BILL ANALYSIS Ó
AB 219
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CONCURRENCE IN SENATE AMENDMENTS
AB
219 (Daly)
As Amended August 31, 2015
Majority vote
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|ASSEMBLY: |52-27 |(June 3, 2015) |SENATE: | |(September 1, |
| | | | |24-13 |2015) |
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Original Committee Reference: L. & E.
SUMMARY: Expands the definition of "public works" to include
the hauling and delivery of ready-mixed concrete, as specified.
The Senate amendments:
1)Provide that the entity hauling or delivering ready-mixed
concrete shall be considered a subcontractor solely for the
purposes of a specified chapter of the code.
2)Provide that this bill applies to public works contracts that
are awarded on or after July 1, 2016.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the California Department of Transportation
AB 219
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(CalTrans) estimates that this bill would result in increased
costs of $21 million to $42 million (special funds), which
includes impacts to materials costs, compliance and
administration (see Staff Comments). The Department of
Industrial Relations (DIR) would incur first-year costs of
$127,000 and $119,000 in the out-years (special funds) to
monitor and enforce the bill's prevailing wage requirements for
non-CalTrans projects. To the extent that DIR issues additional
fines, special funds revenues would increase. The magnitude is
unknown. While the bill would impact CalTrans
disproportionately at the state level, it could also potentially
result in increased administrative, materials and compliance
costs to other departments that use ready-mix concrete.
COMMENTS: This bill is co-sponsored by the California Public
Affairs Council and the State Building and Construction Trades
Council, and would define "public works" for purposes of state
prevailing wage law to include the delivery of ready-mix
concrete.
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.
They conclude that this bill is about uniformity and a fair
application of the prevailing wage law to deliveries of
ready-mix and not about expanding prevailing wage to all
material drivers.
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Opponents contend that this bill ignores longstanding
distinctions in labor law between a driver and a construction
worker. In addition, they argue that it is inconsistent with
the contract between a supplier and a contractor. They note
that ready mix concrete is a finished product, delivered to the
site in an unfinished state pursuant to a purchase order.
Opponents also argue that this bill contravenes longstanding and
well-established legal precedent that material suppliers are not
subject to prevailing wage law. Finally, opponents argue that
this bill imposes significant new liability and administrative
burdens on prime contractors since, under California law, prime
contractors are jointly and severally liable for the payment of
prevailing wages by all subcontractors on a public work project.
This bill would expand that liability to include the payment of
prevailing wages by a material supplier providing ready-mixed
concrete to a public works construction jobsite.
Analysis Prepared by: Ben Ebbink / L. & E. /
(916) 319-2091 FN: 0001645