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 SB 54 Page 2 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 SB 54 Page 3 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 SB 54 Page 4 (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