Amended in Senate June 3, 2014

Amended in Senate March 18, 2014

Amended in Senate June 25, 2013

Amended in Assembly May 28, 2013

Amended in Assembly April 22, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 26

Introduced by Assembly Member Bonilla

December 3, 2012

An act to amend begin delete Section 8050 of the Civil Code, and to amend end delete Section 1720 of, and to add Section 1720.7 to, the Labor Code, relating to begin delete construction. end delete begin insert prevailing wage. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 26, as amended, Bonilla. Construction: prevailing begin delete wage and mechanics liens. end delete begin insert wage. end insert

begin delete

(1) Existing

end delete

begin insert Existing end insert law defines the term “public works” for purposes of requirements regarding the payment of prevailing wages. Existing law generally defines “public works” to include construction, alteration, demolition, installation, or repair work done under contract and paid in whole or in part out of public funds. Existing law defines “construction” for these purposes to include work performed during the design and preconstruction phases of construction. Existing law makes a willful violation of laws relating to payment of prevailing wages on public works a misdemeanor.

This bill would revise the definition of “construction” to also include work performed during the postconstruction phases of construction, including, but not limited to, all cleanup work at the jobsite. The bill would also expand the definition of “public works,” for the purposes of requirements regarding the payment of prevailing wages, to also include any task relating to the collecting or sorting, or both, of refuse or recyclable metals, such as copper, steel, and aluminum, performed at a public works jobsite. By expanding the definition of a crime, this bill would impose a state-mandated local program.

begin delete

(2) The California Constitution grants mechanics, persons furnishing materials, artisans, and laborers of every class the right to a lien upon the property upon which he or she has bestowed labor or furnished material for the value of that labor done and material furnished. The California Constitution also requires the Legislature to provide, by law, for the speedy and efficient enforcement of those liens.

end delete begin delete

Existing statutory law governs works of improvement, including mechanics liens. Existing law grants specified persons who provide work authorized for a work of improvement the right to a mechanics lien. Existing law defines “work of improvement” to include, among other things, construction, alteration, repair, demolition, or removal, in whole or in part, of, or addition to, specified infrastructure and generally defines “work of improvement” to mean the entire structure or scheme of improvement as a whole, and includes site improvement.

end delete begin delete

This bill would expand the definition of “work of improvement” to also include all cleanup work performed at the site.

end delete

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 8050 of the Civil Code is amended to
read:

8050.  

(a) “Work of improvement” includes, but is not limited
to:

(1) Construction, alteration, repair, demolition, or removal, in
whole or in part, of, or addition to, a building, wharf, bridge, ditch,
flume, aqueduct, well, tunnel, fence, machinery, railroad, or road.

(2) Seeding, sodding, or planting of real property for landscaping
purposes.

(3) Filling, leveling, or grading of real property.

(b) Except as otherwise provided in this part, “work of
improvement” means the entire structure or scheme of
improvement as a whole, and includes site improvement and all
cleanup work performed at the site.

end delete

begin delete SEC. 2. end delete
begin insert SECTION 1. end insert   

Section 1720 of the Labor Code is amended to
read:

1720.  

(a) As used in this chapter, “public works” means:

(1) 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 pursuant to order of the Public Utilities Commission or
other public authority. For purposes of this paragraph,
“construction” includes work performed during the design and
preconstruction phases of construction, including, but not limited
to, inspection and land surveying work, and work performed during
the postconstruction phases of construction, including, but not
limited to, all cleanup work at the jobsite. For purposes of this
paragraph, “installation” includes, but is not limited to, the
assembly and disassembly of freestanding and affixed modular
office systems.

(2) Work done for irrigation, utility, reclamation, and
improvement districts, and other districts of this type. “Public
work” does not include the operation of the irrigation or drainage
system of any irrigation or reclamation district, except as used in
Section 1778 relating to retaining wages.

(3) Street, sewer, or other improvement work done under the
direction and supervision or by the authority of any officer or
public body of the state, or of any political subdivision or district
thereof, whether the political subdivision or district operates under
a freeholder’s charter or not.

(4) The laying of carpet done under a building lease-maintenance
contract and paid for out of public funds.

(5) The laying of carpet in a public building done under contract
and paid for in whole or in part out of public funds.

(6) Public transportation demonstration projects authorized
pursuant to Section 143 of the Streets and Highways Code.

(b) For purposes of this section, “paid for in whole or in part
out of public funds” means all of the following:

(1) The payment of money or the equivalent of money by the
state or political subdivision directly to or on behalf of the public
works contractor, subcontractor, or developer.

(2) Performance of construction work by the state or political
subdivision in execution of the project.

(3) Transfer by the state or political subdivision of an asset of
value for less than fair market price.

(4) Fees, costs, rents, insurance or bond premiums, loans, interest
rates, or other obligations that would normally be required in the
execution of the contract, that are paid, reduced, charged at less
than fair market value, waived, or forgiven by the state or political
subdivision.

(5) Money loaned by the state or political subdivision that is to
be repaid on a contingent basis.

(6) Credits that are applied by the state or political subdivision
against repayment obligations to the state or political subdivision.

(c) Notwithstanding subdivision (b):

(1) Private residential projects built on private property are not
subject to the requirements of this chapter unless the projects are
built pursuant to an agreement with a state agency, redevelopment
agency, or local public housing authority.

(2) If the state or a political subdivision requires a private
developer to perform construction, alteration, demolition,
installation, or repair work on a public work of improvement as a
condition of regulatory approval of an otherwise private
development project, and the state or political subdivision
contributes no more money, or the equivalent of money, to the
overall project than is required to perform this public improvement
work, and the state or political subdivision maintains no proprietary
interest in the overall project, then only the public improvement
work shall thereby become subject to this chapter.

(3) If the state or a political subdivision reimburses a private
developer for costs that would normally be borne by the public,
or provides directly or indirectly a public subsidy to a private
development project that is de minimis in the context of the project,
an otherwise private development project shall not thereby become
subject to the requirements of this chapter.

(4) The construction or rehabilitation of affordable housing units
for low- or moderate-income persons pursuant to paragraph (5) or
(7) of subdivision (e) of Section 33334.2 of the Health and Safety
Code that are paid for solely with moneys from the Low and
Moderate Income Housing Fund established pursuant to Section
33334.3 of the Health and Safety Code or that are paid for by a
combination of private funds and funds available pursuant to
Section 33334.2 or 33334.3 of the Health and Safety Code do not
constitute a project that is paid for in whole or in part out of public
funds.

(5) “Paid for in whole or in part out of public funds” does not
include tax credits provided pursuant to Section 17053.49 or 23649
of the Revenue and Taxation Code.

(6) Unless otherwise required by a public funding program, the
construction or rehabilitation of privately owned residential projects
is not subject to the requirements of this chapter if one or more of
the following conditions are met:

(A) The project is a self-help housing project in which no fewer
than 500 hours of construction work associated with the homes
are to be performed by the home buyers.

(B) The project consists of rehabilitation or expansion work
associated with a facility operated on a not-for-profit basis as
temporary or transitional housing for homeless persons with a total
project cost of less than twenty-five thousand dollars ($25,000).

(C) Assistance is provided to a household as either mortgage
assistance, downpayment assistance, or for the rehabilitation of a
single-family home.

(D) The project consists of new construction, expansion, or
rehabilitation work associated with a facility developed by a
nonprofit organization to be operated on a not-for-profit basis to
provide emergency or transitional shelter and ancillary services
and assistance to homeless adults and children. The nonprofit
organization operating the project shall provide, at no profit, not
less than 50 percent of the total project cost from nonpublic
sources, excluding real property that is transferred or leased. Total
project cost includes the value of donated labor, materials,
architectural, and engineering services.

(E) The public participation in the project that would otherwise
meet the criteria of subdivision (b) is public funding in the form
of below-market interest rate loans for a project in which
occupancy of at least 40 percent of the units is restricted for at
least 20 years, by deed or regulatory agreement, to individuals or
families earning no more than 80 percent of the area median
income.

(d) Notwithstanding any provision of this section to the contrary,
the following projects shall not, solely by reason of this section,
be subject to the requirements of this chapter:

(1) Qualified residential rental projects, as defined by Section
142(d) of the Internal Revenue Code, financed in whole or in part
through the issuance of bonds that receive allocation of a portion
of the state ceiling pursuant to Chapter 11.8 of Division 1
(commencing with Section 8869.80) of the Government Code on
or before December 31, 2003.

(2) Single-family residential projects financed in whole or in
part through the issuance of qualified mortgage revenue bonds or
qualified veterans’ mortgage bonds, as defined by Section 143 of
the Internal Revenue Code, or with mortgage credit certificates
under a Qualified Mortgage Credit Certificate Program, as defined
by Section 25 of the Internal Revenue Code, that receive allocation
of a portion of the state ceiling pursuant to Chapter 11.8 of Division
1 (commencing with Section 8869.80) of the Government Code
on or before December 31, 2003.

(3) Low-income housing projects that are allocated federal or
state low-income housing tax credits pursuant to Section 42 of the
Internal Revenue Code, Chapter 3.6 of Division 31 (commencing
with Section 50199.4) of the Health and Safety Code, or Section
12206, 17058, or 23610.5 of the Revenue and Taxation Code, on
or before December 31, 2003.

(e) If a statute, other than this section, or a regulation, other than
a regulation adopted pursuant to this section, or an ordinance or a
contract applies this chapter to a project, the exclusions set forth
in subdivision (d) do not apply to that project.

(f) For purposes of this section, references to the Internal
Revenue Code mean the Internal Revenue Code of 1986, as
amended, and include the corresponding predecessor sections of
the Internal Revenue Code of 1954, as amended.

(g) The amendments made to this section by either Chapter 938
of the Statutes of 2001 or the act adding this subdivision shall not
be construed to preempt local ordinances requiring the payment
of prevailing wages on housing projects.

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 1720.7 is added to the Labor Code, to read:

1720.7.  

For the limited purposes of Article 2 (commencing
with Section 1770), “public works” also means any task relating
to the collecting or sorting, or both, of refuse or recyclable metals,
such as copper, steel, and aluminum, performed at a public works
jobsite.

begin delete SEC. 4. end delete
begin insert SEC. 3. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.