Amended in Senate August 22, 2014

Amended in Senate June 16, 2014

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 BillNo. 26


Introduced by Assembly Member Bonilla

(Coauthor: Senator Hueso)

December 3, 2012


An act to amend Section 1720 of the Labor Code, relating to prevailing wage.

LEGISLATIVE COUNSEL’S DIGEST

AB 26, as amended, Bonilla. Construction: prevailing wage.

Existing 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. By expanding the definition of a crime, this bill would impose a state-mandated local program.

begin insert

This bill would incorporate additional changes in Section 1720 of the Labor Code proposed by AB 2272, that would become operative only if SB 2272 and this bill are both chaptered and become effective on or before January 1, 2015, and this bill is chaptered last.

end insert

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:

P2    1

SECTION 1.  

Section 1720 of the Labor Code is amended to
2read:

3

1720.  

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

4(1) Construction, alteration, demolition, installation, or repair
5work done under contract and paid for in whole or in part out of
6public funds, except work done directly by any public utility
7company pursuant to order of the Public Utilities Commission or
8other public authority. For purposes of this paragraph,
9“construction” includes work performed during the design and
10preconstruction phases of construction, including, but not limited
11to, inspection and land surveying work, and work performed during
12the postconstruction phases of construction, including, but not
13limited to, all cleanup work at the jobsite. For purposes of this
14paragraph, “installation” includes, but is not limited to, the
15assembly and disassembly of freestanding and affixed modular
16office systems.

17(2) Work done for irrigation, utility, reclamation, and
18improvement districts, and other districts of this type. “Public
19work” does not include the operation of the irrigation or drainage
P3    1system of any irrigation or reclamation district, except as used in
2Section 1778 relating to retaining wages.

3(3) Street, sewer, or other improvement work done under the
4direction and supervision or by the authority of any officer or
5public body of the state, or of any political subdivision or district
6thereof, whether the political subdivision or district operates under
7a freeholder’s charter or not.

8(4) The laying of carpet done under a building lease-maintenance
9contract and paid for out of public funds.

10(5) The laying of carpet in a public building done under contract
11and paid for in whole or in part out of public funds.

12(6) Public transportation demonstration projects authorized
13pursuant to Section 143 of the Streets and Highways Code.

14(b) For purposes of this section, “paid for in whole or in part
15out of public funds” means all of the following:

16(1) The payment of money or the equivalent of money by the
17state or political subdivision directly to or on behalf of the public
18works contractor, subcontractor, or developer.

19(2) Performance of construction work by the state or political
20subdivision in execution of the project.

21(3) Transfer by the state or political subdivision of an asset of
22value for less than fair market price.

23(4) Fees, costs, rents, insurance or bond premiums, loans, interest
24rates, or other obligations that would normally be required in the
25execution of the contract, that are paid, reduced, charged at less
26than fair market value, waived, or forgiven by the state or political
27subdivision.

28(5) Money loaned by the state or political subdivision that is to
29be repaid on a contingent basis.

30(6) Credits that are applied by the state or political subdivision
31against repayment obligations to the state or political subdivision.

32(c) Notwithstanding subdivision (b):

33(1) Private residential projects built on private property are not
34subject to the requirements of this chapter unless the projects are
35built pursuant to an agreement with a state agency, redevelopment
36agency, or local public housing authority.

37(2) If the state or a political subdivision requires a private
38developer to perform construction, alteration, demolition,
39installation, or repair work on a public work of improvement as a
40condition of regulatory approval of an otherwise private
P4    1development project, and the state or political subdivision
2contributes no more money, or the equivalent of money, to the
3overall project than is required to perform this public improvement
4work, and the state or political subdivision maintains no proprietary
5interest in the overall project, then only the public improvement
6work shall thereby become subject to this chapter.

7(3) If the state or a political subdivision reimburses a private
8developer for costs that would normally be borne by the public,
9or provides directly or indirectly a public subsidy to a private
10development project that is de minimis in the context of the project,
11an otherwise private development project shall not thereby become
12subject to the requirements of this chapter.

13(4) The construction or rehabilitation of affordable housing units
14for low- or moderate-income persons pursuant to paragraph (5) or
15(7) of subdivision (e) of Section 33334.2 of the Health and Safety
16Code that are paid for solely with moneys from the Low and
17Moderate Income Housing Fund established pursuant to Section
1833334.3 of the Health and Safety Code or that are paid for by a
19combination of private funds and funds available pursuant to
20Section 33334.2 or 33334.3 of the Health and Safety Code do not
21constitute a project that is paid for in whole or in part out of public
22funds.

begin delete

23(5) “Paid for in whole or in part out of public funds” does not
24include tax credits provided pursuant to Section 17053.49 or 23649
25of the Revenue and Taxation Code.

end delete
begin delete

26(6)

end delete

27begin insert(5)end insert Unless otherwise required by a public funding program, the
28construction or rehabilitation of privately owned residential projects
29is not subject to the requirements of this chapter if one or more of
30the following conditions are met:

31(A) The project is a self-help housing project in which no fewer
32than 500 hours of construction work associated with the homes
33are to be performed by the home buyers.

34(B) The project consists of rehabilitation or expansion work
35associated with a facility operated on a not-for-profit basis as
36 temporary or transitional housing for homeless persons with a total
37project cost of less than twenty-five thousand dollars ($25,000).

38(C) Assistance is provided to a household as either mortgage
39assistance, downpayment assistance, or for the rehabilitation of a
40single-family home.

P5    1(D) The project consists of new construction, expansion, or
2rehabilitation work associated with a facility developed by a
3nonprofit organization to be operated on a not-for-profit basis to
4provide emergency or transitional shelter and ancillary services
5and assistance to homeless adults and children. The nonprofit
6organization operating the project shall provide, at no profit, not
7less than 50 percent of the total project cost from nonpublic
8sources, excluding real property that is transferred or leased. Total
9project cost includes the value of donated labor, materials,
10architectural, and engineering services.

11(E) The public participation in the project that would otherwise
12meet the criteria of subdivision (b) is public funding in the form
13of below-market interest rate loans for a project in which
14occupancy of at least 40 percent of the units is restricted for at
15least 20 years, by deed or regulatory agreement, to individuals or
16families earning no more than 80 percent of the area median
17income.

18(d) Notwithstanding any provision of this section to the contrary,
19the following projects shall not, solely by reason of this section,
20be subject to the requirements of this chapter:

21(1) Qualified residential rental projects, as defined by Section
22142(d) of the Internal Revenue Code, financed in whole or in part
23through the issuance of bonds that receive allocation of a portion
24of the state ceiling pursuant to Chapter 11.8begin delete of Division 1end delete
25 (commencing with Section 8869.80) ofbegin insert Division 1 of Title 2 ofend insert the
26Government Code on or before December 31, 2003.

27(2) Single-family residential projects financed in whole or in
28part through the issuance of qualified mortgage revenue bonds or
29qualified veterans’ mortgage bonds, as defined by Section 143 of
30the Internal Revenue Code, or with mortgage credit certificates
31under a Qualified Mortgage Credit Certificate Program, as defined
32by Section 25 of the Internal Revenue Code, that receive allocation
33of a portion of the state ceiling pursuant to Chapter 11.8begin delete of Division
341end delete
(commencing with Section 8869.80) ofbegin insert Division 1 of Title 2end insert the
35Government Code on or before December 31, 2003.

36(3) Low-income housing projects that are allocated federal or
37state low-income housing tax credits pursuant to Section 42 of the
38Internal Revenue Code, Chapter 3.6begin delete of Division 31end delete (commencing
39with Section 50199.4) ofbegin insert Part 1 of Division 31 ofend insert the Health and
P6    1Safety Code, or Section 12206, 17058, or 23610.5 of the Revenue
2and Taxation Code, on or before December 31, 2003.

3(e) If a statute, other than this section, or a regulation, other than
4a regulation adopted pursuant to this section, or an ordinance or a
5contract applies this chapter to a project, the exclusions set forth
6in subdivision (d) do not apply to that project.

7(f) For purposes of this section, references to the Internal
8Revenue Code mean the Internal Revenue Code of 1986, as
9amended, and include the corresponding predecessor sections of
10the Internal Revenue Code of 1954, as amended.

11(g) The amendments made to this section by either Chapter 938
12of the Statutes of 2001 or the act adding this subdivision shall not
13be construed to preempt local ordinances requiring the payment
14of prevailing wages on housing projects.

15begin insert

begin insertSEC. 1.5.end insert  

end insert

begin insertSection 1720 of the end insertbegin insertLabor Codeend insertbegin insert is amended to read:end insert

16

1720.  

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

17(1) Construction, alteration, demolition, installation, or repair
18work done under contract and paid for in whole or in part out of
19public funds, except work done directly by any public utility
20company pursuant to order of the Public Utilities Commission or
21other public authority. For purposes of this paragraph,
22“construction” includes work performed during the design and
23preconstruction phases of construction, including, but not limited
24to, inspection and land surveyingbegin delete work.end deletebegin insert work, and work performed
25during the postconstruction phases of construction, including, but
26not limited to, all cleanup work at the jobsite.end insert
For purposes of this
27paragraph, “installation” includes, but is not limited to, the
28assembly and disassembly of freestanding and affixed modular
29office systems.

30(2) Work done for irrigation, utility, reclamation, and
31improvement districts, and other districts of this type. “Public
32work” does not include the operation of the irrigation or drainage
33system of any irrigation or reclamation district, except as used in
34Section 1778 relating to retaining wages.

35(3) Street, sewer, or other improvement work done under the
36direction and supervision or by the authority of any officer or
37public body of the state, or of any political subdivision or district
38thereof, whether the political subdivision or district operates under
39a freeholder’s charter or not.

P7    1(4) The laying of carpet done under a building lease-maintenance
2contract and paid for out of public funds.

3(5) The laying of carpet in a public building done under contract
4and paid for in whole or in part out of public funds.

5(6) Public transportation demonstration projects authorized
6pursuant to Section 143 of the Streets and Highways Code.

begin insert

7(7) (A) Infrastructure project grants from the California
8Advanced Services Fund pursuant to Section 281 of the Public
9Utilities Code.

end insert
begin insert

10(B) For purposes of this paragraph, the Public Utilities
11Commission is not the awarding body or the body awarding the
12contract, as defined in Section 1722.

end insert

13(b) For purposes of this section, “paid for in whole or in part
14out of public funds” means all of the following:

15(1) The payment of money or the equivalent of money by the
16state or political subdivision directly to or on behalf of the public
17works contractor, subcontractor, or developer.

18(2) Performance of construction work by the state or political
19subdivision in execution of the project.

20(3) Transfer by the state or political subdivision of an asset of
21value for less than fair market price.

22(4) Fees, costs, rents, insurance or bond premiums, loans, interest
23rates, or other obligations that would normally be required in the
24execution of the contract, that are paid, reduced, charged at less
25than fair market value, waived, or forgiven by the state or political
26subdivision.

27(5) Money loaned by the state or political subdivision that is to
28be repaid on a contingent basis.

29(6) Credits that are applied by the state or political subdivision
30against repayment obligations to the state or political subdivision.

31(c) Notwithstanding subdivision (b):

32(1) Private residential projects built on private property are not
33subject to the requirements of this chapter unless the projects are
34built pursuant to an agreement with a state agency, redevelopment
35agency, or local public housing authority.

36(2) If the state or a political subdivision requires a private
37developer to perform construction, alteration, demolition,
38installation, or repair work on a public work of improvement as a
39condition of regulatory approval of an otherwise private
40development project, and the state or political subdivision
P8    1contributes no more money, or the equivalent of money, to the
2overall project than is required to perform this public improvement
3work, and the state or political subdivision maintains no proprietary
4interest in the overall project, then only the public improvement
5work shall thereby become subject to this chapter.

6(3) If the state or a political subdivision reimburses a private
7developer for costs that would normally be borne by the public,
8or provides directly or indirectly a public subsidy to a private
9development project that is de minimis in the context of the project,
10an otherwise private development project shall not thereby become
11subject to the requirements of this chapter.

12(4) The construction or rehabilitation of affordable housing units
13for low- or moderate-income persons pursuant to paragraph (5) or
14(7) of subdivision (e) of Section 33334.2 of the Health and Safety
15Code that are paid for solely with moneys from the Low and
16Moderate Income Housing Fund established pursuant to Section
1733334.3 of the Health and Safety Code or that are paid for by a
18combination of private funds and funds available pursuant to
19Section 33334.2 or 33334.3 of the Health and Safety Code do not
20constitute a project that is paid for in whole or in part out of public
21funds.

begin delete

22(5) “Paid for in whole or in part out of public funds” does not
23include tax credits provided pursuant to Section 17053.49 or 23649
24of the Revenue and Taxation Code.

end delete
begin delete

25(6)

end delete

26begin insert(5)end insert Unless otherwise required by a public funding program, the
27construction or rehabilitation of privately owned residential projects
28is not subject to the requirements of this chapter if one or more of
29the following conditions are met:

30(A) The project is a self-help housing project in which no fewer
31than 500 hours of construction work associated with the homes
32are to be performed by the home buyers.

33(B) The project consists of rehabilitation or expansion work
34associated with a facility operated on a not-for-profit basis as
35temporary or transitional housing for homeless persons with a total
36project cost of less than twenty-five thousand dollars ($25,000).

37(C) Assistance is provided to a household as either mortgage
38assistance, downpayment assistance, or for the rehabilitation of a
39single-family home.

P9    1(D) The project consists of new construction, expansion, or
2rehabilitation work associated with a facility developed by a
3nonprofit organization to be operated on a not-for-profit basis to
4provide emergency or transitional shelter and ancillary services
5and assistance to homeless adults and children. The nonprofit
6organization operating the project shall provide, at no profit, not
7less than 50 percent of the total project cost from nonpublic
8sources, excluding real property that is transferred or leased. Total
9project cost includes the value of donated labor, materials,
10architectural, and engineering services.

11(E) The public participation in the project that would otherwise
12meet the criteria of subdivision (b) is public funding in the form
13of below-market interest rate loans for a project in which
14occupancy of at least 40 percent of the units is restricted for at
15least 20 years, by deed or regulatory agreement, to individuals or
16families earning no more than 80 percent of the area median
17income.

18(d) Notwithstanding any provision of this section to the contrary,
19the following projects shall not, solely by reason of this section,
20be subject to the requirements of this chapter:

21(1) Qualified residential rental projects, as defined by Section
22142(d) of the Internal Revenue Code, financed in whole or in part
23through the issuance of bonds that receive allocation of a portion
24of the state ceiling pursuant to Chapter 11.8begin delete of Division 1end delete
25 (commencing with Section 8869.80) ofbegin insert Division 1 of Title 2 ofend insert the
26Government Code on or before December 31, 2003.

27(2) Single-family residential projects financed in whole or in
28part through the issuance of qualified mortgage revenue bonds or
29qualified veterans’ mortgage bonds, as defined by Section 143 of
30the Internal Revenue Code, or with mortgage credit certificates
31under a Qualified Mortgage Credit Certificate Program, as defined
32by Section 25 of the Internal Revenue Code, that receive allocation
33of a portion of the state ceiling pursuant to Chapter 11.8begin delete of Division
341end delete
(commencing with Section 8869.80) ofbegin insert Division 1 of Title 2 ofend insert
35 the Government Code on or before December 31, 2003.

36(3) Low-income housing projects that are allocated federal or
37state low-income housing tax credits pursuant to Section 42 of the
38Internal Revenue Code, Chapter 3.6begin delete of Division 31end delete (commencing
39with Section 50199.4) ofbegin insert Part 1 of Division 31 ofend insert the Health and
P10   1Safety Code, or Section 12206, 17058, or 23610.5 of the Revenue
2and Taxation Code, on or before December 31, 2003.

3(e) If a statute, other than this section, or a regulation, other than
4a regulation adopted pursuant to this section, or an ordinance or a
5contract applies this chapter to a project, the exclusions set forth
6in subdivision (d) do not apply to that project.

7(f) For purposes of this section, references to the Internal
8Revenue Code mean the Internal Revenue Code of 1986, as
9amended, and include the corresponding predecessor sections of
10the Internal Revenue Code of 1954, as amended.

11(g) The amendments made to this section by either Chapter 938
12of the Statutes of 2001 or the act adding this subdivision shall not
13be construed to preempt local ordinances requiring the payment
14of prevailing wages on housing projects.

15begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

Section 1.5 of this bill incorporates amendments to
16Section 1720 of the Labor Code proposed by both this bill and
17Assembly Bill 2272. It shall only become operative if (1) both bills
18are enacted and become effective on or before January 1, 2015,
19(2) each bill amends Section 1720 of the Labor Code, and (3) this
20bill is enacted after Assembly Bill 2272, in which case Section 1
21of this bill shall not become operative.

end insert
22

begin deleteSEC. 2.end delete
23begin insertSEC. 3.end insert  

No reimbursement is required by this act pursuant to
24Section 6 of Article XIII B of the California Constitution because
25the only costs that may be incurred by a local agency or school
26district will be incurred because this act creates a new crime or
27infraction, eliminates a crime or infraction, or changes the penalty
28for a crime or infraction, within the meaning of Section 17556 of
29the Government Code, or changes the definition of a crime within
30the meaning of Section 6 of Article XIII B of the California
31Constitution.



O

    91