BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 327


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          Date of Hearing:  May 6, 2015


                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT


                               Roger Hernández, Chair


          AB 327  
          (Gordon) - As Amended April 30, 2015


          SUBJECT:  Public works:  volunteers


          SUMMARY:  Extends the sunset date on a public works exemption  
          for specified "volunteers" and other related individuals.   
          Specifically, this bill:  


          1)Extends the current January 1, 2017 sunset date in existing  
            law until January 1, 2024.


          2)Makes related technical and conforming changes.


          EXISTING LAW:


          1) Requires the prevailing wage rate to be paid to all workers  
             on public works projects over $1,000.

          2) Defines "public work" to include, among other things,  
             construction, alteration, demolition, installation or repair  
             work done under contract and paid for in whole or in part out  
             of public funds.









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          3) Provides that the provisions of existing law dealing with the  
             payment of prevailing wages on public works projects do not  
             apply to work performed by a volunteer or volunteer  
             coordinator, as defined.

          4) Defines a "volunteer" as an individual who performs work for  
             civic, charitable, or humanitarian reasons for a public  
             agency or 501 (c)(3) tax-exempt organization without promise,  
             expectation, or receipt of any compensation for work  
             performed.

          5) Defines a "volunteer coordinator" as an individual paid by a  
             corporation or 501(c)(3) tax-exempt organization to oversee  
             or supervise volunteers.

          6) Clarifies that an individual may be considered a "volunteer  
             coordinator" even if the individual performs some  
             non-supervisory work on a project alongside the volunteers,  
             so long as the individual's primary responsibility is to  
             supervise.

          7) Specifies that an individual shall be considered a volunteer  
             only when his or her services are offered freely and without  
             pressure and coercion, direct or implied, from an employer.

          8) Authorizes a volunteer to receive reasonable meals, lodging,  
             transportation, and incidental expenses or nominal  
             non-monetary awards if those benefits and payments are not a  
             substitute form of compensation.

          9) Excludes from the definition of volunteer an individual if  
             that person is otherwise employed for compensation at any  
             time (a) in the construction, alteration, demolition,  
             installation, repair, or maintenance work on the same  
             project, or (2) by a contractor, other than a 501(c)(3)  
             tax-exempt organization, that is receiving payment to perform  
             construction, alteration, demolition, installation, repair or  
             maintenance work on the same project.









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          10)Provides that the provisions of existing law dealing with the  
             payment of prevailing wages on public works projects do not  
             apply to work performed by members of the California  
             Conservation Corps or a certified Community Conservation  
             Corps.

          11)Provides a January 1, 2017 sunset date to these provisions.

          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  This bill revisits an issue that arose in 2004  
          concerning the use of volunteer labor on certain public works  
          projects.  Much of the attention that arose at that time was a  
          result of an enforcement action taken by the Department of  
          Industrial Relations (DIR) in July 2003 in relation to a stream  
          restoration project in Shasta County.


          Brief Background on California Prevailing Wage Law





          A feature of California law since the 1930s, existing law  
          generally requires that prevailing wages be paid to all workers  
          employed on public works projects.  (Labor Code Section 1771).   
          Current law defines a "public work" as construction, alteration,  
          demolition, installation, or repair work done under contract and  
          paid for in whole or in part out of public funds.  (Labor Code  
          Section 1720).





          Advocates of prevailing wage laws generally argue that such  








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          protections serve two important functions.  First, such laws  
          ensure that skilled workers employed in public works projects  
          are paid at least the wages and benefits that "prevail" in their  
          local communities.  Second, proponents of prevailing wages argue  
          that such laws make sure that unscrupulous contractors do not  
          import unskilled or low skilled workers from other parts of the  
          country who would undercut the local workforce by working for  
          lower pay.





          SB 975 (Alarcon), Chapter 1048, Statutes of 2002, among other  
          things, established a definition of "paid for in whole or in  
          part out of public funds" that conformed to several precedential  
          coverage decisions made by DIR.  These coverage decisions  
          defined payment by land, reimbursement plans, installation,  
          grants, waiver of fees, and other types of public subsidy as  
          "public funds" for purposes of prevailing wage law.





          The Labor Code also sets forth a statutory methodology for  
          determining the prevailing wage rate.  (Labor Code Section  
          1773.9).  This methodology defines the prevailing rate as the  
          single rate being paid to a majority of workers engaged in a  
          particular craft, classification, or type of work within the  
          locality and in the nearest labor market area.  Where no single  
          rate is being paid to a majority of workers the prevailing rate  
          is the single rate being paid to the greatest number of workers  
          (also referred to as the "modal rate").


          










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          The Prior Labor Code Public Works "Volunteer" Exemption





          Prior to 2004, Section 1720.4 of the Labor Code, originally  
          enacted in 1989, provided that "public works" shall not include  
          any otherwise covered work that meets all of the following  
          conditions:





               (a)The work is performed  entirely  by volunteer labor.
               (a)The work involves facilities or structures which are, or  
                 will be, used exclusively by, or primarily for or on  
                 behalf of, private nonprofit community organizations  
                 including, but not limited to, charitable, youth,  
                 service, veterans, and sports groups or associations.
               (b)The work will not have an adverse impact on employment.
               (c)The work is approved by the Director of Industrial  
                 Relations as meeting the requirements of this section.



          The previous section 1720.4 also required the Director of DIR to  
          request information on whether or not the work will have an  
          adverse impact on employment from the appropriate local or state  
          organization of duly authorized employee representatives of  
          workers employed on public works.


          The July 2003 DIR Enforcement Action












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          Significant media attention and controversy over this issue  
          following a July 2003 enforcement action by DIR stemming from a  
          stream restoration project in Shasta County.





          In fiscal year 2000-01, the Department of Water Resources  
          provided grant funding to the Sacramento Watersheds Action Group  
          for a stream restoration project on Sulphur Creek in the City of  
          Redding.  According to media reports, students from nearby  
          Shasta College were used for various activities including  
          planting seeds, clearing brush, repairing culverts, installing  
          rock beds to prevent erosion, and trash removal.  The students  
          reportedly earned course credit for classes in watershed  
          restoration.





          Responding to a complaint from a local labor organization, DIR  
          investigated and determined that, based on the submitted job  
          descriptions of the work performed by students and volunteers,  
          prevailing wages were required for the following work: willow  
          staking, spreading seeds and mulch, planting shrubs, operating  
          heavy equipment, site cleanup, off-hauling garbage, and planting  
          vegetation.  The subsequent DIR enforcement action assessed back  
          wages and civil penalties.  





          In September 2003, the Department of Water Resources (DWR)  
          issued a memorandum that stated, "Due to the serious  
          implications to our programs that would arise from being unable  








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          to support volunteerism, DWR is taking a conservative approach  
          until these issues can be clarified?We will not enter into any  
          new contracts possibly affected by these issues until we have a  
          clearer picture of the obligations of DWR and the grantees under  
          the Labor Code."




















          The 2004 Legislative Amendments to Labor Code Section 1720.4


          Following the July 2003 enforcement action, there was an outcry  
          among many in the environmental community that the prior Labor  
          Code Section 1720.4, as interpreted by DIR, effectively  
          prohibited the mixed use of volunteer and paid labor on public  
          works projects.


          After lengthy negotiations between the environmental community  
          and representatives of organized labor, the Legislature enacted  
          AB 2690 (Hancock), Chapter #330, Statutes of 2004.  AB 2690  
          amended Labor Code Section 1720.4 into its current form.








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          In order to address concerns that there may be abuses of any  
          "volunteer" exemption to California's prevailing wage laws, AB  
          2690 contained a January 1, 2009 sunset date. 


          The 2008 Sunset Extension and DIR Report


          AB 2537 (Furutani) of 2008 extended the sunset date until  
          January 1, 2012.  


          In addition, AB 2537 required DIR to submit a specified report  
          to the Legislature before January 1, 2011, regarding volunteers  
          on public works projects.  According to this report, there was  
          one complaint involving volunteer labor on public works projects  
          in 2009 and 2010.  In that case, a complaint was filed against a  
          contractor for failing to provide payroll reports for electrical  
          work done in a firehouse.  However, the fire chief for that  
          district issued a statement confirming that eight volunteer  
          firefighters were completing the electrical work on the  
          firehouse.


          Prior to that complaint, the only report of abuse received by  
          DIR was the initial complaint from 2003.


          AB 587 (Gordon) from 2011


          AB 587 (Gordon) from 2011 extended the sunset on the volunteer  
          exemption until January 1, 2017.  AB 587 also deleted the  
          obsolete language in the law that required the DIR to submit a  
          specified report to the Legislature before January 1, 2011,  
          regarding volunteers on public works projects.









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          ARGUMENTS IN SUPPORT


          According to the author, for more than 10 years, this exemption  
          has proven a vital tool in keeping Californians connected to  
          both their local community and our state's environment and  
          natural resources in a meaningful, productive way - and without  
          any examples of abuse having arisen.  This bill would extend  
          that exemption until 2024.  The author states that even though  
          California is currently experiencing a period of economic  
          recovery, extending this important provision will allow  
          California to continue to tap into one of our greatest resources  
          for healthy communities and the environment - volunteerism.


          The California State Parks Foundation and others argue more than  
          39,000 volunteers provide their time, talent and energy to the  
          state park system on a regular basis.  Especially as public  
          funding to our state parks has stretched existing staff thin, it  
          is important that this type of volunteerism continue and, in  
          fact, be encouraged by the state.  For this to continue,  
          however, it is critical that nonprofit organizations be able to  
          continue to recruit and deploy volunteers without the  
          requirement that those volunteers be paid prevailing wages.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Amigos de Bolsa Chica


          Amigos de los Rios








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          Anahuak Youth Sports Association


          Anderson Marsh Interpretive Association


          Arroyos & Foothill Conservancy


          Benicia State Parks Association


          Benicia Tree Foundation


          Big Sur Land Trust


          Bolsa Chica Land Trust


          Cache Cree Conservancy


          California Association of Local Conservation Corps


          California Association of School Business Officials


          California Council of Land Trusts (sponsor)


          California Environmental and Energy Consulting


          California Invasive Plant Council








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          California League of Conservation Voters


          California League of Park Associations & Friends of Pio Pico


          California Native Plant Society


          California Park and Recreation Society


          California ReLeaf


          California Special Districts Association


          California State Association of Counties


          California State Parks Foundation


          California State Railroad Museum Foundation


          California Urban Forests Council


          California Urban Streams Partnership


          California Waterfowl Association


          California Watershed Network








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          CalNonprofits


          Canopy


          Catalina Island Conservancy


          Cayucos Land Conservancy


          Chino Hills State Park Interpretive Association


          Citizens for East Shore Parks


          City of Burbank


          City of Indian Wells


          Common Vision


          Community Services Employment Training


          Construction Employers' Association


          Council for Watershed Health, Board of Directors


          Defenders of Wildlife








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          Ducks Unlimited


          East Bay Municipal Utility District


          East Bay Regional Park District


          Empire Mine Park Association


          Environment California


          Friends of Allensworth


          Friends of Balboa Park


          Friends of China Camp


          Friends of Harbors, Beaches and Parks


          Friends of Lakes Folsom and Natoma


          Friends of Mt Tam


          Friends of Palomar Mountain State Park


          Friends of the Urban Forest








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          Friends4Picacho


          Habitat for Humanity, California


          Hendy Woods Community


          Hollywood Beautification Team


          Huntington Beach Tree Society


          International Society of Arboriculture, Western Chapter


          Just One Tree


          Keep Eureka Beautiful


          Koreatown Youth and Community Center


          Lake County Land Trust


          Land Conservancy of San Luis Obispo County


          Land Trust of Santa Cruz County


          Lassen Land and Trails








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          League of California Cities


          League to Save Lake Tahoe, Keep Tahoe Blue


          Los Angeles Conservation Corps


          Los Angeles Neighborhood Land Trust


          Malibu Adamson House Foundation


          Marin Agricultural Land Trust


          McKinleyville Land Trust


          Mendocino Land Trust


          Mojave River Natural History Association


          Mountain Parks Foundation


          Mountains Recreation and Conservation Authority


          Mountains Restoration Trust


          Mounted Assistance Unit, California State Parks








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          Muir Heritage Land Trust


          Napa County Regional Park and Open Space District


          National Trust for Historic Preservation


          Natural Resources Defense Council


          North East Trees


          North Lake Tahoe Resort Association


          Northcoast Regional Land Trust


          Ojai Valley Land Conservancy


          Our City Forest


          Pacific Forest Trust


          Palos Verdes Pennisula Land Conservancy


          Peninsula Open Space Trust


          Pismo Beach CVB








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          Placer Land Trust


          Planning and Conservation League


          Poppy Reserve Mojave Desert Interpretive Association


          Redwood Parks Association


          Richmond Trees


          Riverside Land Conservancy


          Roseville Urban Forest Foundation


          Rural County Representatives of California


          Sacramento Tree Foundation


          San Joaquin River Parkway and Conservation Trust


          Santa Clara Valley Audubon Society


          Save Mount Diablo


          Save Our Forests








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          Save Our Heritage Organization


          Save the Bay


          Save the Redwoods League


          Sea and Desert Interpretive Association


          Sequoia Riverlands Trust


          Sierra Cascade Land Trust Council


          Sierra Club California


          Sierra Foothill Conservancy


          So. California Mountains Foundation


          Solano Advocates Green Environments


          Solano Land trust 


          Sonoma County Water Agency


          Sonoma Land Trust








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          Sports Leisure Vacations, LLC


          State Park Partners Coalition


          Tahoe Resource Conservation District


          The Wilderness Institute


          Torrey Pines Docent Society


          Tree Davis


          Tree Foundation of Kern


          Tree Fresno


          Tree Lodi


          Tree Musketeers


          Tree Partners Foundation


          Tree San Diego


          TreePeople








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          Trout Unlimited


          Truckee Donner Land Trust


          Trust for Public Land


          Urban Conservation Corps of the Inland Empire


          Urban Corps of San Diego County


          Urban ReLeaf


          Urban Tree Foundation


          Victoria Avenue Forever


          Waddell Creek Association


          West Hollywood Tree Preservation Society


          Western Chapter, International Society of Aboriculture


          Wildlife Heritage Foundation


          Woodland Tree Foundation








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          Your Children's Trees




          Opposition


          None on file.




          Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091