S.F. _____ Section 1. Section 8.47, subsection 1, unnumbered paragraph 1 1, Code 2014, is amended to read as follows: 2 The department of administrative services, in cooperation 3 with the office of attorney general and the department of 4 management, shall adopt uniform terms and conditions for 5 service contracts executed by a department or establishment 6 benefiting from service contracts which terms and conditions 7 shall be consistent with the contractual requirements of 8 chapter 8F . The terms and conditions shall include but are not 9 limited to all of the following: 10 Sec. 2. Section 8F.3, subsection 3, Code 2014, is amended 11 to read as follows: 12 3. Prior to entering into a service contract with a 13 recipient entity, the oversight agency shall determine do all 14 of the following: 15 a. Determine whether the recipient entity can reasonably 16 be expected to comply with the requirements of the service 17 contract. If the oversight entity is unable to determine 18 whether the recipient entity can reasonably be expected 19 to comply with the requirements of the service contract, 20 the oversight entity shall request such information from 21 the recipient entity as described in subsection 1 to make 22 a determination. If the oversight agency determines from 23 the information provided that the recipient entity cannot 24 reasonably be expected to comply with the requirements of the 25 service contract, the oversight agency shall not enter into the 26 service contract. 27 b. Perform a cost comparison establishing whether the 28 contract costs from the proposed service contract are less 29 than the costs of having the services provided by an agency. 30 Contract costs shall include direct costs, including salaries 31 and fringe benefits, indirect overhead costs, including the 32 contractor’s proportional share of existing administrative 33 salaries and benefits, rent and equipment costs, utilities, 34 and materials. Additionally, transition costs, including 35 -1- LSB 5353XC (3) 85 ec/rj 1/ 4

S.F. _____ unemployment compensation, shall be included in the analysis of 1 contract costs. If the oversight agency determines from the 2 information provided that the contract costs of the recipient 3 entity are not less than the costs of having the services 4 provided by an agency, the oversight agency shall not enter 5 into the service contract. 6 c. If the proposed service contract may result in reduced 7 public employment by an agency in an area, perform an 8 economic impact analysis to consider the impact of the service 9 contract on the possible loss of employment or income in the 10 affected area, impact on social services to include public 11 assistance programs, economic impact on local businesses, any 12 possible changes in tax revenue for the affected area, and 13 any environmental impacts that may result from the service 14 contract. 15 Sec. 3. Section 8F.3, Code 2014, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 4. A service contract with a recipient 18 entity shall include the following terms and conditions: 19 a. Specific performance criteria and cost parameters with 20 termination provisions for failure to meet the performance 21 criteria and cost parameters. 22 b. A requirement that the compensation paid to employees 23 of a recipient entity pursuant to the service contract shall 24 be comparable to the compensation paid to public employees 25 performing similar work or the average private sector wage for 26 similar work, whichever is less. 27 c. A provision prohibiting the automatic renewal of 28 the terms of a service contract without complying with the 29 requirements of this section prior to renewing the service 30 contract. 31 d. A provision prohibiting the payment for services under 32 the service contract regardless of whether the services are 33 actually provided. 34 Sec. 4. Section 8F.4, Code 2014, is amended by adding the 35 -2- LSB 5353XC (3) 85 ec/rj 2/ 4

S.F. _____ following new subsection: 1 NEW SUBSECTION . 4. An oversight agency shall make 2 information described in section 8F.3, subsection 3, paragraphs 3 “b” and “c” , and information required to be reported by a 4 recipient agency pursuant to this section available to the 5 public. 6 Sec. 5. Section 8G.3, subsection 3, paragraph a, Code 2014, 7 is amended by adding the following new subparagraph: 8 NEW SUBPARAGRAPH . (10) A recipient entity as defined in 9 section 8F.2. 10 Sec. 6. Section 8G.4, subsection 2, Code 2014, is amended by 11 adding the following new paragraph: 12 NEW PARAGRAPH . 0j. Information required to be provided 13 pursuant to chapter 8F. 14 EXPLANATION 15 The inclusion of this explanation does not constitute agreement with 16 the explanation’s substance by the members of the general assembly. 17 This bill concerns service contracts entered into by a 18 government entity. 19 Code section 8.47, concerning service contracts entered into 20 by a state executive branch department, is amended to provide 21 that the standard terms and conditions of a service contract 22 shall be consistent with the contractual requirements of Code 23 chapter 8F. 24 Code chapter 8F, establishing accountability requirements 25 for certain service contracts, is amended. “Service contract” 26 is defined by the Code chapter as a contract between a 27 government entity, called an oversight agency, and a private 28 or other intergovernmental entity, called a recipient entity, 29 where federal or state moneys are involved for a service or 30 services when the predominant factor, thrust, and purpose of 31 the contract as reasonably stated is for the provision of 32 services. 33 Code section 8F.3, subsection 3, concerning contractual 34 requirements for service contracts, is amended to require an 35 -3- LSB 5353XC (3) 85 ec/rj 3/ 4

S.F. _____ oversight agency to perform a cost comparison and an economic 1 impact analysis prior to entering into a service contract. 2 The cost comparison requires a determination that a service 3 contract will result in lower contract costs than having the 4 services provided by state government. The economic impact 5 analysis concerns a determination of the impact on employment, 6 economic activity, and public assistance if public employment 7 in a particular area are reduced pursuant to a service 8 contract. 9 Code section 8F.3 is further amended to require a service 10 contract to include performance criteria, provisions governing 11 compensation paid to employees of a recipient entity, 12 provisions prohibiting automatic renewal of a service contract, 13 and provisions prohibiting payment regardless of whether the 14 services are actually provided. 15 Code section 8F.4, concerning reporting requirements, 16 is amended to require an oversight agency to make certain 17 information described in Code section 8F.3, subsection 3, and 18 information required to be reported by a recipient agency 19 pursuant to this Code section available to the public. 20 Code chapter 8G, establishing the taxpayer transparency 21 Act, is amended to specifically include recipient entities, 22 as defined in Code chapter 8F, within the definition of 23 “entity” for purposes of the Code chapter. Code section 24 8G.4, concerning the creation of a searchable budget database 25 internet site, is amended to require that information required 26 to be provided pursuant to Code chapter 8F be included on the 27 site. 28 -4- LSB 5353XC (3) 85 ec/rj 4/ 4