BILL ANALYSIS Ó Senate Committee on Labor and Industrial Relations Ben Hueso, Chair Date of Hearing: January 15, 2014 2013-2014 Regular Session Consultant: Deanna D. Ping Fiscal: Yes Urgency: No Bill No: SB 266 Author: Lieu As Introduced/Amended: January 6, 2014 SUBJECT Prevailing wages. KEY ISSUE Should the legislature clarify the notification of completion process for public works projects? ANALYSIS Existing law defines "public works" to include, among other jobs, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds. (Labor Code §1720) Under existing law , "paid for in whole or in part out of public funds" means, among other things, the following: 1. The payment of money or the equivalent of money by the state or political subdivision directly to or on behalf of the public works contractor, subcontractor, or developer. 2. The performance of construction work by the state or political subdivision in execution of the project. 3. Fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, that are paid, reduced, charged at less than fair market value, waived, or forgiven by the state or political subdivision. 4. Money loaned by the state or political subdivision that is to be repaid on a contingent basis. (Labor Code §1720) Existing law defines "awarding body" or "body awarding the contract" as the department, board, authority, officer or agent awarding a contract for public work. (Labor Code §1722) Existing law requires all employees who work on public works projects costing $1,000 or more to be paid the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work for the specific location where the public work is to be performed. (Labor Code §1771) Existing law states the person filing a notice of completion in the office of the county recorder shall at the same time also provide notice to the Labor Commissioner, in a manner determined by the Labor Commissioner. (Labor Code §1741.1) Existing law also states that the awarding body or political subdivision accepting a public work shall provide notice of that acceptance to the Labor Commissioner within five days of the acceptance, in a manner determined by the Labor Commissioner. (Labor Code §1741.1) Existing law states that the 180 day period for service of assessments shall be tolled for the length of time notice is not given in a timely manner to the Labor Commissioner. (Labor Code §1741.1) This Bill clarifies the procedure for providing notice of completion or acceptance of a public work to the Labor Commissioner. Specifically, this bill : Requires, within 10 days after receipt of a written request from the Labor Commissioner, the awarding body to furnish a copy of the valid notice of completion or a document evidencing acceptance of a public work, whichever occurs later, to the Labor Commissioner by first-class mail. States that if no document has been filed to the office Hearing Date: January 15, 2014 SB 266 Consultant: Deanna D. Ping Page 2 Senate Committee on Labor and Industrial Relations of the county recorder and there is no document evidencing the awarding body's acceptance of the public work on a particular date then the awarding body shall notify the office of the Labor Commissioner. Requires that after the notification of no documentation, the awarding body must supply copies of the applicable document within 10 days after filing a valid notice of completion with the county recorder's office or the awarding body's acceptance of the public work. States that if the awarding body fails to timely furnish the Labor Commissioner with the documents identified the period for service of assessments shall be tolled until the Labor Commissioner's actual receipt of the valid notice of completion or a document evidencing the awarding body's acceptance of the public work. COMMENTS 1. Need for this bill? Last year, the author introduced SB 377 a bill that sought to streamline the determination process for public works projects to ensure workers receive the legally mandated prevailing wage. Among other things, SB 377 required that an awarding body notify the Director of Industrial Relations and Labor Commissioner if a project is not a public works. Additionally, SB 377 imposed a time limit on the process for the determination of a project's public work status and penalty assessment in order to alleviate the long wait time many workers experienced. SB 377 was signed into law by Governor Brown. In his signing message, Governor Brown asked the legislature to send him a bill the following year to streamline the notice of completion process outlined in SB 377. According to the author's office, SB 266 was drafted to address the Governor's request and ensure the efficient implementation of the bill. Current law states that a notice of completion must be provided to the Labor Commissioner in a manner determined by the Labor Hearing Date: January 15, 2014 SB 266 Consultant: Deanna D. Ping Page 3 Senate Committee on Labor and Industrial Relations Commissioner. SB 266 would clarify the notice of completion process including a 10 day deadline for furnishing the documents requested by the Labor Commissioner. 2. Proponent Arguments : According to the author's office, despite current law requiring an awarding body to file a notice of completion with both the office of the county recorder and the Labor Commissioner, the code remains vague on the exact process of filing a notice of completion to the Labor Commissioner. The author's office contends that SB 266 clarifies any ambiguity by outlining the steps for furnishing the proper documentation to the Labor Commissioner. 3. Opponent Arguments : None received. 4. Prior Legislation : SB 377 (Lieu), Chapter 780, Statutes of 2013 - created a notification requirement for an awarding body when a project is not a public works, imposed a time limit on public works determinations and civil wage and penalty assessments, and tolled the 180 day statue to after the receipt of the public works determination. SUPPORT None received. OPPOSITION None received. Hearing Date: January 15, 2014 SB 266 Consultant: Deanna D. Ping Page 4 Senate Committee on Labor and Industrial Relations Hearing Date: January 15, 2014 SB 266 Consultant: Deanna D. Ping Page 5 Senate Committee on Labor and Industrial Relations