BILL ANALYSIS Ó AB 2272 Page 1 Date of Hearing: April 30, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 2272 (Gray) - As Introduced: February 21, 2014 Policy Committee: LaborVote:5-1 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This bill specifies that "public work" for purposes of prevailing wage law includes projects funded by the California Advanced Services Fund (CASF). FISCAL EFFECT The Department of Industrial Relations (DIR) estimates costs of approximately $280,000 to Division of Labor Standards Enforcement for increased enforcement and investigations. COMMENTS 1)Purpose. This bill, sponsored by the California-Nevada Conference of Operating Engineers, codifies a recent DIR determination that public works funded in whole or in part by the CASF are subject to California's prevailing wage requirements. According to the author, this change in law provides clarity to contractors who are bidding on CASF-funded projects and to labor standards officers who are responsible for enforcing labor laws on the project. 2)Background . CASF, administered by the Public Utilities Commission, provides grants to telephone corporations to provide broadband access and build out facilities in unserved and underserved areas in the state. This bill is in response to a petition to DIR challenging prevailing wage requirements. The Central Valley Next Generation Broadband Infrastructure Project (CVNGBIP) is a 1,371 mile fiber-optic infrastructure project through 18 counties. The $66.6 million project is funded through federal, state and local AB 2272 Page 2 funds. CVNGBIP petitioned DIR challenging the prevailing wage requirements because state funds constitute only 10% of the project's total budget. In November 2013, DIR issued a letter making the determination that because CVNGBIP is partially funded with state funds, it is a "public work" subject to California's prevailing wage requirements. Since this determination, DIR has issued one penalty assessment related to the CVNGBIP. The construction firm that received the penalty filed for a review of the assessment in February 2014. Analysis Prepared by : Misty Feusahrens / APPR. / (916) 319-2081