BILL ANALYSIS Ó
SB 136
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Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 136 (Yee) - As Amended: August 15, 2011
Policy Committee: Education Vote:5-2
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill expands the definition of public work to include work
done under private contract when all of the following conditions
exist:
1)The work is performed in connection with the construction or
maintenance of renewable energy generating capacity or energy
efficiency improvements.
2)The work is performed on the property of the state or a
political subdivision of the state.
3)Either of the following conditions exist:
a) More than 50% of the energy generated is purchased or
will be purchased by the state or a political subdivision
of the state.
b) The energy efficiency improvements are primarily
intended to reduce energy costs that would otherwise be
incurred by the state or political subdivision of the
state.
FISCAL EFFECT
To the extent local governments are not currently paying a
prevailing wage on energy service contracts, local contract
costs may increase; these costs; however, are not reimbursable.
COMMENTS
1)Rationale . Existing law authorizes a public agency to enter
into an energy service contract and any necessarily related
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facility ground lease on terms that its governing body
determines are in the best interest of the public agency, as
specified.
Statute also defines energy service contract as a contract
entered into by a public agency with any person whereby the
person will provide electrical or thermal energy or
conservation services to a public agency from an energy
conservation facility.
An energy service contract is also known as energy performance
contracting. This type of contract is an agreement between a
public entity and an energy service company to provide a
funding mechanism for new energy-efficient equipment and
services. Under this contract, an energy service company will
conduct an inspection and recommend to the public entity
various physical improvements to ensure energy efficiency. The
energy service company generally projects these efficiency
savings will meet or exceed annual payments made by the public
entity for improvements.
This bill expands the definition of public works to ensure
work performed under an energy service contract complies with
prevailing wage provisions.
2)Existing law requires the prevailing wage rate to be paid to
workers on public works projects over $1,000. Statute defines
public works as 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, as specified.
3)Related legislation . AB 436 (Solorio), pending on the Senate
Floor, provides that specified work related to renewable
energy generation is considered public works for purposes of
prevailing wage law.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081
SB 136
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