BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 922 HEARING: 9/9/11
AUTHOR: Steinberg FISCAL: Yes
VERSION: 9/8/11 TAX LEVY: No
CONSULTANT: Weinberger
PROJECT LABOR AGREEMENTS
Prohibits local charters, initiatives, and ordinances that
prevent local officials from using project labor agreements
(PLAs) and requires PLAs to include specified provisions.
Background and Existing Law
A project labor agreement (PLA) is an agreement that a
construction project's managers and its workers complete
before a project starts. PLAs establish the wage rates and
benefits of all employees working on the project and
prevent strikes, lockouts, or other work stoppages during
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.
Generally, the Local Agency Public Construction Act
requires local officials to invite bids for construction
projects and then award contracts to the lowest responsible
bidder. Some critics of PLAs want to ban their use for
public construction projects, arguing that PLA requirements
are inconsistent with the principle of awarding public
contracts to the lowest bidder. Voter-approved initiatives
have banned PLAs in San Diego County and in the Cities of
Chula Vista and Oceanside. Ordinances adopted by the
Fresno City Council, and Boards of Supervisors in Orange
County, Placer County, and Stanislaus County ban PLAs.
In response to these local bans, labor union officials want
to require local officials to make case-by-case decisions
on whether to use PLAs by prohibiting comprehensive local
bans against using PLAs.
Proposed Law
SB 922 -- 9/8/11 -- Page 2
Senate Bill 922 authorizes a public entity to use, enter
into, or require contractors to enter into, a project labor
agreement for a construction project only if the agreement
includes all five of the following taxpayer protection
provisions:
The agreement prohibits discrimination based on
race, national origin, religion, sex, sexual
orientation, political affiliation, or membership in a
labor organization in hiring and dispatching workers
for the project.
The agreement permits all qualified contractors and
subcontractors to bid for and be awarded work on the
project without regard to whether they are otherwise
parties to collective bargaining agreements.
The agreement contains an agreed-upon protocol
concerning drug testing for workers who will be
employed on the project.
The agreement contains guarantees against work
stoppages, strikes, lockouts, and similar disruptions
of the project.
The agreement provides that disputes arising from
the agreement shall be resolved by a neutral
arbitrator.
SB 922 defines a "public entity" as the state, county,
city, city and county, district, public authority, public
agency, municipal corporation, or any other political
subdivision or public corporation in the state.
The bill defines "project labor agreement" as a prehire
collective bargaining agreement that establishes the terms
and conditions of employment for a specific construction
project or projects and is an agreement described in a
specified federal statute governing agreements covering
employees in the building and construction industry.
SB 922 authorizes a local public entity's governing board
to choose by majority vote whether to use, enter into, or
require contractors to enter into a project labor agreement
that includes required taxpayer protection provisions for a
specific project or projects awarded by that entity and
whether to allocate funding to a specific project covered
by such an agreement. The bill prohibits any charter
provision, initiative, or ordinance that prevents the local
public entity's governing board from exercising this
SB 922 -- 9/8/11 -- Page 3
authority on a project-specific basis, except in charter
cities.
SB 922 prohibits a charter city from using state funding or
financial assistance to support a project if a charter
provision, initiative, or ordinance prohibits the city's
governing board from considering a project labor agreement
that includes required taxpayer protection provisions 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. For
a charter city with a charter provision, initiative, or
ordinance in effect before November 1, 2011, that would
disqualify a project from receiving state funding, the
bill's state funding prohibition does not apply until
January 1, 2015.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Project labor agreements are
valuable tools for creating local jobs, encouraging open
and fair competition, and ensuring the efficient use of
public funds. PLAs promote the efficient and timely
completion of construction projects by establishing common
work rules, schedules, and dispute resolution processes for
every worker on a project before construction starts and by
barring strikes, lockouts, and other disruptions. Because
PLAs are project-specific agreements that are crafted to
meet each community's particular needs, it makes sense to
consider their use on a case-by-case basis. Comprehensive
local bans on PLAs deny local officials the discretion to
use PLAs even when those officials conclude that an
agreement would benefit taxpayers. SB 922 doesn't require
a local government to enter into a PLA. SB 922 doesn't
prevent a local government from rejecting a PLA. It simply
ensures that local officials will have the option to use a
PLA for a particular project if they want to.
2. Local control . Local voters elect county supervisors,
city council members, and special district board members to
SB 922 -- 9/8/11 -- Page 4
make public policy in response to local needs. Decisions
about how local governments contract for public
construction projects are best made by local officials and
the voters who elect them. A local ordinance banning PLAs
can be amended or repealed by the local governing board
that adopted the ordinance. Voter-approved local
initiatives can prohibit local officials from using PLAs.
Why should state legislators prevent local voters from
determining the rules that apply to their local
governments' construction contracts? Why should state law
prevent local officials from entering into a PLA that meets
their community's needs, but doesn't include a drug-testing
protocol? The Committee may wish to consider whether SB
922 substitutes an arbitrary, one-size-fits-all standard
for local officials' informed judgments about their
communities.
3. Not charter cities ? The California Constitution lets
charter cities control their municipal affairs. The 120
charter cities must follow statewide laws only for issues
of statewide concern when the Legislature has fully
occupied the field. The courts -- not the Legislature --
interpret the Constitution and decide what's a municipal
affair and what's an issue of statewide concern. Although
SB 922 declares that taxpayers' interests are best served
by ensuring that PLAs contain fundamental taxpayer
protections, the bill doesn't declare that including those
protections in project labor agreements is an issue of
statewide concern. As a result, the requirement that all
project labor agreements must contain five specified
provisions may not apply to charter cities. If the
Legislature wants SB 922 to control charter cities, then it
should insert a specific declaration that the Legislature
considers the inclusion of taxpayer protection provision in
project labor agreements to be an issue of statewide
concern and insert a persuasive recital of legislative
findings to bolster that claim. Even then, the courts must
agree.
4. Gut-and-amend . When the Senate passed SB 922 on May 9,
2011, the bill added tuberculosis screening results to the
list of information that local health departments and the
State Department of Public Health may collect for
immunization information systems. The September 2 Assembly
amendments deleted that language and converted the bill
into a measure imposing requirements on state and local
SB 922 -- 9/8/11 -- Page 5
project labor agreements. Because this topic was never
heard in the Senate, the Senate Rules Committee referred
the amended bill under Senate Rule 29.10 to the Senate
Governance and Finance Committee for a hearing on the
Assembly's amendments. At its September 9 hearing, the
Committee has four choices:
Send the bill back to the Senate Floor,
recommending concurrence.
Send the bill back to the Senate Floor,
recommending nonconcurrence.
Send the bill back to the Senate Floor, without
recommendation.
Hold the bill.
Assembly Actions
Assembly Business, Professions, and Consumer Protection
Committee: 6-3
Assembly Appropriations Committee: 10-5
Assembly Floor:
51-26
Support and Opposition (9/8/11)
Support : State Building and Construction Trades Council of
California; Alameda Building and Construction Trades
Council; Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers, and Helpers; Bricklayers and Allied Craftworkers
(BAC); California Labor Federation; California Legislative
Conference of the Plumbing, Heating, and Piping Industry;
California Nevada Conference of Operating Engineers; Contra
Costa Building and Construction Trades Council; Elevator
Constructors, Heat and Frost Insulators and Allied Workers;
Fresno, Madera, Tulare, Kings Building and Construction
Trades Council; Humboldt/Del Norte Building and
Construction Trades Council; International Brotherhood of
Electrical Workers (IBEW); Ironworkers (IRON); Kern, Inyo
Mono Building and Construction Trades Council; Los Angeles
Metropolitan Transportation Authority; Los Angeles/Orange
Building and Construction Trades Council; Marin Building
and Construction Trades Council; Mid-Valley Building and
Construction Trades Council; Monterey Building and
Construction Trades Council; Napa/Solano Building and
Construction Trades Council; National Electrical
SB 922 -- 9/8/11 -- Page 6
Contractors Association (NECA); Operative Plasterers and
Cement Masons (OPCMIA); Painters and Allied Trades (IUPAT);
Roofers, Waterproofers, and Allied Workers;
Sacramento/Sierra Building and Construction Trades Council;
San Bernardino/Riverside Building and Construction Trades
Council; San Diego Building and Construction Trades
Council; San Francisco Building and Construction Trades
Council; San Joaquin Building and Construction Trades
Council; San Mateo Building and Construction Trades
Council; Santa Clara Building and Construction Trades
Council; Shasta/Trinity/Lassen/Tehama Building and
Construction Trades Council; Sonoma/Mendocino/Lake Building
and Construction Trades Council; Sheet Metal and Air
Conditioning Contractors Associations (SMACNA); Sheet Metal
Workers (SMWIA); Stanislaus/Merced Building and
Construction Trades Council; Teamsters; Tri-Counties
Building and Construction Trades Council; United
Association (Plumbers and Pipefitters); Southern California
District Council of Laborers.
Opposition : Associated Builders and Contractors of
California; Associated General Contractors; California
Fence Contractors Association; California Chapter of the
American Fence Association; Engineering Contractors
Association; the Flasher Barricade Association; Marin
Builders Association; Southern California Contractors
Association.