BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               AB 1308      Hearing Date:    June 10,  
          2015 
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          |Author:    |Perea                                                |
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          |Version:   |February 27, 2015                                    |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Gideon Baum                                          |
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                    Subject:  Apprenticeship programs: approval.


          KEY ISSUE
          
          Should the Legislature strengthen and expand the requirements  
          for approving new apprenticeship programs?


          ANALYSIS
          
           Existing law  provides a framework for promoting and developing  
          apprenticeship training through the California Apprenticeship  
          Council (CAC) and the Division of Apprenticeship Standards (DAS)  
          within the Department of Industrial Relations (DIR).  DAS  
          enforces apprenticeship standards for, among other things,  
          working conditions, classroom instruction and the specific  
          skills required for state certification as a journeyperson in an  
          apprentice occupation.

           Existing law  requires that all apprenticeship programs be  
          approved by the Chief of the Division of Apprenticeship  
          Standards.  Existing law empowers the Chief to approve  
          apprenticeship programs in any trade anywhere in the state,  
          including cities and trade areas, if the apprentice training  
          needs justify the creation of a program.  However, in order for  








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          the Chief to approve an apprenticeship program in the building  
          and construction trades, any of the following "needs-based"  
          conditions must be met:

             1)   There is no existing apprenticeship program serving the  
               same craft or trade and geographic area;

             2)   Existing apprenticeship programs that serve the same  
               craft or trade and geographic area do not have the  
               capacity, or neglect or refuse, to dispatch sufficient  
               apprentices to qualified employers at a public works site  
               who are willing to abide by the applicable apprenticeship  
               standards;

             3)   Existing apprenticeship programs approved under this  
               chapter that serve the same trade and geographic area have  
               been identified by the California Apprenticeship Council as  
               deficient in meeting their obligations.

               (Labor Code §3075)
           
          Existing law  requires that, for public works projects in excess  
          of $30,000, the contractor utilize apprentices for  
          apprenticeable crafts or trades. Prior to commencing work, the  
          contractor may apply to any apprenticeship program in the craft  
          or trade that can provide apprentices to the site of the public  
          work.  The apprenticeship program or programs, upon approving  
          the contractor, must arrange for the dispatch of apprentices to  
          the contractor.  (Labor Code §1777.5)

           Existing law  requires the ratio of work performed by apprentices  
          to journeymen employed in a particular craft or trade on the  
          public work may be  no less than the ratio of one hour of  
          apprentice work for five hours of journeyman work  , and no higher  
          than the ratio stipulated in the apprenticeship standards under  
          which the apprenticeship program operates.  
          (Labor Code §1777.5)
           
          This bill  would:

          1)Require that, in order to establish that apprenticeship  
            training needs justify the approval of a new program, existing  
            programs do not have the capacity, or neglect or refuse, to  
            dispatch sufficient apprentices to qualified employers who  
            "have requested apprentices", as shown by a "sustained pattern  







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            of unfilled requests."


          2)Eliminate a provision of existing law that authorizes the  
            California Apprenticeship Council to approve a new  
            apprenticeship program if special circumstances, as  
            established by regulation, justify the establishment of the  
            program.


          3)Provide that for purposes of this requirement, an existing  
            apprenticeship program serves the "same craft or trade" as a  
            proposed apprenticeship program when there would be a  
            substantial overlap in the work processes covered by the  
            programs or when graduates of the existing program would be  
            qualified to perform a substantial portion of the work that  
            would be performed by graduates of the new program.



          COMMENTS
          
          1.  Legislative Background:

            California's apprenticeship programs represent a unique and  
            important feature of the state's workforce development system.  
            The core idea is that, by combining both high quality  
            classroom instruction and high quality on-the-job training  
            experience, apprenticeship programs train high-quality  
            professionals in a variety of different fields and  
            professions. The building and construction trades make up 79%  
            of all of the apprentices in the state of California.

            However, some stakeholders have raised concerns with certain  
            apprenticeship programs that reportedly do not provide high  
            quality instruction and training. Instead, these low-quality  
            programs provide apprentices to meet the requirements of the  
            public works law without actually giving the apprentices the  
            necessary skills to perform the trades. One of the responses  
            to this was the creation of the "needs-based" requirement for  
            approval of new apprenticeship programs in 1999. 

            In 2002, in response to the needs test, the U.S. Department of  
            Labor (DOL) began the process of "derecognition," contending  
            that the amended apprenticeship statute did not conform to  







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            federal standards.  In early 2007, the "derecognition" of  
            California's apprenticeship programs became official. The DOL  
            decision continues to stand.

            According to stakeholders, the practical consequence of the  
            "derecognition" by DOL has been that apprenticeship programs  
            approved by DAS must request separate approval from the DOL.   
            Before "derecognition," federal approval was essentially  
            automatic.  Since that action, apprenticeship programs  
            approved by California reportedly have been approved by the  
            DOL as a matter of course.

          2.  Proponent Arguments  :
            
            This bill is sponsored by the State Building and Construction  
            Trades Council.  They argue that it provides much needed  
            clarification to DAS for the purpose of determining when an  
            existing program is deficient.  Adding "have requested  
            apprentices" to Section 3075(b)(2) clarifies that contractors  
            must actually request apprentices before existing programs may  
            be found to lack the capacity or willingness to dispatch them.  
              The sponsor states that during Governor Schwarzenegger's  
            administration, the DAS sought to rely on EDD projections of  
            future apprentice needs to justify approval of new programs  
            even though there was no evidence contractors had sought  
            apprentices from existing programs and were unable to receive  
            them.

          3.  Opponent Arguments  :

            Opponents write the following in opposition to this bill:

            "[This bill] perpetuates California's needs test for  
            apprenticeship. Economics Professor Charles Baird correctly  
            characterizes a needs test as '?a common device by which  
            regulatory bodies restrict competition from disfavored  
            interlopers.' While Baird does not specifically identify who  
            the interlopers are, they are frequently trade associations  
            who see an opportunity to train young men and women for  
            careers in construction.

            ?Unfortunately, [this bill] exacerbates the damaging aspects  
            of the needs test by adding ambiguous language and deleting  
            the very modest authority of the California Apprenticeship  
            Council to approve a new apprenticeship program 'justified by  







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            special circumstances by regulation.' While it may be  
            suggested that adding a requirement that there be a 'sustained  
            pattern of unfilled requests' to justify new apprenticeship  
            opportunities, we would argue that this vague requirement of  
            'sustained' will never be satisfactory to those who prefer  
            monopoly over fair and open competition and training  
            opportunities for all."

          4.  Prior Legislation  :

            AB 921 (Keeley), Chapter 903, Statutes of 1999, included,  
            among other things, the "needs-based" conditions for the  
            building and construction trades.


          

          SUPPORT
          
          State Building and Construction Trades Council (Sponsor)
          Construction Employers' Association
          
          OPPOSITION
          
          Air Conditioning Trade Association
          Plumbing-Heating-Cooling Contractors Association of California
          Western Electrical Contractors Association

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