BILL NUMBER: SB 7 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 7, 2013
AMENDED IN SENATE FEBRUARY 19, 2013
INTRODUCED BY Senators Steinberg and Cannella
DECEMBER 3, 2012
An act to add Section 1782 to the Labor Code, relating to public
works.
LEGISLATIVE COUNSEL'S DIGEST
SB 7, as amended, Steinberg. Public works: charter cities.
Existing law requires that, except as specified, not less than the
general prevailing rate of per diem wages, determined by the
Director of Industrial Relations, be paid to workers employed on
public works projects. Existing law defines "public works" to
include, among other things, construction, alteration, demolition,
installation, or repair work done under contract and paid for, in
whole or in part, out of public funds, and 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.
This bill would prohibit a charter city from receiving or using
state funding or financial assistance for a construction project if
the city has a charter provision or ordinance that authorizes a
contractor to not comply with prevailing wage provisions on any
public works contract. The bill would, except as specified, prohibit
a charter city from receiving or using state funding or financial
assistance for a construction project for up to 2 calendar
years if the city has, after January 1, 2014,
has awarded , within the prior 2 years,
a public works contract without requiring the contractor to
comply with prevailing wage provisions. This bill would authorize
charter cities to receive or use state funding or financial
assistance if the city has adopted a local
prevailing wage ordinance , applicable to all of its public
works contracts, that includes requirements that are equal to
or greater than the state's prevailing wage requirements, as
specified. This bill would exclude contracts for projects of $25,000
or less for construction work, or projects of $15,000 or less for
alteration, demolition, repair, or maintenance work. This bill would
require the Director of Industrial Relations to maintain a list of
charter cities that may receive and use state funding and
or financial assistance for their construction
projects.
This bill would provide that it does not restrict a charter city
from receiving or using state funding or financial assistance that
was awarded to the city prior to January 1, 2015, or from receiving
or using state funding or financial assistance to complete a contract
that was awarded prior to January 1, 2015, and that a charter city
would not be disqualified from receiving or using state funding or
financial assistance for its construction projects based on the city'
s failure to require a contractor to comply with prevailing wage
provisions in performing a contract the city advertised for bid or
awarded prior to January 1, 2015.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) It is a matter of statewide concern that California has an
available workforce of skilled construction workers to efficiently
complete both public and private infrastructure projects, and
maintaining that workforce requires the continual training of new
workers to replace the aging workforce. An in-state workforce of
skilled construction workers who can complete projects in a
streamlined manner benefits the state's economy.
(b) The state's prevailing wage law promotes the creation of a
skilled construction workforce. The requirement that contractors on
public work pay prevailing wages to their employees encourages
contractors to hire the most skilled workers and to invest in their
training. The incentives provided in the prevailing wage law for
formal apprenticeship training in state-approved programs provide the
financial support and on-the-job training opportunities necessary to
train the next generation of skilled construction workers.
(c) The majority of California workers do not have four-year
college degrees, and maintaining construction work as an occupation
that can provide good jobs to California workers is important to the
future of the state.
(d) The state's prevailing wage law helps to maintain construction
work as an occupation that provides middle-class jobs to hundreds of
thousands of California workers, enabling the workers to support
families and contribute to their communities. The prevailing wage law
also provides necessary on-the-job training opportunities for the
more than 50,000 apprentices enrolled in state-approved
apprenticeship programs in the building and construction trades,
enabling the apprentices to graduate from the programs and pursue
careers as journey-level workers.
(e) The state's prevailing wage law applies to construction
projects paid for in whole or in part out of public funds, including
projects awarded by any county, city, district, public housing
authority, public agency of the state, and assessment or improvement
districts.
(f) The California Supreme Court has held that charter cities need
not require contractors to comply with the state's prevailing wage
law on purely municipal projects. Many charter cities require
contractors to comply with the state's prevailing wage law on their
municipal projects, but some charter cities do not.
(g) Charter cities that require compliance with the prevailing
wage law on their municipal projects are furthering a state policy
that has substantial benefits that go beyond the limits of the city.
Many of the workers employed on a municipal project will not live in
the city where the project is located, and many apprentices receiving
training on municipal projects will pursue careers outside the city.
(h) The state has limited financial resources to support local
construction projects, and it would further state policy to provide
financial assistance only to those charter cities that require
compliance with the prevailing wage law on all their municipal
construction projects. To the extent that requiring compliance with
the state's prevailing wage law may raise the cost of municipal
projects for these cities, these cities also would be more in need of
state financial support for their other construction projects.
(i) Part of the state's purpose in subsidizing public works
projects is to create and maintain good jobs and training
opportunities in the construction industry in order to preserve the
middle class. Cities that require compliance with the prevailing wage
law on all their public works projects have construction programs
that are furthering rather than undermining that goal.
(i)
(j) The intent of Section 1782 of the Labor Code is to
provide a financial incentive for charter cities to require
contractors on their municipal construction projects to comply with
the state's prevailing wage law by making these charter cities
eligible to receive and use state funding and
or financial assistance for their construction projects.
State funding or financial assistance for charter city construction
projects makes up only a small portion of charter city budgets, and
charter cities have the power to raise other revenues if
they do not wish to require the payment of prevailing wages on all
their municipal construction projects.
SEC. 2. Section 1782 is added to the Labor Code, to read:
1782. (a) A charter city shall not receive or use state funding
or financial assistance for a construction project if the city has a
charter provision or ordinance that authorizes a contractor to not
comply with the provisions of this article on any public works
contract.
(b) A charter city shall not receive or use state funding or
financial assistance for a construction project if the city has
awarded, within the current or prior two calendar
prior two years, a public works contract without requiring
the contractor to comply with all of the provisions of this article.
This subdivision shall not apply to contracts awarded prior
to January 1, 2014. This subdivision shall not apply if
the charter city's failure to include the prevailing wage or
apprenticeship requirement in a particular contract was inadvertent
and contrary to a city charter provision or ordinance that otherwise
requires compliance with this article.
(c) Notwithstanding subdivision (a), a charter city may
receive or use A charter city is not disqualified by
subdivision (a) from receiving or using state funding or
financial assistance for its construction projects if the charter
city has adopted a local prevailing wage ordinance
for all its public works contracts that includes
requirements that in all respects are equal to or greater than the
requirements imposed by the provisions of this article and that do
not authorize a contractor to not comply with this article.
(d) For purposes of this section, the following shall apply:
(1) A public works contract does not include contracts for
projects of twenty-five thousand ($25,000) dollars
($25,000) or less when the project is for construction
work, or projects of fifteen thousand ($15,000)
dollars ($15,000) or less when the project is for
alteration, demolition, repair, or maintenance work.
(2) A charter city includes any agency of a charter city and any
entity controlled by a charter city whose contracts would be subject
to this article.
(3) A "construction project" means a project that involves the
award of a public works contract.
(3)
(4) State funding and or
financial assistance includes direct state funding, state loans and
loan guarantees, state tax credits, and any other type of state
financial support for a construction project. State funding
and or financial assistance does not include
tax revenues that charter cities are entitled to
receive without conditions under the California Constitution.
(e) The Director of Industrial Relations shall maintain a list of
charter cities that may receive and use state funding and
or financial assistance for their construction
projects.
(f) (1) This section does not restrict a charter city from
receiving or using state funding or financial assistance that was
awarded to the city prior to January 1, 2015, or from receiving or
using state funding or financial assistance to complete a contract
that was awarded prior to January 1, 2015.
(2) A charter city is not disqualified by subdivision (b) from
receiving or using state funding or financial assistance for its
construction projects based on the city's failure to require a
contractor to comply with this article in performing a contract the
city advertised for bid or awarded prior to January 1, 2015.
SEC. 3. The provisions of this section are
severable. If any provision of this section or its application is
held invalid, that invalidity shall not affect other provisions or
applications that can be given effect without the invalid provision
or application.