BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 829|
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                              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 
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          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.


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          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)


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          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

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          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

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          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 

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             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

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