BILL NUMBER: AB 987 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Grove
FEBRUARY 18, 2011
An act to add Section 35169 to the Education Code, to amend
Section 63036 of the Government Code, and to amend Sections 1720,
1720.4, 1771, 1772, 1777.5 of, to add Sections 1771.1 and 1771.15 to,
and to repeal Section 1720.3 of, the Labor Code, relating to public
works.
LEGISLATIVE COUNSEL'S DIGEST
AB 987, as introduced, Grove. Public works: prevailing wages.
Existing law defines the term "public works" for purposes of
requirements regarding the payment of prevailing wages, the
regulation of working hours, and the securing of workers'
compensation for public works projects. Existing law further requires
that, except as specified, not less than the general prevailing rate
of per diem wages be paid to workers employed on public works
projects, and imposes misdemeanor penalties for a violation of this
requirement. Existing law exempts certain projects from the
prevailing wage requirements, including public works projects of less
than $1,000.
This bill would specify that workers must be employed directly at
the site of the work to be deemed employed upon public work. The bill
would exempt from the prevailing wage requirements public projects
of less than $100,000. The bill would also exempt from the prevailing
wage requirements the governing board of a school district with
regard to the construction, reconstruction, or rehabilitation of
school facilities, any fabrication or prefabrication work done at a
permanent offsite facilities of a contractor, a public work project
of a local agency that adopts a resolution or ordinance, as
specified, workers employed on a hospital seismic retrofitting
project. The bill would also exempt from the definition of "public
works," for purposes of the prevailing wage requirements, work
performed during the design and preconstruction phases of
construction, including inspection and land surveying work and would
delete provisions of existing law specifying that "public works"
includes the hauling of refuse from a public works site to an outside
disposal location. This bill would delete from existing law
exclusions from the requirements of public works and prevailing wage
laws for work done on certain private development projects,
affordable housing units for low- or moderate-income persons,
privately-owned residential projects, qualified residential rental
projects, single-family residential projects, and low-income housing
projects.
Existing law, the Bergeson-Peace Infrastructure and Economic
Development Bank Act, establishes the California Infrastructure and
Economic Development Bank in the Trade and Commerce Agency, which
requires public works financed by the bank to comply with those laws
relating to payment of prevailing wages.
This bill would remove the requirement that public works financed
under that act comply with the prevailing wage requirements.
Existing law, until January 1, 2012, specifies that the prevailing
wage requirement does not apply to work performed on or after
January 1, 2002, by a volunteer, a volunteer coordinator, or a member
of the California Conservation Corps or of a certified community
conservation corps, as defined.
This bill would delete the January 1, 2012, date upon which this
provision is repealed thus extending this provision indefinitely.
Existing law imposes specified requirements on contracts of
$30,000 or more of general contractors or specialty contractors with
regard to the use of apprentices or journeymen on public works
projects.
This bill would instead impose these requirements on contracts of
$100,000 or more.
Because this bill would expand the application of the prevailing
wage requirements, the violation of which are a crime, it would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 35169 is added to the Education Code, to read:
35169. The governing board of a school district is not required
to comply with the wage requirements of Section 1771 of the Labor
Code, or the successor to that section or any other requirement for
the payment of prevailing wages, with regard to the construction,
reconstruction, or rehabilitation of school facilities, except to the
extent required by federal law.
SEC. 2. Section 63036 of the Government Code is amended to read:
63036. It is the intent of the Legislature that the activities of
the bank be fully coordinated with any future legislative plan
involving growth management strategies designed to protect California'
s land resource, and ensure its preservation and use it in ways which
are economically and socially desirable. Further, all
public works financed pursuant to this division, including those
projects financed through the use of industrial development bonds
under Title 10 (commencing with Section 91500), shall comply with
Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of
the Labor Code.
SEC. 3. Section 1720 of the Labor Code is amended to read:
1720. (a) As used in this chapter, "public works" means:
(1) Construction, alteration, demolition, installation, or repair
work done under contract and paid for in whole or in part out of
public funds, except work done directly by any public utility company
pursuant to order of the Public Utilities Commission or other public
authority. For purposes of this paragraph, "construction"
includes does not include work performed during
the design and preconstruction phases of construction including, but
not limited to, inspection and land surveying work.
(2) Work done for irrigation, utility, reclamation, and
improvement districts, and other districts of this type. "Public work"
does not include the operation of the irrigation or drainage system
of any irrigation or reclamation district, except as used in Section
1778 relating to retaining wages.
(3) Street, sewer, or other improvement work done under the
direction and supervision or by the authority of any officer or
public body of the state, or of any political subdivision or district
thereof, whether the political subdivision or district operates
under a freeholder's charter or not.
(4) The laying of carpet done under a building lease-maintenance
contract and paid for out of public funds.
(5) The laying of carpet in a public building done under contract
and paid for in whole or in part out of public funds.
(6) Public transportation demonstration projects authorized
pursuant to Section 143 of the Streets and Highways Code.
(b) For purposes of this section, "paid for in whole or in part
out of public funds" means all of the following:
(1) The payment of money or the equivalent of money by the state
or political subdivision directly to or on behalf of the public works
contractor, subcontractor, or developer.
(2) Performance of construction work by the state or political
subdivision in execution of the project.
(3) Transfer by the state or political subdivision of an asset of
value for less than fair market price.
(4) Fees, costs, rents, insurance or bond premiums, loans,
interest rates, or other obligations that would normally be required
in the execution of the contract, that are paid, reduced, charged at
less than fair market value, waived, or forgiven by the state or
political subdivision.
(5) Money loaned by the state or political subdivision that is to
be repaid on a contingent basis.
(6) Credits that are applied by the state or political subdivision
against repayment obligations to the state or political subdivision.
(c) Notwithstanding subdivision (b):
(1) Private residential projects built on private property are not
subject to the requirements of this chapter unless the projects are
built pursuant to an agreement with a state agency, redevelopment
agency, or local public housing authority.
(2) If the state or a political subdivision requires a private
developer to perform construction, alteration, demolition,
installation, or repair work on a public work of improvement as a
condition of regulatory approval of an otherwise private development
project, and the state or political subdivision contributes no more
money, or the equivalent of money, to the overall project than is
required to perform this public improvement work, and the state or
political subdivision maintains no proprietary interest in the
overall project, then only the public improvement work shall thereby
become subject to this chapter.
(3) If the state or a political subdivision reimburses a private
developer for costs that would normally be borne by the public, or
provides directly or indirectly a public subsidy to a private
development project that is de minimis in the context of the project,
an otherwise private development project shall not thereby become
subject to the requirements of this chapter.
(4) The construction or rehabilitation of affordable housing units
for low- or moderate-income persons pursuant to paragraph (5) or (7)
of subdivision (e) of Section 33334.2 of the Health and Safety Code
that are paid for solely with moneys from a Low and Moderate Income
Housing Fund established pursuant to Section 33334.3 of the Health
and Safety Code or that are paid for by a combination of private
funds and funds available pursuant to Section 33334.2 or 33334.3 of
the Health and Safety Code do not constitute a project that is paid
for in whole or in part out of public funds.
(5) "Paid for in whole or in part out of public funds" does not
include tax credits provided pursuant to Section 17053.49 or 23649 of
the Revenue and Taxation Code.
(6) Unless otherwise required by a public funding program, the
construction or rehabilitation of privately owned residential
projects is not subject to the requirements of this chapter if one or
more of the following conditions are met:
(A) The project is a self-help housing project in which no fewer
than 500 hours of construction work associated with the homes are to
be performed by the homebuyers.
(B) The project consists of rehabilitation or expansion work
associated with a facility operated on a not-for-profit basis as
temporary or transitional housing for homeless persons with a total
project cost of less than twenty-five thousand dollars ($25,000).
(C) Assistance is provided to a household as either mortgage
assistance, downpayment assistance, or for the rehabilitation of a
single-family home.
(D) The project consists of new construction, or expansion, or
rehabilitation work associated with a facility developed by a
nonprofit organization to be operated on a not-for-profit basis to
provide emergency or transitional shelter and ancillary services and
assistance to homeless adults and children. The nonprofit
organization operating the project shall provide, at no profit, not
less than 50 percent of the total project cost from nonpublic
sources, excluding real property that is transferred or leased. Total
project cost includes the value of donated labor, materials,
architectural, and engineering services.
(E) The public participation in the project that would otherwise
meet the criteria of subdivision (b) is public funding in the form of
below-market interest rate loans for a project in which occupancy of
at least 40 percent of the units is restricted for at least 20
years, by deed or regulatory agreement, to individuals or families
earning no more than 80 percent of the area median income.
(d) Notwithstanding any provision of this section to the contrary,
the following projects shall not, solely by reason of this section,
be subject to the requirements of this chapter:
(1) Qualified residential rental projects, as defined by Section
142 (d) of the Internal Revenue Code, financed in whole or in part
through the issuance of bonds that receive allocation of a portion of
the state ceiling pursuant to Chapter 11.8 of Division 1 (commencing
with Section 8869.80) of the Government Code on or before December
31, 2003.
(2) Single-family residential projects financed in whole or in
part through the issuance of qualified mortgage revenue bonds or
qualified veterans' mortgage bonds, as defined by Section 143 of the
Internal Revenue Code, or with mortgage credit certificates under a
Qualified Mortgage Credit Certificate Program, as defined by Section
25 of the Internal Revenue Code, that receive allocation of a portion
of the state ceiling pursuant to Chapter 11.8 of Division 1
(commencing with Section 8869.80) of the Government Code on or before
December 31, 2003.
(3) Low-income housing projects that are allocated federal or
state low-income housing tax credits pursuant to Section 42 of the
Internal Revenue Code, Chapter 3.6 of Division 31 (commencing with
Section 50199.4) of the Health and Safety Code, or Section 12206,
17058, or 23610.5 of the Revenue and Taxation Code, on or before
December 31, 2003.
(e) If a statute, other than this section, or a regulation, other
than a regulation adopted pursuant to this section, or an ordinance
or a contract applies this chapter to a project, the exclusions set
forth in subdivision (d) do not apply to that project.
(f) For purposes of this section, references to the Internal
Revenue Code mean the Internal Revenue Code of 1986, as amended, and
include the corresponding predecessor sections of the Internal
Revenue Code of 1954, as amended.
(g) The amendments made to this section by either Chapter 938 of
the Statutes of 2001 or the act adding this subdivision shall not be
construed to preempt local ordinances requiring the payment of
prevailing wages on housing projects.
SEC. 4. Section 1720.3 of the Labor Code is repealed.
1720.3. For the limited purposes of Article 2 (commencing with
Section 1770), "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, including the California State
University and the University of California, or any political
subdivision of the state.
SEC. 5. Section 1720.4 of the Labor Code is amended to read:
1720.4. (a) This chapter shall not apply to any of the following
work:
(1) Any work performed by a volunteer. For purposes of this
section, "volunteer" means an individual who performs work for civic,
charitable, or humanitarian reasons for a public agency or
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, without promise, expectation, or
receipt of any compensation for work performed.
(A) An individual shall be considered a volunteer only when his or
her services are offered freely and without pressure and coercion,
direct or implied, from an employer.
(B) An individual may receive reasonable meals, lodging,
transportation, and incidental expenses or nominal nonmonetary awards
without losing volunteer status if, in the entire context of the
situation, those benefits and payments are not a substitute form of
compensation for work performed.
(C) An individual shall not be considered a volunteer if the
person is otherwise employed for compensation at any time (i) in the
construction, alteration, demolition, installation, repair, or
maintenance work on the same project, or (ii) by a contractor, other
than a corporation qualified under Section 501(c)(3) of the Internal
Revenue Code as a tax-exempt organization, that is receiving payment
to perform construction, alteration, demolition, installation,
repair, or maintenance work on the same project.
(2) Any work performed by a volunteer coordinator. For purposes of
this section, "volunteer coordinator" means an individual paid by a
corporation qualified under Section 501(c)(3) of the Internal Revenue
Code as a tax-exempt organization, to oversee or supervise
volunteers. An individual may be considered a volunteer coordinator
even if the individual performs some nonsupervisory work on a project
alongside the volunteers, so long as the individual's primary
responsibility on the project is to oversee or supervise the
volunteers rather than to perform nonsupervisory work.
(3) Any work performed by members of the California Conservation
Corps or of Community Conservation Corps certified by the California
Conservation Corps pursuant to Section 14507.5 of the Public
Resources Code.
(b) This section shall apply retroactively to otherwise covered
work concluded on or after January 1, 2002, to the extent permitted
by law.
(c) On or before January 1, 2011, the director shall submit a
written report to the Legislature that does both of the following:
(1) Describes the number and the nature of complaints received and
investigations conducted involving the use of volunteers on public
works projects subject to this chapter, that are projects as
described in Section 21190 of the Public Resources Code.
(2) Provides an estimate of each of the following as they relate
to public works projects that involve the acquisition, presentation,
or restoration of natural areas, including parks or ecological
reserves, or other public works projects that have one or more of the
purposes, as described in Section 21190 of the Public Resources
Code:
(A) The number of hours per year that volunteers work on public
works projects.
(B) The cost per year of public works projects, that are projects
as described in Section 21190 of the Public Resources Code, and the
percentage of work performed by volunteers.
(C) The types of work done by volunteers on public works projects,
that are projects as described in Section 21190 of the Public
Resources Code.
(d) The sum of one hundred thousand dollars ($100,000) is hereby
appropriated from the Environmental License Plate Fund for the
purposes of funding the report required pursuant to subdivision (c).
(e) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2012, deletes or extends
that date.
SEC. 6. Section 1771 of the Labor Code is amended to read:
1771. (a) Except for public works projects
of one hundred thousand dollars ($1,000)
($100,000) or less, not less than the general
prevailing rate of per diem wages for work of a similar character in
the locality in which the public work is performed, and not less than
the general prevailing rate of per diem wages for holiday and
overtime work fixed as provided in this chapter, shall be paid to all
workers employed on public works.
This
(b) This section is applicable
only to work performed under contract, and is not applicable to work
carried out by a public agency with its own forces. This
(c) This section is applicable to
contracts let for maintenance work.
(d) This section does not apply to fabrication or prefabrication
work that is done at permanent offsite facilities of contractors.
(e) This section does not apply to a public work project of a
local agency, as defined in Section 1771.1, that adopts a resolution
or ordinance pursuant to that section, unless the payment of not less
than the general prevailing rate of per diem wages is required under
a state or federal grant.
SEC. 7. Section 1771.1 is added to the Labor Code, to read:
1771.1. The governing body of a local agency, whether charter or
general law, may adopt, by the affirmative vote of a majority of its
members, a resolution or ordinance providing that the wage
requirements of Section 1771 shall apply to any public work of that
local agency only if required by a state or federal grant. For
purposes of this section, "local agency" means any city, county, city
and county, special district, redevelopment agency, transit
district, school district, community college district, water
district, hospital district, or fire district, or any joint powers
authority whose voting members consist entirely of any combination of
any of those entities.
SEC. 8. Section 1771.15 is added to the Labor Code, to read:
1771.15. Notwithstanding any other law, workers employed on a
hospital seismic retrofitting project are not required to be paid
either the general prevailing rate of per diem wages, or the general
prevailing rate of per diem wages for holiday and overtime work, for
work of a similar character in the locality in which the project is
performed.
SEC. 9. Section 1772 of the Labor Code is amended to read:
1772. Workers , as defined in Section 1723, who a
re employed directly at the site of the work by
contractors or subcontractors in the execution of any contract for
public work are deemed to be employed upon public work.
SEC. 10. Section 1777.5 of the Labor Code is amended to read:
1777.5. (a) Nothing in this chapter shall prevent the employment
of properly registered apprentices upon public works.
(b) Every apprentice employed upon public works shall be paid the
prevailing rate of per diem wages for apprentices in the trade to
which he or she is registered and shall be employed only at the work
of the craft or trade to which he or she is registered.
(c) Only apprentices, as defined in Section 3077, who are in
training under apprenticeship standards that have been approved by
the Chief of the Division of Apprenticeship Standards and who are
parties to written apprentice agreements under Chapter 4 (commencing
with Section 3070) of Division 3 are eligible to be employed at the
apprentice wage rate on public works. The employment and training of
each apprentice shall be in accordance with either of the following:
(1) The apprenticeship standards and apprentice agreements under
which he or she is training.
(2) The rules and regulations of the California Apprenticeship
Council.
(d) When the contractor to whom the contract is awarded by the
state or any political subdivision, in performing any of the work
under the contract, employs workers in any apprenticeable craft or
trade, the contractor shall employ apprentices in at least the ratio
set forth in this section and may apply to any apprenticeship program
in the craft or trade that can provide apprentices to the site of
the public work for a certificate approving the contractor under the
apprenticeship standards for the employment and training of
apprentices in the area or industry affected. However, the decision
of the apprenticeship program to approve or deny a certificate shall
be subject to review by the Administrator of Apprenticeship. The
apprenticeship program or programs, upon approving the contractor,
shall arrange for the dispatch of apprentices to the contractor. A
contractor covered by an apprenticeship program's standards shall not
be required to submit any additional application in order to include
additional public works contracts under that program.
"Apprenticeable craft or trade," as used in this section, means a
craft or trade determined as an apprenticeable occupation in
accordance with rules and regulations prescribed by the California
Apprenticeship Council. As used in this section, "contractor"
includes any subcontractor under a contractor who performs any public
works not excluded by subdivision (o).
(e) Prior to commencing work on a contract for public works, every
contractor shall submit contract award information to an applicable
apprenticeship program that can supply apprentices to the site of the
public work. The information submitted shall include an estimate of
journeyman hours to be performed under the contract, the number of
apprentices proposed to be employed, and the approximate dates the
apprentices would be employed. A copy of this information shall also
be submitted to the awarding body if requested by the awarding body.
Within 60 days after concluding work on the contract, each contractor
and subcontractor shall submit to the awarding body, if requested,
and to the apprenticeship program a verified statement of the
journeyman and apprentice hours performed on the contract. The
information under this subdivision shall be public. The
apprenticeship programs shall retain this information for 12 months.
(f) The apprenticeship program that can supply apprentices to the
area of the site of the public work shall ensure equal employment and
affirmative action in apprenticeship for women and minorities.
(g) The ratio of work performed by apprentices to journeymen
employed in a particular craft or trade on the public work may be no
higher than the ratio stipulated in the apprenticeship standards
under which the apprenticeship program operates where the contractor
agrees to be bound by those standards, but, except as otherwise
provided in this section, in no case shall the ratio be less than one
hour of apprentice work for every five hours of journeyman work.
(h) This ratio of apprentice work to journeyman work shall apply
during any day or portion of a day when any journeyman is employed at
the jobsite and shall be computed on the basis of the hours worked
during the day by journeymen so employed. Any work performed by a
journeyman in excess of eight hours per day or 40 hours per week
shall not be used to calculate the ratio. The contractor shall employ
apprentices for the number of hours computed as above before the end
of the contract or, in the case of a subcontractor, before the end
of the subcontract. However, the contractor shall endeavor, to the
greatest extent possible, to employ apprentices during the same time
period that the journeymen in the same craft or trade are employed at
the jobsite. Where an hourly apprenticeship ratio is not feasible
for a particular craft or trade, the Chief of the Division of
Apprenticeship Standards, upon application of an apprenticeship
program, may order a minimum ratio of not less than one apprentice
for each five journeymen in a craft or trade classification.
(i) A contractor covered by this section that has agreed to be
covered by an apprenticeship program's standards upon the issuance of
the approval certificate, or that has been previously approved for
an apprenticeship program in the craft or trade, shall employ the
number of apprentices or the ratio of apprentices to journeymen
stipulated in the applicable apprenticeship standards, but in no
event less than the 1-to-5 ratio required by subdivision (g).
(j) Upon proper showing by a contractor that he or she employs
apprentices in a particular craft or trade in the state on all of his
or her contracts on an annual average of not less than one hour of
apprentice work for every five hours of labor performed by
journeymen, the Chief of the Division of Apprenticeship Standards may
grant a certificate exempting the contractor from the 1-to-5 hourly
ratio, as set forth in this section for that craft or trade.
(k) An apprenticeship program has the discretion to grant to a
participating contractor or contractor association a certificate,
which shall be subject to the approval of the Administrator of
Apprenticeship, exempting the contractor from the 1-to-5 ratio set
forth in this section when it finds that any one of the following
conditions is met:
(1) Unemployment for the previous three-month period in the area
exceeds an average of 15 percent.
(2) The number of apprentices in training in the area exceeds a
ratio of 1 to 5.
(3) There is a showing that the apprenticeable craft or trade is
replacing at least one-thirtieth of its journeymen annually through
apprenticeship training, either on a statewide basis or on a local
basis.
(4) Assignment of an apprentice to any work performed under a
public works contract would create a condition that would jeopardize
his or her life or the life, safety, or property of fellow employees
or the public at large, or the specific task to which the apprentice
is to be assigned is of a nature that training cannot be provided by
a journeyman.
(l) When an exemption is granted pursuant to subdivision (k) to an
organization that represents contractors in a specific trade from
the 1-to-5 ratio on a local or statewide basis, the member
contractors shall not be required to submit individual applications
for approval to local joint apprenticeship committees, if they are
already covered by the local apprenticeship standards.
(m) (1) A contractor to whom a contract is awarded, who, in
performing any of the work under the contract, employs journeymen or
apprentices in any apprenticeable craft or trade shall contribute to
the California Apprenticeship Council the same amount that the
director determines is the prevailing amount of apprenticeship
training contributions in the area of the public works site. A
contractor may take as a credit for payments to the council any
amounts paid by the contractor to an approved apprenticeship program
that can supply apprentices to the site of the public works project.
The contractor may add the amount of the contributions in computing
his or her bid for the contract.
(2) At the conclusion of the 2002-03 fiscal year and each fiscal
year thereafter, the California Apprenticeship Council shall
distribute training contributions received by the council under this
subdivision, less the expenses of the Division of Apprenticeship
Standards for administering this subdivision, by making grants to
approved apprenticeship programs for the purpose of training
apprentices. The funds shall be distributed as follows:
(A) If there is an
approved multiemployer apprenticeship program serving the same craft
or trade and geographic area for which the training contributions
were made to the council, a grant to that program shall be made.
(B) If there are two or more approved multiemployer apprenticeship
programs serving the same craft or trade and geographic area for
which the training contributions were made to the council, the grant
shall be divided among those programs based on the number of
apprentices registered in each program.
(C) All training contributions not distributed under subparagraphs
(A) and (B) shall be used to defray the future expenses of the
Division of Apprenticeship Standards.
(3) All training contributions received pursuant to this
subdivision shall be deposited in the Apprenticeship Training
Contribution Fund, which is hereby created in the State Treasury.
Upon appropriation by the Legislature, all money in the
Apprenticeship Training Contribution Fund shall be used for the
purpose of carrying out this subdivision and to pay the expenses of
the Division of Apprenticeship Standards.
(n) The body awarding the contract shall cause to be inserted in
the contract stipulations to effectuate this section. The
stipulations shall fix the responsibility of compliance with this
section for all apprenticeable occupations with the prime contractor.
(o) This section does not apply to contracts of general
contractors or to contracts of specialty contractors not bidding for
work through a general or prime contractor when the contracts of
general contractors or those specialty contractors involve
are less than thirty one
hundred thousand dollars ($30,000)
($100,000) .
(p) All decisions of an apprenticeship program under this section
are subject to Section 3081.
SEC. 11. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.