BILL ANALYSIS Ó
AB 219
Page 1
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
219 (Daly) - As Amended April 14, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill expands the definition of "public works" for purposes
of prevailing wage law to include the hauling and delivery of
ready-mixed concrete or asphaltic concrete to a public works
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site, with respect to contracts involving any state agency or
any political subdivision of the state. Specifically, this bill:
1)Provides that the "hauling and delivery of ready-mixed
concrete or asphaltic concrete to a public works site" means
the job duties for a ready mixer driver that are used by the
Department of Industrial Relations under existing law.
2)Provides that a person or entity may be a "contractor" or
"subcontractor" for purposes of specified existing law
regardless of whether the person or entity is subject to the
licensing requirements of the Contractors State Licensing
Board.
3)Provides that for purposes of this bill, an agreement with a
contractor or subcontractor to perform any public work is a
"contract" or "subcontract."
4)Provides that the expanded definition of "public works" does
not apply to contracts advertised for bid or awarded prior to
the effective date of this bill.
FISCAL EFFECT:
1)This bill may cause an increase in state and local government
contract costs assuming contractors/subcontractors are not
currently paying a prevailing wage to workers delivering
concrete. According to Caltrans, on average, the hourly rate
for ready-mixed drivers would increase from $16 per hour to
$34 per hour. Actual additional costs will depend on the
prevailing wage rate in each county, any resulting increase in
concrete and asphalt costs, and the portion of any contract
that involves the purchase and delivery of concrete or
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asphalt. Though the bill could impact any public works
contracts involving concrete or asphalt, it will predominantly
impact Caltrans and local transportation agencies. Caltrans
indicates that it currently has over $10 billion in
construction project under contract.
2)With regard to maintenance, Caltrans executes $350 million
worth of contracts annually. Assuming provisions of this bill
increase costs by 10%, the state could incur an additional $35
million in project costs. With regard to construction, this
bill will increase support costs on Caltrans contracts both
for inspection of the hauling activities and enforcement of
prevailing wage requirements under Caltrans' labor compliance
programs operations. Caltrans estimates costs of approximately
$1 million related to compliance.
3)Ongoing administrative costs of approximately $125,000
(special funds) for the Department of Industrial Relations
(DIR) Compliance Monitoring Unit (CMU) to monitor and enforce
the prevailing wage requirements of this measure. To the
extent this measure leads to an increase in the number of
prevailing wage fines issued by DIR, there will an increase in
special fund revenue.
COMMENTS:
1)Purpose. This bill, co-sponsored by the State Building and
Construction Trades Council of California, the California
Teamsters Public Affairs Council, and the California Labor
Federation, AFL-CIO, defines "public works" for purposes of
state prevailing wage law to include the delivery of ready-mix
concrete or asphaltic concrete.
Under current law, the delivery of ready-mixed or asphaltic
concrete for a public works project is covered under the
prevailing wage if either of the following occurs: 1) The
product is delivered by a driver hired by the on-site general
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contractor or a subcontractor; or 2) the product is
manufactured at a "dedicated" plant (i.e. one that is
established solely for the public works project).
The sponsors state that under the current material supplier
exemption to the prevailing wage law, delivery drivers hired
by a material supplier are exempted from the prevailing wage.
However, there is no physical distinction between the work
performed by ready-mix drivers employed by contractors and
ready-mix drivers employed by manufacturers, as the product
and work is identical. By expanding the prevailing wage to all
ready-mix drivers serving public works, this bill would create
a more fair application of the Labor Code that does not depend
on who owns the truck delivering the ready-mix or whether the
driver is employed by an onsite contractor or a cement
manufacturer.
2)Opposition. The bill is opposed by Associated General
Contractors and several ready-mix concrete companies. They
state this bill ignores longstanding distinctions in labor law
between a driver and a construction worker. They argue that
ready-mix concrete is delivered to construction sites by
drivers, whose training and duties pertain to driving. The
spreading, vibrating, testing and finishing of the concrete is
done by trained construction workers. Drivers do not
participate in on-site construction work, nor do they work
alongside the construction workers.
The opposition also states that ready mix concrete is a
finished product, delivered to the site in an unfinished
state; similar to paint, lumber or steel. Under the Uniform
Commercial Code, the delivery of materials is treated
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differently than construction. Material suppliers are only
responsible for delivery of material to a project site. Once
the product is delivered, it becomes the responsibility of the
contractor, a separate legal entity.
Further, opponents argue this bill contravenes legal precedent
that material suppliers are not subject to prevailing wage
law. They note that DIR has specifically addressed the
question of whether the prevailing wage applies in such cases.
They argue that the bill also potentially sets off a "chain
reaction" by targeting a single delivered product. If
delivered concrete is subject to prevailing wage law, what is
the legal footing and rationale for excluding the delivery of
lumber, steel, paint, welding materials, fuel and other
supplies?
Analysis Prepared by:Misty Feusahrens / APPR. / (916)
319-2081