HF 808

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to public employment; establishing procedures
and standards for contracting with private entities
for the provision of services that have been, or
otherwise would be, provided by public employees;
providing for public accountability; proposing coding
for new law in Minnesota Statutes, chapter 471.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [471.706] PRIVATIZATION OF PUBLIC SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section:
new text end

new text begin (1) "agency" means a state agency as defined in section
13.02, subdivision 17, including the Minnesota state colleges
and universities, but not the University of Minnesota, as well
as a metropolitan agency as defined in section 473.121,
subdivision 5a, and a municipality as defined in section
471.345, subdivision 1;
new text end

new text begin (2) "employee of a private contractor" means an employee of
a private contractor as defined by this subdivision or an
employee of a subcontractor or independent contractor that
provides supplies or services to a private contractor, as well
as a former employee of a private contractor or subcontractor
and a former independent contractor;
new text end

new text begin (3) "private contractor" means an entity that enters into a
privatization contract with an agency;
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new text begin (4) "privatization contract" means an enforceable agreement
or combination or series of agreements by which a private
contractor agrees with an agency to provide services that are
substantially similar to and in place of services previously
provided by public employees of the agency or, in the case of
new services, services that could be provided by public
employees of the agency;
new text end

new text begin (5) "public employee" has the meaning as defined in section
179A.03, subdivision 14, except that for purposes of this
section public employer means an agency as defined in clause
(1);
new text end

new text begin (6) "services" means all aspects of services provided by a
private contractor to an agency or by a subcontractor to a
private contractor to implement a privatization contract; and
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new text begin (7) "subcontractor" means a subcontractor of a private
contractor for work under a privatization contract or an
amendment to a privatization contract.
new text end

new text begin Subd. 2. new text end

new text begin Privatization contracts; requirements. new text end

new text begin (a) This
section applies to privatization contracts in an amount of
$25,000 or more. The requirements imposed by this section are
in addition to, and do not supersede, those imposed by sections
16C.08 and 179A.23.
new text end

new text begin (b) An agency shall prepare a specific written statement of
the services to be provided under a proposed privatization
contract. The statement must indicate whether the same or
substantially similar services are being provided by public
employees. In the case of proposed new services, the statement
must include the agency's reasons why it determined that those
services could or should not be provided by current or
additional public employees. The agency's solicitation of
services under a proposed privatization contract must be based
on the statement. The agency shall notify any exclusive
representative or representatives of employees that would be
affected by a proposed privatization contract of its intention
to enter into such a contract, and shall provide the exclusive
representative or representatives with a copy of the statement
prepared under this paragraph.
new text end

new text begin (c) A formal or informal solicitation of services under a
proposed privatization contract must require a responder to
disclose:
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new text begin (1) the length of continuous employment of the responder's
current employees by job classification without identifying
employees by name and, at the responder's option, any relevant
prior experience of those employees;
new text end

new text begin (2) if the proposed services are to be performed by new
employees, the minimum requirements the responder will impose on
job applicants;
new text end

new text begin (3) the responder's current annual rate of employee
turnover;
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new text begin (4) the number of hours, if any, planned for each employee
relating to duties to be performed by the employee in providing
services under the proposed privatization contract;
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new text begin (5) any complaints issued by a federal, state, or local
enforcement agency relating to alleged violations of relevant
laws or rules, including those relating to employee safety and
health and labor relations, along with any court decisions,
administrative findings, or penalties for violations of those
laws and rules, listing the date, the court or agency, and the
law or rule found to be violated;
new text end

new text begin (6) any collective bargaining agreements or personnel
policies covering the employees to perform services under the
proposed privatization contract; and
new text end

new text begin (7) any political contribution made by the responder or
managerial employee of the responder, during the four years
immediately preceding the due date of the response, to an
elected official of the state, a candidate for elected state
office, and, if the soliciting agency is a local unit of
government, an elected official or candidate for elected office
of that unit.
new text end

new text begin If the responder is a subsidiary of a parent entity, the
disclosures made in response to clauses (5), (6), and (7), must
cover the parent entity as well as the responder itself.
new text end

new text begin (d) The minimum wage rate for employees of a private
contractor providing service for an agency is the average wage
rate for the classification of agency employees whose duties are
most similar, plus the value of health and other benefits
provided to the public employees in that classification.
new text end

new text begin (e) The term of a privatization contract, including any
extensions resulting from amendments or change orders, may not
exceed two years. No amendment or change order is valid if it
has the purpose or effect of avoiding any requirement of this
section.
new text end

new text begin (f) A privatization contract must impose affirmative action
standards on the private contractor and any subcontractors that
are at least as stringent as those applying to the contracting
agency. No privatization contract may cause the agency to fail
to meet its affirmative action standards or cause the
displacement of agency employees. For purposes of this
paragraph, "displacement" means a layoff, demotion, involuntary
transfer to a new classification or title, involuntary transfer
or reassignment to a new location requiring a change in
residence, or reduction in hours of work, wages, or benefits.
new text end

new text begin (g) A private contractor may not use public money paid to
it under a privatization contract to:
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new text begin (1) support or oppose the organization of its employees by
an exclusive representative;
new text end

new text begin (2) assist a subcontractor to support or oppose the
organization of its employees;
new text end

new text begin (3) facilitate or deter the ability of an exclusive
representative of its employees to carry out the exclusive
representative's responsibilities; or
new text end

new text begin (4) assist a subcontractor to facilitate or deter the
lawful activities of an exclusive representative of its
employees.
new text end

new text begin Subd. 3. new text end

new text begin Review of contract costs. new text end

new text begin (a) An agency
considering whether to enter into a privatization contract for a
service shall prepare a comprehensive written estimate of having
the same service provided in the most cost-effective manner by
agency employees. The estimate must include all direct costs of
having agency employees provide the service, including the cost
of pension, insurance, and other employee benefits. The
estimate is nonpublic data, as defined in section 13.02,
subdivision 9, until the day after the deadline for receipt of
responses under paragraph (b), when it becomes public data and
must be published in the State Register. For the purpose of the
estimate, an exclusive representative of agency employees, any
time before the final day for the receipt of responses under
paragraph (b), may propose amendments to any relevant collective
bargaining agreement to which it is a party. Any amendments
take effect if they are subsequently approved by both parties to
the collective bargaining agreement and if they are necessary to
reduce the cost estimate determined under this paragraph below
the cost of providing the service under a privatization contract.
new text end

new text begin (b) After soliciting and receiving responses, the agency
shall publicly designate the responder to which it proposes to
award the privatization contract. In making its selection, the
agency shall consider the responder's past performance and
record of compliance with federal and state laws and local
ordinances. The agency shall prepare a comprehensive written
estimate of the cost of the proposal based on the responder's
bid, including the cost of a transition from public to private
provision of the service, any additional unemployment and
retirement benefits resulting from the transfer, and costs
associated with monitoring the proposed contract. If the
designated responder proposes to perform any or all of the
desired services outside the state, the commissioner of revenue
shall determine, as nearly as possible, any loss of sales and
income tax revenue to the state. The agency shall include that
amount in the cost estimate prepared under this paragraph.
new text end

new text begin (c) Before awarding a privatization contract, an agency
head or a governing body of a metropolitan agency or
municipality shall certify in writing that:
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new text begin (1) the agency head or governing body has complied with
this section and other applicable law;
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new text begin (2) the quality of the services to be provided by the
designated responder is likely to equal or exceed the quality of
services that could be provided by agency employees;
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new text begin (3) the cost of the proposed contract, including all costs
identified under paragraph (b), will be at least 15 percent
lower than the cost determined under paragraph (a), taking into
account any amendments to a collective bargaining agreement
proposed by an exclusive representative; and
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new text begin (4) that the proposed privatization contract is in the
public interest.
new text end

new text begin Subd. 4. new text end

new text begin Data practices. new text end

new text begin A privatization contract must
comply with section 13.05, subdivision 11. All data relating to
a privatization contract are public data. If the contracting
agency is a state or metropolitan agency, it shall submit copies
of all public data associated with the privatization contract to
the legislative auditor. If the contracting agency is a
municipality, it shall submit copies of all public data
associated with the privatization contract to the state auditor.
new text end