BILL ANALYSIS                                                                                                                                                                                                    Ó




                                                                  AB 514
                                                                  Page A
          Date of Hearing:   May 4, 2011

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                                Sandre Swanson, Chair
                   AB 514 (Hernandez) - As Amended:  April 27, 2011
           
          SUBJECT  :   Public works: hauling refuse.

           SUMMARY  :   Clarifies the definition of "hauling of refuse" for 
          purposes of prevailing wage law.  Specifically,  this  bill:

          1)Provides that "hauling of refuse" includes the hauling of 
            materials other than bona fide commodities sold at fair market 
            value from a public works site.

          2)Specifies that a "bona fide commodity" is a commodity for 
            which there exists a publicly-traded commodity market, such as 
            copper, steel or aluminum.
           
           EXISTING LAW  :

          1) Requires the prevailing wage rate to be paid to all workers 
             on "public works" projects over $1,000.

          2) Defines "public work" to include, among other things, 
             construction, alteration, demolition, installation or repair 
             work done under contract and paid for in whole or in part out 
             of public funds.

          3) Also defines "public works" to include the hauling of refuse 
             from a public works site to an outside disposal location, 
             with respect to contracts involving any state agency or any 
             political subdivision of the state.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   As discussed above, current law defines '"public 
          works" as "Ýc]onstruction, alteration, demolition, installation, 
          or repair work done under contract and paid for in whole or in 
          part out of public funds . . . ." (Labor Code section 1720). 

          Under Labor Code section 1720.3, "public works also means the 
          hauling of refuse from a public works site to an outside 
          disposal-location, with respect to contracts involving any state 
          agency?or any political subdivision of the state."









                                                                  AB 514
                                                                  Page B

          The Department of Industrial Relations (DIR) has stated the 
          following in a recent public works coverage determination<1>:

               "The off-haul of 'refuse' from a public works site to an 
               outside disposal location is subject to prevailing wage 
               requirements under section 1720.3.  'The apparent intent of 
               the Legislature in enacting section 1720.3 was to include 
               within the definition of 'public works' the hauling of any 
               refuse that was part of the construction project.' (83 Ops. 
               Cal.Atty.Gen. 166, 168-169 (2000).)  Consistent with 
               long-standing Department interpretation, the term 'refuse' 
               encompasses 'anything discarded or rejected as useless or 
               worthless; trash.' (See American Heritage Dict. (new 
               college ed. 1979) p. 1095).)"

           ARGUMENTS IN SUPPORT  :

          This measure is jointly sponsored by the California State 
          Building and Construction Trades Council and the California 
          Teamsters Public Affairs Council.

          They state that current law guarantees workers employed at 
          public works sites are subject to a prevailing wage for 
          transporting refuse from the worksite to an offsite location.  
          Although the statutory provision exists, the sponsors contend 
          that many workers do not receive the wages that they are due as 
          a result of loopholes that circumvent this mandate.

          They contend that some unscrupulous employers have rendered this 
          provision meaningless by selling refuse hauled from public works 
          sites for a nominal fee (an entire load for $1 for example) and 
          then refusing to pay the prevailing wage.  Their rationale is 
          that since the material hauled away had "some value" it was no 
          longer refuse.  Therefore, this bill would ensure that only bona 
          fide commodities sold at fair market value would be deemed not 
          to constitute "refuse."

           ARGUMENTS IN OPPOSITION  :

          Opponents contend that this bill would expand the prevailing 
          wage requirement for public contracts related to the hauling of 
          municipal solid waste.  They argue that this bill could 


          ---------------------------
          <1> Friendly Inn/Senior Center Abatement and Demolition Project, 
          City of Morgan Hill.  DIR Public Works Case No. 2008-027 (2008).








                                                                 AB 514
                                                                  Page C
          substantially increase the cost of services provided to schools 
          and other public facilities that have not been factored into 
          contractual agreements and would increase the costs of services 
          to public agencies.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Labor Federation, AFL-CIO
          California Teamsters Public Affairs Council (co-sponsor)
          Engineers and Scientists of California
          International Longshore and Warehouse Union
          Professional and Technical Engineers, Local 21
          State Building and Construction Trades Council (co-sponsor)
          Teamsters Local 853
          UNITE HERE!
          United Food and Commercial Workers Union, Western States Council

           Opposition 
          
          CR & R Incorporated
           
          Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091