BILL ANALYSIS �
AB 874
Page 1
Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 874 (Williams) - As Amended: March 21, 2013
Policy Committee: Utilities and
Commerce Vote: 11-4
Labor and Employment 6-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill prohibits investor-owned electrical corporations from
using funds from utility rates to assist or deter union
organizing. Specifically, this bill:
1)Prohibits a public utility from recovering in the utility
rates charged to customers, either directly or indirectly,
expenses incurred in assisting or deterring union organizing.
2)Requires expenses incurred in assisting or deterring union
organizing to be exclusively paid by the public utility's
shareholders.
FISCAL EFFECT
No direct state costs.
COMMENTS
1)Purpose. According to the author, this bill will ensure any
expense incurred by a public utility in assisting or deterring
union organization shall not be recoverable in the utility
rates. Instead, any expenses shall be borne exclusively by
the shareholders.
2)Federal Preemption and Prior Legislation. Under the National
Labor Relations Act (NRLA) states are preempted from
regulating conduct that Congress intended to be unregulated
and controlled by the free play of economic forces.
AB 874
Page 2
In 2000, AB 1889 (Cedillo) was enacted to prohibit employers
who received state grants or funds from using the state funds
to assist, promote, or deter union organizing.
This law was challenged by multiple businesses in Chamber of
Commerce v. Brown on grounds of federal preemption.
On appeal, the United States Supreme Court held that AB 1889
was federally preempted because California attempted to
regulate an area protected and reserved for market freedom.
The Court also found that AB 1889 favored unions and exceeded
the scope of California's sovereignty over controlling the use
of funds by requiring separate records and making it difficult
for employers to prove state funds were not used.
3)Differences between this bill and prior legislation
The author contends that the previous ruling does not apply to
this bill because utilities are already required to provide
detailed accounting and segregation of funds to the Public
Utilities Commission and unlike AB 1889, the bill does not
treat pro and anti-union organizing activities differently.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081