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,    |
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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. 










                                                                     AB 219


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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