BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 54
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          Date of Hearing:   August 14, 2013

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                               Roger Hernández, Chair
                    SB 54 (Hancock) - As Amended:  August 5, 2013

           SENATE VOTE  :   (vote not relevant)
           
          SUBJECT  :   Hazardous materials management: stationary sources:  
          skilled and trained workforce.

           SUMMARY  :   Enacts specified provisions related to construction  
          and related work performed by contract at specified stationary  
          sources.  Specifically,  this bill  :   

          1)Requires an owner or operator of specified stationary sources,  
            when contracting for the performance of construction,  
            maintenance and related work, to require that its contractors  
            and any subcontractors use a "skilled and trained workforce"  
            to perform all onsite work within an apprenticeable occupation  
            in the building and construction trades.

          2)Defines a "skilled and trained workforce" to mean a workforce  
            that meets the following criteria:

             a)   All the workers are either registered apprentices or  
               "skilled journeypersons."

             b)   As of January 1, 2014, at least 30 percent of the  
               "skilled journeypersons" are graduates of approved  
               apprenticeship programs, as specified.

             c)   As of January 1, 2015, at least 45 percent of the  
               "skilled journeypersons" are graduates of approved  
               apprenticeship programs, as specified.

             d)   As of January 1, 2016, at least 60 percent of the  
               "skilled journeypersons" are graduates of approved  
               apprenticeship programs, as specified.

          3)Defines a "skilled journeyperson" as a worker who meets all of  
            the following criteria:

             a)   The worker either graduated from an approved  
               apprenticeship program or has at least as many hours of  








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               on-the-job experience that would be required to graduate  
               from an approved apprenticeship program.

             b)   The worker is being paid at least a rate equivalent to  
               the prevailing hourly wage rate, as defined.

             c)   For work performed on or after January 1, 2018, the  
               worker has completed within the prior two calendar years at  
               least 20 hours of approved advanced safety training for  
               workers at high hazard facilities.

          4)Provides that the requirements of this bill shall not apply to  
            oil and gas extraction operations.

          5)Provides that the requirements of this bill shall not apply to  
            contracts awarded before January 1, 2014, unless the contract  
            is extended or renewed after this date.

          6)Provides that the requirements of this bill shall not apply to  
            the employees or the owner or operator of the stationary  
            source or prevent the owner or operator from using its own  
            employees to perform any work that has not been assigned to  
            contractors while the employees of the contractor are present  
            and working.

          7)Provides that specified provisions of the bill related to the  
            qualifications for skilled journeypersons shall not apply to  
            either of the following:

             a)   To the extent that the contractor has requested  
               qualified workers from local hiring halls but is unable to  
               obtain sufficient workers within 48 hours of the request.

             b)   To the extent that compliance is impracticable because  
               an emergency requires immediate action to prevent harm to  
               public health or safety or to the environment.

          8)Requires the Chief of the Division of Apprenticeship Standards  
            to approve a curriculum of in-person classroom and laboratory  
            instruction for approved advanced safety training for workers  
            at high hazard facilities by January 1, 2016.

          9)Makes related and conforming changes.

          10)Makes related legislative findings and declarations.








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           EXISTING LAW  :

          1)Establishes an accidental release prevention program  
            implemented by the Office of Emergency Services and the  
            appropriate administering agency in each city or county.

          2)Provides that stationary sources subject to the accidental  
            release prevention program are required to prepare a risk  
            management plan (RMP) when required under certain federal  
            regulations or if the administering agency determines that  
            there is a significant likelihood of a regulated substances  
            accident risk.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :  The California Accidental Release Prevention (CalARP)  
          Program was implemented on January 1, 1997 and replaced the  
          California Risk Management and Prevention Program (RMPP).   The  
          purpose of the CalARP program is to prevent accidental releases  
          of substances that can cause serious harm to the public and the  
          environment, to minimize the damage if releases do occur, and to  
          satisfy community right-to-know laws.   This is accomplished by  
          requiring businesses that handle more than a threshold quantity  
          of a regulated substance listed in the regulations to develop a  
          Risk Management Plan (RMP).   An RMP is a detailed engineering  
          analysis of the potential accident factors present at a business  
          and the mitigation measures that can be implemented to reduce  
          this accident potential.  



          Among other things, the RMP contains safety information, a  
          hazard review, operating procedures, training requirements,  
          maintenance requirements, compliance audits, and incident  
          investigation procedures.

          The CalARP program is implemented at the local government level  
          by Certified Unified Program Agencies (CUPAs) also known as  
          Administering Agencies (AAs).  The CalARP program is designed so  
          these agencies work directly with the regulated businesses.  The  
          CUPAs determine the level of detail in the RMPs, review the  
          RMPs, conduct facility inspections, and provide public access to  
          most of the information.  Confidential or trade secret  
          information may be restricted.








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           Stated Need for the Bill  

          According to the author, under existing law there are no  
          requirements that employees of outside contractors working at  
          chemical manufacturing and processing facilities, including  
          refineries, have a minimum level of skills training, including  
          safety training.  This poses a risk to public health and safety  
          as unskilled and untrained workers may be unfamiliar with the  
          construction work associated with such facilities, general  
          facility operations and emergency plans. 

          Therefore, the author states that ensuring that outside  
          contractors that work at chemical refineries have properly  
          trained workers through approved apprenticeship programs will  
          reduce public health and safety risks. 

          This bill extends the Health and Safety Code provisions  
          applicable to industrial facilities performing hazardous  
          activities (e.g. refineries and chemical plants) to require that  
          outside contractors performing on-site work at these facilities  
          use a skilled and trained workforce.  These facilities operate  
          on a 24/7 basis and present potentially serious risks to public  
          health and safety and to the environment.  Outside contractors  
          at these facilities should be using a qualified workforce, not  
          unskilled, low-wage workers hired off the street or brought in  
          from other states to save money.

          The bill defines a skilled and trained workforce to mean a  
          workforce consisting of qualified journeypersons and apprentices  
          registered in state-approved apprenticeship programs.  Qualified  
          journeypersons must be graduates of an apprenticeship program or  
          have at least the same amount of experience as would be required  
          to graduate from an apprenticeship program.  They also must have  
          completed at least 20 hours of advanced safety training in a  
          curriculum approved by the Chief of the Division of  
          Apprenticeship Standards.   Contractors and subcontractors must  
          pay their journeypersons at least the prevailing wage for the  
          craft to ensure that there is no economic incentive to use less  
          qualified workers for these high-hazard jobs.  Beginning on  
          January 1, 2014, at least 30 percent of a contractor's  
          journeyperson workforce must consist of graduates of a  
          state-approved apprenticeship program.  That figure rises to 45  
          percent on January 1, 2015 and to 60 percent on January 1, 2016.









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          These workforce requirements would not apply to the facility  
          owner's or operator's own employees, who are likely to be  
          familiar with high-hazard operations, only to outside  
          contractors.   These workforce requirements also would apply  
          only to on-site work within an apprenticeable craft in the  
          building and construction trades, i.e. a skilled craft for which  
          the state has approved a multi-year program of classes and  
          supervised on-the-job training to develop skilled  
          journeypersons.  

          The bill also contains exceptions for situations in which hiring  
          halls cannot dispatch sufficient qualified workers within 48  
          hours and for emergencies.

          In addition, the bill contains the following legislative  
          findings and declarations which provide the author and the  
          sponsor's justification for several specific provisions of the  
          bill:

               "(1) The use of unskilled and untrained workers at chemical  
               manufacturing and processing facilities that generate,  
               store, treat, handle, refine, process, and transport  
               hazardous materials is a risk to public health and safety,  
               and the risk to public health and safety is particularly  
               high when workers are employed by outside contractors  
               because they generally will be less familiar with the  
               operations of the facility and its emergency plans and the  
               owner or operator of the facility will have less incentive  
               to invest in their training.

               (2) Requiring that workers employed by outside contractors  
               at these facilities be paid at least at a rate equivalent  
               to the prevailing journeyperson wage for the occupation, or  
               be registered in an approved apprenticeship program, is  
               necessary to provide an economic incentive for employers to  
               use only the most skilled workers to perform work that  
               poses a risk to public health and safety. The wage scale is  
               also necessary to provide an economic incentive for the  
               workers to obtain the mandatory advanced safety training  
               required by Section 2 of this act.

               (3) Requiring that apprentices be registered in programs  
               approved by the Chief of the Division of Apprenticeship  
               Standards is necessary to ensure that these workers are  
               receiving the proper training and on-the-job supervision  








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               and that the programs are subject to proper oversight.

               (4) The requirement that at least 60 percent of the  
               journeypersons working for a contractor be graduates of an  
               approved apprenticeship program is necessary to ensure that  
               the majority of the journeypersons will have had  
               appropriate classroom and laboratory instruction for their  
               occupations. A phase-in for this requirement will avoid  
               disruption of the industry."

           Proposed Applicability of this Bill  

          As discussed above, this bill applies to specified facilities  
          regulated under the California Accidental Release Prevention  
          (CalARP) Program.

          The language of this bill states that it applies to the owner or  
          operator of a "stationary source with one or more covered  
          processes that is required to prepare and submit a [risk  
          management plan] pursuant to" a specified provision of the  
          Health and Safety Code (specifically Section 25531 et seq.).

          A "stationary source" is defined under Health and Safety Code  
          Section 25532(k) by a cross-reference to a definition in federal  
          regulations.  That federal regulation defines "stationary  
          source," in part, as follows:

               "Stationary source means any buildings, structures,  
               equipment, installations, or substance emitting stationary  
               activities which belong to the same industrial group, which  
               are located on one or more contiguous properties, which are  
               under the control of the same person (or persons under  
               common control), and from which an accidental release may  
               occur. The term stationary source does not apply to  
               transportation, including storage incident to  
               transportation, of any regulated substance or any other  
               extremely hazardous substance under the provisions of this  
               part. A stationary source includes transportation  
               containers used for storage not incident to transportation  
               and transportation containers connected to equipment at a  
               stationary source for loading or unloading?"  (40 C.F.R. §  
               68.3).

          A "covered process" is defined as a process that has specified  
          regulated substances in more than a threshold quantity as  








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          determined by federal or state law.  Health and Safety Code  
          Section 25532(c).  Existing law generally provides that if the  
          Administering Agency (AA) determines that there is a significant  
          likelihood of a regulated substances accident risk, it shall  
          require the stationary source to prepare and submit an RMP.   
          Health and Safety Code Section 25534.
           
           Therefore, the language of this bill specifies that it would  
          apply to the owner or operator of a "stationary source with one  
          or more covered processes that is required to prepare and submit  
          a [risk management plan]" pursuant to these provisions of  
          existing law.  The legislative findings and declarations refers  
          to the target of this bill as "chemical manufacturing and  
          processing facilities that generate, store, treat, handle,  
          refine, process, and transport hazardous materials."

          The author and the sponsor may wish to ensure that the current  
          definition contained in the bill adequately and narrowly covers  
          the intended facilities the legislation is designed to cover. 
           
          Interagency Working Group on Refinery Safety  

          In the aftermath of a serious chemical release and fire at  
          Chevron's Richmond oil refinery in August, 2012, the Brown  
          Administration formed an Interagency Working Group to examine  
          ways to improve public and worker safety through enhanced  
          oversight of refineries, and to strengthen emergency  
          preparedness in anticipation of any future incident.  The  
          Working Group consisted of participants from 13 agencies and  
          departments, as well as the Governor's office. Over an  
          eight-month period, the Working Group met internally and with  
          industry, labor, community, environmental, academic, local  
          emergency response and other stakeholders. In July 2013, the  
          Working Group issued a draft report with numerous findings and  
          recommendations.  

          The draft report may be accessed at:

           http://www.dir.ca.gov/DOSH/Reports/InteragencyWorkingGroupReport. 
          pdf  

          According to the author, this bill "augments the recommendations  
          in Governor Brown's Interagency Working Group on Refinery  
          Safety, which released a report in July 2013 titled 'Improving  
          Public and Worker Safety at Oil Refineries.'  The report lists  








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          several recommendations [to] improve public and worker safety  
          through enhanced oversight of refineries, and to strengthen  
          emergency preparedness in anticipation of any future incident."



           RELATED LEGISLATION  :

          This bill contains language that is similar, but not identical,  
          to language contained in AB 26 (Bonilla) of this year.  However,  
          AB 26 is limited to refinery projects funded by the AB 32  
          Greenhouse Gas Reduction Fund.  AB 26 passed the Assembly by a  
          51-25 vote in May, but was not heard in the Senate Committee on  
          Labor and Industrial Relations.

           ARGUMENTS IN SUPPORT  :

          This bill is sponsored by the State Building and Construction  
          Trades Council of California, who writes the following in  
          support:

               "This legislation will improve the safety of chemical  
               manufacturing facilities, including refineries, by creating  
               a standard for training on the industrial work performed at  
               these facilities and will encourage chemical manufacturers  
               to hire California workers.   

               Refinery safety has been an increasing problem in  
               California and across the United States.  Due to growing  
               concerns and recent incidents that have risked the public's  
               health, Governor Brown and members of the Legislature  
               called for changes to improve safety at these facilities.   
               An interagency group was formed to study this issue through  
               various methods including meetings with stakeholders.  The  
               Labor Occupational Health Program at UC Berkeley, which  
               helped facilitate both the labor and community stakeholder  
               meetings, published a report, "Refinery Safety in  
               California: Labor, Community and Fire Agency Views", and  
               Governor Brown's  Interagency Working Group on Refinery  
               Safety followed up with their own draft report issued in  
               July 2013, titled "Improving Public and Worker Safety at  
               Oil Refineries."  

               The Interagency Working Group report provided various  
               recommendations, including the following statement,  








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               "Workers involved in maintenance, represented by building  
               and construction trades unions, reported that training of  
               most maintenance workers (non-refinery employees) is  
               inadequate." They also reported, "refineries use mostly  
               contract workers, including out-of-state workers, to  
               conduct maintenance during planned shutdowns of a refinery  
               process (also referred to as turnarounds), and that  
               contract workers have less training and experience and,  
               therefore, are less safe."

               [This bill] directly responds to the need for a trained and  
               highly skilled workforce performing contracted out work to  
               improve worker and public safety for the communities  
               surrounding these facilities? 

               ?The public policy supporting the law is the need to avoid  
               unqualified workers performing skilled work inside  
               high-hazard facilities.  The contractors at these  
               facilities should be using the most skilled and qualified  
               workers."

           ARGUMENTS IN OPPOSITION  :

          At the time of preparation of this analysis, there was no  
          opposition on file to this measure.  However, the similar  
          measure discussed above (AB 26) generated significant opposition  
          from, among others, the United Steelworkers.

          As the analysis of AB 26 prepared by the Senate Committee on  
          Labor and Industrial Relations noted:

               "[Opponents] believe that this bill and the proponents are  
               trying to 'blame the workers' for events such as the  
               Chevron Richmond Refinery explosion and fire last year,  
               despite scientific evidence to the contrary. The United  
               Steelworkers (USW) argues that the US Chemical Safety  
               Board's Interim Investigative Report clearly states that  
               management's decisions were at full fault for the explosion  
               and fire and, in fact, it is because of the skills of the  
               highly trained steelworkers that there was no loss of life.  


               The United Steelworkers also argue that this bill replaces  
               permanent, long-term, certified and trained refinery  
               workers with temporary, contract employees. Additionally,  








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               they argue that this bill jeopardizes refinery safety,  
               refinery workers, and surrounding communities by minimizing  
               inclusion of safety records as a mandatory qualifying  
               factor for project contracts.  USW would like to see the  
               training requirement in the bill eliminated because 20  
               hours of training is not sufficient to adequately train  
               someone. Overall, they argue that the substitution of  
               proprietary, fully trained United Steelworkers with  
               transient, migratory workers would do nothing to enhance  
               public safety."

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Professional Firefighters
          California Teamsters Public Affairs Council
          International Association of Heat and Frost Insulators, Local 5
          International Brotherhood of Boilermakers, Western States  
          Section
          State Building and Construction Trades Council of California  
          (sponsor)
           
            Opposition 
           
          None on file.


           Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091