BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 922
                                                                  Page  1

          Date of Hearing:   September 7, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

              SB 922 (Negrete-McLeod) - As Amended:  September 2, 2011 

          Policy Committee:                              Business and 
          Professions  Vote:                            6-3

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill requires that all project labor agreements (PLAs) 
          incorporate specified provisions, and prohibits state funding 
          assistance, after January 1, 2015, on public works projects of 
          charter cities having ordinances prohibiting the use of PLAs. 
          Specifically, this bill:

          1)Requires a PLA on a public works project of any state or local 
            government entity to incorporate all of the following 
            provisions:

             a)   Prohibit discrimination based on race, national origin, 
               sex, sexual orientation, political affiliation, or 
               membership in a labor organization.

             b)   Permit qualified contractors and subcontractors to bid 
               regardless of whether they are part of a collective 
               bargaining agreement.

             c)   Contain drug-testing protocol and guarantee against work 
               stoppages, strikes, lockouts, and similar project 
               disruptions.

             d)   Require disputes over the PLA to be resolved by a 
               neutral arbitrator.

          2)Authorizes the governing boards of local public entities, by 
            majority vote, to use PLAs, and stipulates that charter 
            provisions, initiatives, or ordinances do not prevent 
            governing bodies, except charter cities, from exercising this 
            authority on a project-specific basis.








                                                                  SB 922
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          3)Stipulates that, if a charter city has a charter provision, 
            initiative, or ordinance prohibiting its governing board from 
            entering into a PLA for a project, then state funding or 
            financial assistance may not be used to support that project. 
            For charter cities with such a charter provision, initiative, 
            or ordinance in effect prior to November 1, 2011, this 
            prohibition on state funding would not be applicable until 
            January 1, 2015.

           FISCAL EFFECT  

          1)Any state costs to incorporate the required provisions in PLAs 
            on state projects should be minor. Based on information 
            received at the time of this analysis, state agencies seldom 
            use PLAs.

          2)Any costs for local governments would be non-reimbursable, as 
            the bill authorizes, but does not require, the use of PLAs.

          Charter cities with PLA prohibitions adopted by charter 
          amendment or initiative, that seek to maintain eligibility for 
          state funding assistance on city projects after January 1, 2015 
          would incur the costs of an election seeking voter approval to 
          repeal those prohibitions. Again, these costs would not be state 
          reimbursable.

           COMMENTS  

           1)Background  . A PLA is a pre-hire agreement establishing the 
            terms and conditions of employment for a specific construction 
            project. PLAs are completed before any workers are hired, to 
            establish the wage rates and benefits of all employees working 
            on the project and to prevent strikes, lockouts, or other work 
            stoppages for the length of the project.  The terms of the 
            agreement apply to all contractors and subcontractors, whether 
            union or non-union, who successfully bid on the project, and 
            supersede any existing collective bargaining agreements.

           2)Purpose  . According to the author, this bill stems from recent 
            campaigns to obtain blanket prohibitions on PLAs through local 
            charter amendments, initiatives and ordinances.  Bans on PLAs 
            have been enacted by voter initiatives in San Diego County and 
            in the Cities of Chula Vista and Oceanside and through 
            ordinances adopted by the governing boards of Orange and 








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            Stanislaus Counties. Proponents argue these blanket 
            prohibitions prevent local governing boards from choosing to 
            use a PLA even if the governing board decides a PLA would be 
            cost-beneficial. 

            The author states, "PLAs can help projects meet deadlines by 
            guaranteeing a steady supply of highly skilled labor and by 
            reconciling the various work routines of the many trades.  
            PLAs also help to assure timely completion by keeping projects 
            free from disruptions resulting from local labor disputes, 
            grievances, or jurisdictional issues.  Language in PLAs can be 
            written to advance important policy goals, such as improving 
            training and recruiting members of disadvantaged communities 
            into high-paying jobs in construction."

           3)Support  . At the time of this analysis, the bill was supported 
            by the State Building and Construction Trades Council of 
            California, other labor associations, and a few contractor 
            organizations. Proponents note that SB 922 intends to make 
            clear that non-union contractors can be awarded contracts 
            under a PLA and that workers on a PLA would not be forced to 
            join a union.

           4)Opponents  include the League of California Cities and several 
            contractor organizations. Opponents cite process issues, 
            related to the bill's recent amendments, and interference with 
            local control and voter-approved initiatives.

           5)Proposed author's amendments  change the author to Steinberg 
            and add co-authors.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081