H. B. 2933
(By Delegate Rodighiero)
[Introduced March 4, 2009; referred to the
Committee on Government Organization then the Judiciary.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §4-13-1, §4-13-2,
§4-13-3, §4-13-4, §4-13-5 and §4-13-6, all relating to
privatization contracts; definitions; statement of services
proposed to be the subject of privatization; requirements for
bidding entities; cost estimate; certification to State
Auditor; objection by State Auditor; review; budget data on
privatization; state contracts with business entities to
procure services; prohibition where business entity has
solicited or made political contributions; business entities
which have contracted with state for rendition of services;
and prohibition of solicitation of or making political
contributions.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §4-13-1, §4-13-2,
§4-13-3, §4-13-4, §4-13-5 and §4-13-6, all to read as follows:
ARTICLE 13. PRIVATIZATION CONTRACTS.
§4-13-1. Definitions.
As used in this article, unless the context clearly indicates
a different meaning:
(1) "Agency" or "state agency" means a state governmental
entity, including any bureau, department, division, commission,
agency, committee, office, board, authority, subdivision, program,
council, advisory body, cabinet, panel, system, task force, fund,
compact, institution, survey, position, coalition or other entity
in the State of West Virginia;
(2) "Business entity" means any natural or legal person,
business corporation, professional services corporation, limited
liability company, partnership, limited partnership, business
trust, association or any other legal commercial entity organized
under the laws of this state or any other state or foreign
jurisdiction. The definition of a business entity includes: (i)
All principals who own or control more than ten percent of the
profits or assets of a business entity or ten percent of the stock
in the case of a business entity that is a corporation for profit,
as appropriate; and (ii) any subsidiaries directly or indirectly
controlled by the business entity; and
(3) "Privatize" means a contract to procure the services of a private vendor or business entity to provide a service that is
similar to, or in lieu of, a service provided by a state agency.
§4-13-2. Statement of services; wage rates; health insurance;
hiring of former agency employees; cost estimate;
certification to State Auditor.
An agency may not make any privatization contract and any such
contract is not valid unless the agency first complies with each of
the following requirements:
(1) The agency shall prepare a specific written statement of
the services proposed to be the subject of the privatization
contract, including the specific quantity and standard quality of
the subject services. The agency shall solicit competitive sealed
bids for the privatization contracts based upon this statement.
The day designated by the agency upon which it will accept these
sealed bids shall be the same for any and all parties. This
statement shall be a public record, shall be filed in the agency
and shall be transmitted to the State Auditor for review pursuant
to section three of this article. The term of any privatization
contract may not exceed five years. An amendment to a
privatization contract is not valid if it has the purpose or effect
of avoiding any requirement of this section.
(2) For each position in which a bidder will employ any person
pursuant to the privatization contract and for which the duties are
substantially similar to the duties performed by a regular agency employee or employees, the statement required by subdivision (1)
shall include a statement of the minimum wage rate to be paid for
the position. Every bid for a privatization contract and every
privatization contract shall include provisions specifically
establishing the wage rate for each such position, which may not be
less than said minimum wage rate. Every such bid and contract
shall also include provisions for the contractor to pay not less
than a percentage, comparable to the percentage paid by the state
for state employees, of the costs of health insurance plans for
every employee employed for not less than twenty hours per-week
pursuant to such contract. Each contractor shall submit quarterly
payroll records to the agency, listing the name, address, social
security number, hours worked and the hourly wage paid for each
employee in the previous quarter.
(3) Every privatization contract shall contain provisions
requiring the contractor to offer available employee positions
pursuant to the contract to qualified regular employees of the
agency whose state employment is terminated because of the
privatization contract and who satisfy the hiring criteria of the
contractor.
(4) The agency shall prepare a comprehensive written estimate
of the costs of regular agency employees providing the subject
services in the most cost-efficient manner. The estimate shall
include all direct and indirect costs of regular agency employees providing the subject services, including, but not limited to,
pension, insurance and other employee benefit costs. For the
purpose of this estimate, any employee organization may, at any
time before the final day for the agency to receive sealed bids
pursuant to subdivision (1), propose amendments to any relevant
collective bargaining agreement to which it is a party. Any such
amendments may take effect only if necessary to reduce the cost
estimate pursuant to this paragraph below the contract cost
pursuant to subdivision (5). The estimate shall remain
confidential until after the final day for the agency to receive
sealed bids for the privatization contract pursuant to subdivision
(1), at which time the estimate shall become a public record, shall
be filed in the agency and shall be transmitted to the State
Auditor for review.
(5) After soliciting and receiving bids, the agency shall
publicly designate the bidder to which it proposes to award the
contract. The agency shall prepare a comprehensive written
analysis of the contract cost based upon the designated bid,
specifically including the costs of transition from public to
private operation, of additional unemployment and retirement
benefits, if any, and of monitoring and otherwise administering
contract performance. If the designated bidder proposes to perform
any or all of the contract outside the boundaries of the state, the
contract cost shall be increased by the amount of income tax revenue, if any, which will be lost to the state by the
corresponding elimination of agency employees, as determined by the
Department of Revenue to the extent that it is able to do so.
(6) The head of the agency shall certify in writing, along
with a copy of the proposed privatization contract, to the State
Auditor that:
(A) He or she has complied with all provisions of this section
and of all other applicable laws;
(B) The quality of services provided by the designated bidder
is likely to satisfy the quality requirements of the statement
prepared pursuant to subdivision (1), and to equal or exceed the
quality of services which could be provided by regular agency
employees pursuant to subdivision (4);
(C) The contract cost pursuant to subdivision (5) will be less
than the estimated cost pursuant to subdivision (4), taking into
account all comparable types of costs;
(D) The designated bidder and its supervisory employees, while
in the employ of the designated bidder, have no adjudicated record
of substantial or repeated willful noncompliance with any relevant
federal or state regulatory statute including, but not limited to,
statutes concerning labor relations, occupational safety and
health, nondiscrimination and affirmative action, environmental
protection and conflicts of interest; and
(E) The proposed privatization contract is in the public interest, in that it meets the applicable quality and fiscal
standards set forth herein.
§4-13-3. Objection by State Auditor; review.
(a) An agency may not make any privatization contract and any
such contract made is not valid if, within thirty business days
after receiving the certificate required by section two of this
article, the State Auditor notifies the agency of his or her
objection. The objection shall be in writing and shall state
specifically the State Auditor's finding that the agency has failed
to comply with one or more requirements of section two of this
article, including that the State Auditor finds incorrect, based on
independent review of all the relevant facts, any of the findings
required by subdivision (6) of section two of this article. The
State Auditor may extend the time for objection for an additional
period of thirty business days beyond the original thirty business
days by written notice to the submitting agency stating the reason
for the extension.
(b) For the purpose of reviewing the agency's compliance and
certificate pursuant to section two of this article, the State
Auditor or his or her designee may require by summons the
attendance and testimony under oath of witnesses and the production
of books, papers and other records relating to the review. All
provisions of law relative to summonses in civil cases, including
the manner of service, the scope and relevance of such review, and the compensation of witnesses who are not state employees, shall
apply to the summonses.
(c) The State Auditor may propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code and prescribe forms to carry out
the provisions of this section and section two.
(d) The objection of the State Auditor pursuant to subsection
(a) shall be final and binding on the agency, unless the State
Auditor thereafter in writing withdraws the objection, stating the
specific reasons, based upon a revised certificate by the agency
and upon the State Auditor's review thereof.
§4-13-4. Budget data on privatization.
(a) Notwithstanding the provisions set forth in article one-a,
chapter five of this code, the state budget shall include an
itemized listing of the percentage of each agency's appropriation
that is utilized for all privatization contracts.
(b) The percentage of each agency's appropriation shall be
provided for public inspection on the agency's website, if one
exists, and made available online in a "user-friendly" summary
format using plain language.
§4-13-5. State contracts with business entities to procure
services; prohibition where business entity has
solicited or made political contributions; time
limitations.
The state or any of its purchasing agents or agencies or those
of its independent authorities, as the case may be, may not enter
into an agreement or otherwise contract to procure from any
business entity services, if that business entity has solicited or
made any contribution of money, or pledge of contribution,
including in-kind contributions to a candidate committee or
election fund of any candidate or holder of the public office of
Governor, or to any state or county political party committee: (i)
Within the eighteen months immediately preceding the commencement
of negotiations for the contract or agreement; (ii) during the term
of office of a Governor, if contributions are made to a candidate
committee or election fund of the holder of that office, or to any
state or county political party committee of a political party
nominating the Governor in the last gubernatorial election
preceding the commencement of the term; or (iii) within the
eighteen months immediately preceding the last day of the term of
office of Governor, in which case the prohibition shall continue
through the end of the next immediately following term of the
office of Governor, if contributions are made to a candidate
committee or election fund of the holder of that office, or to any
state or county political party committee of a political party
nominating the Governor in the last gubernatorial election
preceding the commencement of the latter term.
§4-13-6. Business entities which have contracted with state for rendition of services or supplies or for acquisition,
sale, or lease of any lands or buildings; prohibition
of solicitation of or making political contributions;
time limitations.
Any business entity which agrees to any contract or agreement
with the state or any department or agency thereof or its
independent authorities for the rendition of services may not
knowingly solicit or make any contribution of money, or pledge of
a contribution, including in-kind contributions, to a candidate
committee or election fund of any candidate or holder of the public
office of Governor or to any state or county political party
committee prior to the completion of the contract or agreement.
NOTE: The purpose of this bill is to prohibit privatization of
government services unless private companies prove that they can
perform those services more efficiently than government employees;
to provide for State Auditor review of proposed privatization
contracts; to list the percentage of each agency's appropriation
that is being spent on private contracts in the state budget and
disclose this information on the Internet; and to bar business
entities bidding on contracts from making campaign contributions to
government officials.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.