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

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               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