BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                  AB 514
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          AB 514 (Roger HernŠndez)
          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 


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            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 "›c]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.


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

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