BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 829| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 829 Author: Rubio (D), et al. Amended: 4/9/12 Vote: 21 PRIOR VOTES NOT RELEVANT ASSEMBLY FLOOR : Not available SUBJECT : Public contracts: public entities: project labor agreements SOURCE : State Building and Construction Trades Council of California DIGEST : This bill prohibits the use of state funds for any charter city construction projects if the charter city has banned the consideration of the use of project labor agreements (PLAs). Assembly Amendments delete the Senate version of the bill dealing with Occupational Safety and Health Appeals Board. This bill now deals with PLAs. ANALYSIS : Existing law sets forth the requirements for the solicitation and evaluation of bids and the awarding of contracts by public entities and authorizes a public entity to use, enter into, or require contractors to enter into, a project labor agreement for a construction project, if the agreement includes specified taxpayer protection CONTINUED SB 829 Page 2 provisions. Existing law also provides that if a charter provision, initiative, or ordinance of a charter city prohibits the governing board's consideration of a project labor agreement for a project to be awarded by the city, or prohibits the governing board from considering whether to allocate funds to a city-funded project covered by such an agreement, then state funding or financial assistance may not be used to support that project, as specified. This bill prohibits the use of state funds for any charter city construction projects if the charter city has banned the consideration of the use of PLAs. Specifically, this bill: 1. Provides that, if a charter provision, initiative, or ordinance of a charter city prohibits, limits, or constrains in any way the governing board's authority or discretion to adopt, require, or utilize a PLA that includes current-law taxpayer protection provisions for some or all of the construction projects to be awarded by the city, then state funding or financial assistance shall not be used to support any construction projects awarded by the city. 2. Provides that the above provision shall not be applicable until January 1, 2015, for charter cities in which a charter provision, initiative, or ordinance in effect prior to November 1, 2011, would disqualify a construction project from receiving state funding or financial assistance. Comments A PLA is a pre-hire agreement that establishes the terms and conditions of employment for a specific construction project. They are completed before any workers are hired to determine the wage rates and benefits of all employees working on the project and to agree to prevent any strikes, lockouts, or other work stoppages for the length of the project. The terms of the agreement apply to all contractors and subcontractors who successfully bid on the project, union or non-union, and supersede any existing collective bargaining agreements. CONTINUED SB 829 Page 3 PLAs are not mandated under California law. However, if a state or local agency chooses to use a PLA for a public construction project, the PLA must include minimum taxpayer-protection criteria. Governing boards of local agencies can choose by majority vote whether or not to use a PLA that includes these taxpayer-protection criteria. Governing boards of local agencies can also decide by majority vote whether or not to fund a project that includes such a PLA. Because of the home-rule provision of the California Constitution, this provision does not apply to charter cities. Local agencies, except charter cities, are also prohibited from adopting blanket prohibitions against using PLAs. Local governing boards have the authority to decide on a case-by-case basis whether to use PLAs. If a charter city has banned PLAs for a project to be awarded by the city, state financial assistance must not be used for that project. This provision becomes operable January 1, 2015, for charter cities that had ordinances in effect before November 1, 2011, that would disqualify a project from receiving state funding. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Assembly Appropriations Committee, this bill could result in a reallocation of state infrastructure funding, such as annual transportation funding for local streets and roads, to the extent a charter city has an ordinance banning PLAs in general and thus is no longer eligible for state funding after January 1, 2015. Charter cities that ban PLAs, in order to remain eligible for state funding after January 1, 2015, could incur costs to amend their charters to overturn such bans. For PLA bans adopted by ordinance, these costs will be minor. For PLA bans adopted by charter amendment or initiative, a city seeking to overturn the ban will incur the one-time costs of submitting the proposal to the voters for approval. These costs will not be state reimbursable. SUPPORT : (Verified 4/12/12) CONTINUED SB 829 Page 4 State Building and Construction Trades Council of California (source) Bay Area Chapter of the Sheet Metal and Air Conditioning Contractors National Association Bragg Crane and Rigging Co. Brice Mechanical, Inc. Building Trades Council of Kern, Inyo, & Mono Counties of California, AFL-CIO California BlueGreen Alliance California Chapters of the National Electrical Contractors Association California Labor Federation California Landscape and Irrigation Council California League of Conservation Voters California Legislative Conference of the Plumbing, Heating and Piping Industry California Nevada Conference of Operating Engineers California Professional Firefighters California Sheet Metal and Air Conditioning Contractors' National Assoc. California State Pipe Trades Council California Teamsters Public Affairs Council Cement Masons Local 300 Center for Sustainable Neighborhoods City of Oceanside Contra Costa Building and Construction Trades Council Councilmember Kevin McCarty, City of Sacramento Councilmember Xavier E. Campos, City of San Jose Councilmember Ash Kalra, City of San Jose Ella Baker Center on Human Rights Fresno, Madera, Kings and Tulare Counties Building and Construction Trades Council Imperial County Building and Construction Trades Council International Association of Heat and Frost Insulators Local 5 International Brotherhood of Boilermakers Local 92 International Brotherhood of Electrical Workers Local 11, 40, 180, 234, 413, 440, 441, 551, 569, 595, 617, 639, 952 International Brotherhood of Electrical Workers Ninth District International Union of Elevator Constructors Local 18 Iron Workers Local 155, 229, 416, 433 CONTINUED SB 829 Page 5 Jerry Thompson and Sons Painting, Inc. KBI Painting, Inc. Kern County Fire Fighters Union, Inc. L&H Airco Los Angeles Unified School District Los Angeles/Orange Counties Building and Construction Trades Council Mayor Antonio R. Villaraigosa, City of Los Angeles Metalclad Insulation Corporation Mid Valley Building and Construction Trades Council Napa-Solano Counties Building and Construction Trades Council North Bay Labor Council, AFL-CIO Northeastern California Building and Construction Trades Council Northern California Glass Management Association Northern California Painting and Finishing Contractors Association Painters and Allied Trades District Council 16-Local 741 Painters and Allied Trades District Council 36 Painters and Allied Trades Local 272 Painters and Allied Trades Local 3 Painters, Tapers, Floorcoverers and Glaziers District Council 16 Local 294 Plumbers and Pipefitters Local 447 Plumbers, Steamfitters and Refrigeration Fitters Local 467 Road Sprinkler Fitters Local 669 Sacramento-Sierra's Building and Construction Trades Council San Bernardino and Riverside Counties Building and Construction Trades Council San Diego and Imperial Counties Labor Council San Diego County Building and Construction Trades Council San Diego Unified School District San Joaquin, Calaveras, Amador and Alpine Counties Building and Construction Trades Council San Mateo County Building and Construction Trades Council Santa Clara and San Benito Counties Building and Construction Trades Council Sheet Metal Workers' Local Union No. 104 Sonoma, Mendocino and Lake Counties Building and Construction Trades Council Southern California Pipe Trades District Council 16 CONTINUED SB 829 Page 6 Sprinkler Fitters U.A. Local 709 United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada United Association of Plumbers and Steamfitters Local 230, 355, 398, 582 United Union of Roofers, Waterproofers, and Allied Workers Local 36, 81, 220 Ventura County Plumbers and Pipe Fitters Local 484 Western States Council Sheet Metal Workers' International Association OPPOSITION : (Verified 4/12/12) Associated Builders and Contractors of California California Chamber of Commerce City of Ventura League of California Cities Mayor of San Diego, Jerry Sanders ARGUMENTS IN SUPPORT : According to the author: This bill is necessary because anti-union groups/associations continue their campaign to eliminate the option for local governments to utilize PLAs...These are mainly political attacks because PLAs are negotiated on a project-by-project or funding source (i.e., bond) basis and PLAs are not mandated under any state laws. Anti-PLA/union lobbyists, mainly the Associated Builders and Contractors, pushed bans in a few counties (Stanislaus, Orange, San Diego) and Charter Cities (Chula Vista and Oceanside) based on intense lobbying and campaigns waged by non-union contractor organizations that voluntarily choose not to bid on projects governed by a PLA. SB 922, which the California Legislature passed and the Governor signed, effectively eliminated the PLA bans imposed by general law cities, counties and special districts. SB 922 also authorized all public entities to utilize a PLA if they meet the criteria of Public Code Section 2500. SB 922 provided, in CONTINUED SB 829 Page 7 Public Contract Code Section 2502, that charter cities that have ordinances that prevent the city council from considering the use of a PLA for a project cannot receive state funding for that specific project. SB 829 would extend the law by providing that charter cities that have ordinances that prevent the city council from considering the use of PLAs cannot receive state funding for any of their construction projects. ARGUMENTS IN OPPOSITION : The opponents argue that this bill prohibits state funding or financial assistance to be used on any project awarded by a charter city that has a provision, initiative, or ordinance that prohibits, limits, or constrains the authority or discretion to adopt, require, or utilize a PLA. A Dangerous Precedent . There is no need for the state to reach into local charter provisions, initiatives, and ordinances to dictate specific provisions, including PLAs. An Unnecessary State Law For A Local Issue . The use of a project labor agreement has become controversial in some areas of the state. Across California, cities are weighing both sides of the issue and making a decision on if and how to use PLAs based on what is best for their city. This is the most appropriate course for contracting for local public works projects. Thwarts the Will of the Voters . In each of the cities that this bill could impact (there are only three), the charter amendments and ordinances are a result of action by the voters. Therefore, this bill will thwart the will of the voters, and withhold funding in parts of the state in great need of economic growth supplied by infrastructure projects. PQ:do 4/12/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED SB 829 Page 8 CONTINUED