1.1                          A bill for an act 
  1.2             relating to public employment in the kindergarten 
  1.3             through grade 12 public school system; establishing 
  1.4             procedures and standards for contracting with private 
  1.5             entities for the provision of services that have been, 
  1.6             or otherwise would be, provided by public employees in 
  1.7             the kindergarten through grade 12 public school 
  1.8             system; providing for public accountability; proposing 
  1.9             coding for new law in Minnesota Statutes, chapter 471. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [471.706] [PRIVATIZATION OF PUBLIC SERVICES.] 
  1.12     Subdivision 1.  [DEFINITIONS.] For purposes of this section:
  1.13     (1) "employee of a private contractor" means an employee of 
  1.14  a private contractor as defined by this subdivision or an 
  1.15  employee of a subcontractor or independent contractor that 
  1.16  provides supplies or services to a private contractor, as well 
  1.17  as a former employee of a private contractor or subcontractor 
  1.18  and a former independent contractor; 
  1.19     (2) "private contractor" means an entity that enters into a 
  1.20  privatization contract with a kindergarten through grade 12 
  1.21  public school district; 
  1.22     (3) "privatization contract" means an enforceable agreement 
  1.23  or combination or series of agreements by which a private 
  1.24  contractor agrees with a public school district to provide 
  1.25  services that are substantially similar to and in place of 
  1.26  services previously provided by public employees of the public 
  1.27  school district or, in the case of new services, services that 
  2.1   could be provided by public employees of the public school 
  2.2   district; 
  2.3      (4) "public employee" has the meaning given in section 
  2.4   179A.03, subdivision 14, and applies exclusively to employees in 
  2.5   kindergarten through grade 12 public school districts; 
  2.6      (5) "services" means all aspects of services provided by a 
  2.7   private contractor to a public school district or by a 
  2.8   subcontractor to a private contractor to implement a 
  2.9   privatization contract; and 
  2.10     (6) "subcontractor" means a subcontractor of a private 
  2.11  contractor for work under a privatization contract or an 
  2.12  amendment to a privatization contract. 
  2.13     Subd. 2.  [PRIVATIZATION CONTRACTS; REQUIREMENTS.] (a) This 
  2.14  section applies to privatization contracts in an amount of 
  2.15  $25,000 or more.  The requirements imposed by this section are 
  2.16  in addition to, and do not supersede, those imposed by sections 
  2.17  16C.08 and 179A.23. 
  2.18     (b) A kindergarten through grade 12 public school district 
  2.19  shall prepare a specific written statement of the services to be 
  2.20  provided under a proposed privatization contract.  The statement 
  2.21  must indicate whether the same or substantially similar services 
  2.22  are being provided by public employees.  In the case of proposed 
  2.23  new services, the statement must include the school district's 
  2.24  reasons why it determined that those services could or should 
  2.25  not be provided by current or additional public employees.  The 
  2.26  school district's solicitation of services under a proposed 
  2.27  privatization contract must be based on the statement.  The 
  2.28  school district shall notify any exclusive representative or 
  2.29  representatives of employees that would be affected by a 
  2.30  proposed privatization contract of its intention to enter into 
  2.31  such a contract, and shall provide the exclusive representative 
  2.32  or representatives with a copy of the statement prepared under 
  2.33  this paragraph. 
  2.34     (c) A formal or informal solicitation of services under a 
  2.35  proposed privatization contract must require a responder to 
  2.36  disclose: 
  3.1      (1) the length of continuous employment of the responder's 
  3.2   current employees by job classification without identifying 
  3.3   employees by name and, at the responder's option, any relevant 
  3.4   prior experience of those employees; 
  3.5      (2) if the proposed services are to be performed by new 
  3.6   employees, the minimum requirements the responder will impose on 
  3.7   job applicants; 
  3.8      (3) the responder's current annual rate of employee 
  3.9   turnover; 
  3.10     (4) the number of hours, if any, planned for each employee 
  3.11  relating to duties to be performed by the employee in providing 
  3.12  services under the proposed privatization contract; 
  3.13     (5) any complaints issued by a federal, state, or local 
  3.14  enforcement agency relating to alleged violations of relevant 
  3.15  laws or rules, including those relating to employee safety and 
  3.16  health and labor relations, along with any court decisions, 
  3.17  administrative findings, or penalties for violations of those 
  3.18  laws and rules, listing the date, the court or agency, and the 
  3.19  law or rule found to be violated; and 
  3.20     (6) any collective bargaining agreements or personnel 
  3.21  policies covering the employees to perform services under the 
  3.22  proposed privatization contract.  
  3.23     If the responder is a subsidiary of a parent entity, the 
  3.24  disclosures made in response to clauses (5) and (6) must cover 
  3.25  the parent entity as well as the responder itself. 
  3.26     (d) The minimum wage rate for employees of a private 
  3.27  contractor providing service for an agency is the average wage 
  3.28  rate for the classification of agency employees whose duties are 
  3.29  most similar, plus the value of health and other benefits 
  3.30  provided to the public employees in that classification. 
  3.31     (e) The term of a privatization contract, including any 
  3.32  extensions resulting from amendments or change orders, may not 
  3.33  exceed two years.  No amendment or change order is valid if it 
  3.34  has the purpose or effect of avoiding any requirement of this 
  3.35  section. 
  3.36     (f) A privatization contract must impose affirmative action 
  4.1   standards on the private contractor and any subcontractors that 
  4.2   are at least as stringent as those applying to the contracting 
  4.3   agency.  No privatization contract may cause the school district 
  4.4   to fail to meet its affirmative action standards or cause the 
  4.5   displacement of school district employees.  For purposes of this 
  4.6   paragraph, "displacement" means a layoff, demotion, involuntary 
  4.7   transfer to a new classification or title, involuntary transfer 
  4.8   or reassignment to a new location requiring a change in 
  4.9   residence, or reduction in hours of work, wages, or benefits. 
  4.10     (g) A private contractor may not use public money paid to 
  4.11  it under a privatization contract to: 
  4.12     (1) support or oppose the organization of its employees by 
  4.13  an exclusive representative; 
  4.14     (2) assist a subcontractor to support or oppose the 
  4.15  organization of its employees; 
  4.16     (3) facilitate or deter the ability of an exclusive 
  4.17  representative of its employees to carry out the exclusive 
  4.18  representative's responsibilities; or 
  4.19     (4) assist a subcontractor to facilitate or deter the 
  4.20  lawful activities of an exclusive representative of its 
  4.21  employees. 
  4.22     Subd. 3.  [REVIEW OF CONTRACT COSTS.] (a) A school district 
  4.23  considering whether to enter into a privatization contract for a 
  4.24  service shall prepare a comprehensive written estimate of having 
  4.25  the same service provided in the most cost-effective manner by 
  4.26  public school employees.  The estimate must include all direct 
  4.27  costs of having school district employees provide the service, 
  4.28  including the cost of pension, insurance, and other employee 
  4.29  benefits.  The estimate is nonpublic data, as defined in section 
  4.30  13.02, subdivision 9, until the day after the deadline for 
  4.31  receipt of responses under paragraph (b), when it becomes public 
  4.32  data and must be published in the State Register.  For the 
  4.33  purpose of the estimate, an exclusive representative of school 
  4.34  district employees, any time before the final day for the 
  4.35  receipt of responses under paragraph (b), may propose amendments 
  4.36  to any relevant collective bargaining agreement to which it is a 
  5.1   party.  Any amendments take effect if they are subsequently 
  5.2   approved by both parties to the collective bargaining agreement 
  5.3   and if they are necessary to reduce the cost estimate determined 
  5.4   under this paragraph below the cost of providing the service 
  5.5   under a privatization contract. 
  5.6      (b) After soliciting and receiving responses, the school 
  5.7   district shall publicly designate the responder to which it 
  5.8   proposes to award the privatization contract.  In making its 
  5.9   selection, the school district shall consider the responder's 
  5.10  past performance and record of compliance with federal and state 
  5.11  laws and local ordinances.  The school district shall prepare a 
  5.12  comprehensive written estimate of the cost of the proposal based 
  5.13  on the responder's bid, including the cost of a transition from 
  5.14  public to private provision of the service, any additional 
  5.15  unemployment and retirement benefits resulting from the 
  5.16  transfer, and costs associated with monitoring the proposed 
  5.17  contract.  If the designated responder proposes to perform any 
  5.18  or all of the desired services outside the state, the 
  5.19  commissioner of revenue shall determine, as nearly as possible, 
  5.20  any loss of sales and income tax revenue to the state.  The 
  5.21  school district shall include that amount in the cost estimate 
  5.22  prepared under this paragraph. 
  5.23     (c) Before awarding a privatization contract, a school 
  5.24  district head or a governing body of a metropolitan agency or 
  5.25  municipality shall certify in writing that: 
  5.26     (1) the agency head or governing body has complied with 
  5.27  this section and other applicable law; 
  5.28     (2) the quality of the services to be provided by the 
  5.29  designated responder is likely to equal or exceed the quality of 
  5.30  services that could be provided by public school employees; 
  5.31     (3) the cost of the proposed contract, including all costs 
  5.32  identified under paragraph (b), will be at least 15 percent 
  5.33  lower than the cost determined under paragraph (a), taking into 
  5.34  account any amendments to a collective bargaining agreement 
  5.35  proposed by an exclusive representative; and 
  5.36     (4) that the proposed privatization contract is in the 
  6.1   public interest. 
  6.2      Subd. 4.  [DATA PRACTICES.] A privatization contract must 
  6.3   comply with section 13.05, subdivision 11.  All data relating to 
  6.4   a privatization contract are public data.  The school district 
  6.5   shall submit copies of all public data associated with the 
  6.6   privatization contract to the state auditor.