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SF 2515

as introduced - 88th Legislature (2013 - 2014) Posted on 03/11/2014 09:56am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to local government; establishing procedures and standards for
contracting with private entities for the provision of services 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 (a) For purposes of this section, the following terms
have the meanings given them in this subdivision.
new text end

new text begin (b) "Municipality" has the meaning given in section 471.345, subdivision 1.
new text end

new text begin (c) "Employee of a private contractor" includes 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 (d) "Privatization contract" means an enforceable agreement or combination or
series of enforceable agreements in which a private contractor agrees with a municipality
to provide services that are substantially similar to and in place of services previously
provided by public employees of the municipality or, in the case of new services, services
that could be provided by public employees of the municipality.
new text end

new text begin (e) "Public employee" has the meaning given in section 179A.03, subdivision 14,
except that for purposes of this section, "public employer" means municipality as defined
in paragraph (b).
new text end

new text begin (f) "Services" means all aspects of services provided by a private contractor to a
municipality or by a subcontractor to a private contractor to implement a privatization
contract.
new text end

new text begin (g) "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 Application. new text end

new text begin (a) This section applies to privatization contracts in an
amount of $25,000 or more.
new text end

new text begin (b) This section does not apply to:
new text end

new text begin (1) temporary contracts and nonrecurring contracts that do not result in displacement
of public employees; or
new text end

new text begin (2) contracts for services previously performed by supervisory employees,
professional employees, or confidential employees, as defined in section 179A.03.
new text end

new text begin Subd. 3. new text end

new text begin Municipality's determination to privatize; procedure. new text end

new text begin (a) A
municipality considering whether to enter into a privatization contract for a service
shall prepare a comprehensive written description of the services to be privatized. The
description must indicate whether the same or substantially similar services are being
provided by public employees. In the case of proposed new services, the description
must include the municipality's reasons for determining that those services could not or
should not be provided by current or additional public employees. The description must
include an estimate of the cost of having the service provided in the most cost-effective
manner by municipal employees. The cost estimate must include all direct costs of having
municipal 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 subdivision
4, when it becomes public data.
new text end

new text begin (b) The municipality must notify any exclusive representative or representatives of
employees that would be affected by a proposed privatization contract of its intention
to enter into a privatization contract, and must provide the exclusive representative or
representatives with a copy of the description prepared under this subdivision. For the
purpose of the municipality's cost estimate under paragraph (a), an exclusive representative
of municipal employees may propose amendments to any relevant collective bargaining
agreement to which it is a party at any time before the final day for the receipt of responses
under subdivision 4. 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 subdivision below the cost of providing the service under
a privatization contract.
new text end

new text begin (c) The municipality's solicitation of services under a proposed privatization contract
must be based on the written description. The municipality's solicitation of proposals shall
follow the procedures required for contracts in section 471.345.
new text end

new text begin Subd. 4. new text end

new text begin Private contractor's proposal requirements. new text end

new text begin The municipality's
solicitation of services under a proposed privatization contract must require a responder to
disclose:
new text end

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;
new text end

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;
new text end

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 or candidate for elected office of that municipality.
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 Subd. 5. new text end

new text begin Municipality's analysis of proposals. new text end

new text begin In determining which private
contractor to award the privatization contract to, the municipality shall consider each
responder's past performance and record of compliance with federal and state laws and
local ordinances. The municipality shall prepare a comprehensive written estimate of the
cost of each 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 a responder proposes to perform any or all of the desired services outside the
state, the commissioner of revenue shall assist the municipality in determining, as nearly
as possible, any loss of sales and income tax revenue to the state. The municipality shall
include that amount in the cost estimate prepared under this subdivision.
new text end

new text begin Subd. 6. new text end

new text begin Municipality's certification. new text end

new text begin Before awarding a privatization contract, a
municipality shall adopt the following findings:
new text end

new text begin (1) the municipality has complied with this section and other applicable law;
new text end

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 municipal employees;
new text end

new text begin (3) the cost of the proposed contract, including all costs identified under subdivision
5, will be at least 15 percent lower than the cost determined under subdivision 3, taking
into account any amendments to a collective bargaining agreement proposed by an
exclusive representative; and
new text end

new text begin (4) the proposed privatization contract is in the public interest.
new text end

new text begin Subd. 7. new text end

new text begin Private contract term. new text end

new text begin The term of a privatization contract, including
any extensions resulting from amendments or change orders, must not exceed two years.
An amendment or change order is not valid if it has the purpose or effect of avoiding
any requirement of this section.
new text end

new text begin Subd. 8. new text end

new text begin Wage rates. new text end

new text begin The minimum wage rate for employees of a private contractor
providing service for a municipality is the average wage rate for the classification of
municipal 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 Subd. 9. new text end

new text begin Affirmative action standards; no displacement. new text end

new text begin 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 municipality. No
privatization contract may cause the municipality to fail to meet its affirmative action
standards or cause the displacement of municipal employees. For purposes of this
subdivision, "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 Subd. 10. new text end

new text begin Use of public money. new text end

new text begin A private contractor may not use public money
paid to it under a privatization contract to:
new text end

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. 11. 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 municipality is a metropolitan agency, it shall submit copies of all public data
associated with the privatization contract to the legislative auditor. All other contracting
municipalities shall submit copies of all public data associated with the privatization
contract to the state auditor.
new text end