BILL ANALYSIS Ó AB 514 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 514 (Roger Hernández) As Amended August 23, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |52-26|(May 23, 2011) |SENATE: |24-13|(August 30, | | | | | | |2011) | ----------------------------------------------------------------- Original Committee Reference: L. & E. SUMMARY : Clarifies the definition of "hauling of refuse" for purposes of prevailing wage law. The Senate amendments : 1)Provide that "hauling of refuse" includes, but is not limited to, hauling soil, sand, gravel, rocks, concrete, asphalt, excavation materials, and construction debris. 2)Specify that "hauling of refuse" shall not include the hauling of recyclable metals such as copper, steel, and aluminum that have been separated from other materials at the jobsite prior to the transportation and that are to be sold at fair market value to a bona fide purchaser. 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) 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. AS PASSED BY THE ASSEMBLY , this bill: 1)Provided that "hauling of refuse" includes the hauling of AB 514 Page 2 materials other than bona fide commodities sold at fair market value from a public works site. 2)Specified that a "bona fide commodity" is a commodity for which there exists a publicly-traded commodity market, such as copper, steel or aluminum. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : As discussed above, existing 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." This bill 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 work site to an offsite location. Although the statutory provision exists, the sponsors contend that many workers do not receive the wages 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 recyclable materials sold at fair market value would be deemed not to constitute "refuse." 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 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. AB 514 Page 3 Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091 FN: 0002086