BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 54
                                                                  Page  1

          Date of Hearing:   August 30, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   SB 54 (Hancock) - As Amended:  August 21, 2013 

          Policy Committee:                             Labor and  
          Employment   Vote:                            5-2

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires an owner/operator of specified stationary  
          sources (entities that deal with hazardous material) that  
          contract for the performance of construction, alteration,  
          demolition, installation, repair, or maintenance work, to  
          require subcontractors and contractors to use a skilled and  
          trained workforce to perform all onsite work within an  
          apprenticeable occupation in the building and construction  
          trades.    

           FISCAL EFFECT  

          Annual, special fund costs, between $900,000 and $1.6 million,  
          to the Department of Industrial Relations (DIR) to adequately  
          enforce this measure.  These costs are associated with  
          additional training and staff.  

           SUMMARY CONTINUED  
           
          1)Defines skilled and trained workforce as a workforce that  
            meets the following: 

             a)   All the workers are either registered apprentices or  
               skilled journeypersons, as specified. 
             b)   As of January 1, 2014, at least 30% of the skilled  
               journeypersons are apprenticeship program graduates for the  
               applicable occupation that was either approved by the  
               Division of Apprenticeship Standards (DAS) or located  
               outside the state and approved for federal purposes. 
             c)   As of January 1, 2015, at least 45% of the skilled  
               journeypersons are apprenticeship program graduates for the  








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               applicable occupation that was either approved by DAS or  
               located outside the state and approved for federal  
               purposes. 
             d)   As of January 1, 2016, at least 60% of the skilled  
               journeypersons are apprenticeship program graduates for the  
               applicable occupation that was either approved by DAS or  
               located outside the state and approved for federal  
               purposes.

          2)Authorizes the Chief of DAS, by January 1, 2016, to approve a  
            curriculum of in-person classroom and laboratory instruction  
            for approved advanced safety training for workers at high  
            hazard facilities.  Further authorizes the training to be  
            provided by a DAS approved apprenticeship program or by a  
            program provided by the California Community Colleges, as  
            specified.  

          3)Specifies the provisions of this bill do not apply to the  
            following: 

             a)   Contracts awarded before January 1, 2014, unless the  
               contract is extended or renewed after this date.  
             b)   Employees of the owner/operator of the stationary  
               source, as specified.  

          4)Waives the qualification requirements for skilled  
            journeypersons in either of the following instances: 

             a)   An emergency that requires immediate action to prevent  
               harm to public health or safety or to the environment, to  
               the extent compliance to this measure is impracticable, as  
               specified.  
             b)   To the extent the contractor has requested qualified  
               workers from local hiring halls, but is unable to obtain  
               sufficient workers within 48 hours of the request.  

           COMMENTS  

           1)Rationale  .  In 2012, Governor Brown established an interagency  
            workgroup in the aftermath of the fire at Chevron Corp. oil  
            refinery in Richmond, CA.  The workgroup was charged with  
            examining "ways to improve public and worker safety through  
            enhanced oversight of refineries, and to strengthen emergency  
            preparedness in anticipation of any future incident."  The  
            group consisted of participants from 13 agencies and  








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            departments, as well as the governor's office.

            In July 2013, the workgroup released a draft report entitled:  
            Improving Public and Worker Safety at Oil Refineries.  The  
            draft document includes findings and recommendations relating  
            to emergency response/preparedness, regulation/oversight,  
            community education/alerts, and safety/prevention of hazardous  
            events.  The workgroup met with stakeholders, including  
            labor/workforce groups, to gain their input on determining  
            their findings and recommendations.  The report states: 

            "Workers involved in maintenance, represented by building and  
            construction trades unions, reported that training of most  
            maintenance workers is inadequate. They also reported that  
            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."

            According to the author, "This bill, [sponsored by the State  
            Building and Construction Trades Council], will reduce  
            unqualified workers performing skilled work inside high-hazard  
            industrial facilities by requiring that by 2016 60% of each  
            contractor's workforce be graduates of a state-approved  
            apprenticeship program.  The contractors at these facilities  
            should be using the most skilled and qualified workers to  
            reduce public health and safety risks."

           2)Opposition  .  The opponents of this measure, the Association of  
            Builders and Contractors, Western Electrical Contractors,  
            Plumbing-Heating-Cooling Contractors Association of  
            California, and the Air Conditioning Trade Association, argue  
            this bill expands prevailing wage provisions to private  
            construction work.  Specifically, they argue this expansion  
            violates case law - Chamber of Commerce of U.S. vs. Bragdon,  
            64 F.3d 497 (1995): "In this case the Court of Appeals found  
            that a County ordinance requiring employers to pay prevailing  
            wages to their employees on certain types of private  
            industrial construction projects affected the collective  
            bargaining process in a way that was incompatible with the  
            general goals of the National Labor Relations Act (NLRA), and  
            accordingly, was preempted by NLRA." 

           3)Existing law  .  The California Accidental Release Prevention  








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            (CalARP) Program was implemented on January 1, 1997 and  
            replaced the California Risk Management and Prevention  
            Program.  The CalARP program is meant 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.  CalARP  
            requires 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.  
           
             Statute also changes DAS, within DIR, with the responsibility  
            of administering California apprenticeship law, and enforcing  
            apprenticeship standards for wages, hours, working conditions  
            and the specific skills required for state certification as a  
            journeyperson in an apprenticeable occupation. Also within  
            DIR, the Division of Occupational Safety and Health is tasked  
            with protecting workers from health and safety hazards on the  
            job.

           4)Related legislation  . SB 436 (Hancock), pending in this  
            committee, requires a refinery employer, by September 15 each  
            year, to submit to the Division of Occupational Safety and  
            Health a full schedule of planned turnarounds for the various  
            plants for the following calendar year.


           Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916)  
          319-2081