and other benefits;

(4)  Limits privatization contracts to 2 years;

(5)  Requires privatization contracts to contain a provision
requiring the contractor to offer available positions to
qualified public employees whose employment was terminated due
to privatization contracts;

(6)  Requires a nondiscrimination and equal opportunity
provision in all privatization contracts;

(7)  Prohibits public funds from being used to support or oppose
unionization;

(8)  Requires agencies to prepare a comprehensive written
estimate of the cost of using regular public employees before
considering privatization contracts.  The estimate must include
employee pension, insurance, and other benefits;

(9)  Requires contractors to consider a contractor's past
performance and its record of compliance with federal, state,
and local laws before awarding the contract;

(10)  Requires the agency to publicly designate the bidder that
it proposes to award the privatization contract to;

(11)  Requires the agency to prepare a comprehensive written
privatization contract cost analysis;

(12)  Requires the agency to certify in writing that all
provisions of this law have been followed, the quality of
services satisfies fiscal and quality requirements, the cost is
10% less than if the state had completed the services, and the
privatization contract is in the public's best interest;

(13)  Prohibits a privatization contractor from subcontracting
without the approval of the agency;

(14)  Requires privatization contractors and subcontractors to
file an annual financial audit with the agency;

(15)  Requires agency access to privatization contractors'
project financial records, facilities, and employees;

(16)  Requires the privatization contractor to submit at least
an annual report detailing progress and quality of the project.
The contractor must also submit a report of its compliance with
all federal, state, and local laws and citations, complaints or
findings issued by an administrative agency or courts;

(17)  Allows the agency to seek contractual remedies for any
violation of the privatization contract.  Other persons or
entities are also allowed to bring a claim against a contractor
for certain violations of this act;

(18)  Restricts ownership rights or interest in any public
record by a privatization contractor and requires agencies and
contractors to comply with all open records laws;

(19)  Restricts the use of privatization contract records and
agency contract records.  The substitute outlines remedies which
may be taken for violation of these restrictions;

(20)  Prohibits retaliation against any public employee or
private contractor employee who, acting in good faith, discloses
information or participates in any investigation or proceedings
against any agency relating to violation of privatization
contracts.  The identity of any employee complaining in good
faith to the agency or elected official about violation of a
privatization contract will be confidential; and

(21)  Requires private contractors to post provisions of the
privatization contract law and information pertaining to the
filing of a charge for the violation of certain provisions of
the act.

The substitute has an effective date of July 1, 2001.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of $0
in FY 2001, $242,293 in FY 2002, and $231,689 in FY 2003.  Costs
to various state funds of Unknown in FY 2001, FY 2002, and FY
2003.

PROPONENTS:  Supporters say that a formalized review process is
needed to ensure that private entities which are contracting to
provide public services are held accountable to the public.

Testifying for the bill were Representative Hosmer; Service
Employees Union International; Missouri AFL-CIO; International
Brotherhood of Operating Engineers; and Missouri National
Education Association.

OPPONENTS:  Those who oppose the bill say that they acknowledge
the intent of the legislation, but it will not achieve its
intended goals.  The bill's many requirements, which include
provisions regarding pay scales and preparing reports, will make
it difficult for companies to bid on public works projects.

Testifying against the bill were Associated General Contractors;
and Missouri Chamber of Commerce.

Joseph Deering, Legislative Analyst


INTRODUCED

HB 1816 -- State Agency Privatization Contracts

Co-Sponsors:  Hosmer, Reynolds, Bray, Troupe, Hickey, Riley,
Kennedy

This bill regulates the use of privatization contracts by the
state or any political subdivision, except that municipal fire
departments under certain circumstances and the Department of
Transportation are not covered.  Privatization contracts are
agreements or a combination or series of agreements in which a
nongovernmental person or entity agrees with a state agency to
provide services valued at $100,000 or more which could have
been provided by regular employees of the agency.  The bill:

(1)  Prohibits agencies from entering into privatization
contracts except under the conditions of this bill;

(2)  Requires agencies to solicit competitive sealed bids for
privatization contracts based on a written proposal.  Bid
requirements are outlined in the bill;

(3)  Requires contractors who enter into privatization contracts
to compensate employees at the rate a state employee doing
similar work would receive or the average private sector
compensation rate, whichever is greater.  The compensation must
include the value of health insurance and other benefits;

(4)  Limits privatization contracts to 2 years;

(5)  Requires privatization contracts to contain a provision
requiring the contractor to offer available positions to
qualified public employees whose employment was terminated due
to privatization contracts;

(6)  Requires a nondiscrimination and equal opportunity
provision in all privatization contracts;

(7)  Prohibits public funds from being used to support or oppose
unionization;

(8)  Requires agencies to prepare a comprehensive written
estimate of the cost of using regular public employees before
considering privatization contracts.  The estimate must include
employee pension, insurance, and other benefits;

(9)  Requires contractors to consider a contractor's past
performance and its record of compliance with federal, state,
and local laws before awarding the contract;

(10)  Requires the agency to publicly designate the bidder that
it proposes to award the privatization contract to;

(11)  Requires the agency to prepare a comprehensive written
privatization contract cost analysis;

(12)  Requires the agency to certify in writing that all
provisions of this law have been followed, the quality of
services is satisfactory, the cost is 10% less than if the state
had completed the services, and the privatization contract is in
the public's best interest;

(13)  Prohibits a privatization contractor from subcontracting
without the approval of the agency;

(14)  Requires privatization contractors and subcontractors to
file an annual financial audit with the agency;

(15)  Requires agency access to privatization contractors'
project financial records, facilities, and employees;

(16)  Requires the privatization contractor to submit at least
an annual report detailing progress and quality of the project.
The contractor must also submit a report of its compliance with
all federal, state, and local laws;

(17)  Allows the agency to seek contractual remedies for any
violation of the privatization contract.  Other persons or
entities are also allowed to bring claim against a contractor
for certain violations of this law;

(18)  Restricts ownership rights or interest in any public
record by privatization contractor and requires agencies and
contractors to comply with all open records laws;

(19)  Restricts the use of privatization contract records and
agency contract records.  The bill outlines remedies which may
be taken for violations of these restrictions;

(20)  Prohibits retaliation or discrimination against any public
employee or private contractor employee who, acting in good
faith, discloses information or participates in any
investigation or proceedings against any agency relating to
violations of privatization contracts.  The identity of any
employee complaining in good faith to the agency or elected
official about violations of a privatization contract will be
confidential.  The bill allows for civil action and award
damages to employees who have been retaliated or discriminated
against in violation of the law; and

(21)  Requires private contractors to post provisions of
privatization contract law and information pertaining to the
filing of a charge for the violation of certain provisions of
the law.

Nothing in this bill preempts any other law or is to be
construed or interpreted to impair or diminish the authority of
any political subdivision to enact and enforce any law that
provides equivalent or greater protection to its employees.

The bill has an effective date of July 1, 2001.


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