BILL ANALYSIS Ó
SB 693
Page 1
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 693
(Hueso) - As Amended June 27, 2016
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| |Labor and Employment | |6 - 1 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill consolidates "skilled and trained workforce"
requirements of various provisions of existing law related to
alternative construction delivery methods. Specifically, this
bill:
1)Authorizes a public entity to require a bidder, contractor or
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other entity to use a "skilled and trained workforce" to
complete a contract or project regardless of whether the
public entity is required to do so by a statute or regulation.
2)Deletes various provisions of exiting law relative to "skilled
and trained workforce" and instead establishes a new
comprehensive section of the Public Contract Code applicable
whenever any public entity is required by statute or
regulation to obtain an enforceable commitment that a bidder,
contractor, or other entity will use a skilled and trained
workforce.
3)Defines a "skilled and trained workforce" to mean a workforce
that meets all of the following conditions:
a) All the workers performing work in an apprenticeable
occupation in the building and construction trades are
either skilled journeypersons or apprentices registered in
a state-approved apprenticeship program.
b) For work performed on or after January 1, 2017, at least
30 percent of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
c) For work performed on or after January 1, 2018, at least
40 percent of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
d) For work performed on or after January 1, 2019, at least
50 percent of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
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e) For work performed on or after January 1, 2020, at least
60 percent of the skilled journeypersons are graduates of
an apprenticeship program, as specified.
4)Provides that a subcontractor need not meet the apprenticeship
graduation requirements if the subcontractor was not listed as
a subcontractor or a substitute for a listed subcontractor and
the subcontract does not exceed one-half of one percent of the
price of the prime contract.
5)Specifies, if the entity fails to provide the monthly report
(currently required under existing law), or the report does
not demonstrate compliance with the use of skilled and trained
workforce, the public agency or other awarding body must
withhold further payment until a complete report is provided
or plans for compliance are provided.
6)Clarifies provisions of existing law related to construction
and related work performed at petroleum refineries and
petrochemical manufacturing facilities do not preclude the use
of an alternative workweek schedule, consistent with existing
law.
7)Specifies amendments made by this bill do not apply to
contracts that were advertised for bid or awarded before
January 1, 2017.
FISCAL EFFECT:
Administrative costs to the Department of Industrial Relations
(DIR) Division of Apprenticeship Standards (DAS) of
approximately $123,000 in the first year and $116,000 ongoing
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(special funds), to respond to skilled workforce requirement
inquires. According to DIR, the DAS has experienced an increase
in calls from awarding bodies and contractors regarding recently
enacted skilled workforce requirements. This bill expands the
scope of awarding bodies that would be authorized to institute a
skilled workforce requirement and would likely increase the
number of compliance inquiries.
COMMENTS:
1)Purpose. Over the last few years, the Legislature passed and
the Governor signed several bills requiring use of a "skilled
and trained workforce" on projects that utilize design-build,
lease/leaseback, and best-value construction models. The State
Building and Construction Trades Council are sponsoring this
bill to unify existing statutes with regard to the use of a
skilled and trained workforce. The purpose of the bill is to
ease compliance and implementation issues, streamline
reporting requirements, and clarify enforcement provisions.
The Coalition for Adequate School Housing (CASH) also supports
this bill, stating that it will streamline processes and
clarify the relationship between project labor agreements and
the skilled workforce requirements for design-build,
best-value, and lease-leaseback school facility projects.
These changes will assist school districts with appropriate
implement of these school construction methods.
2)Prior related legislation.
a) SB 54 (Hancock), Chapter 795, Statutes of 2013, requires
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an owner or operator of specified stationary sources
(petroleum refineries and petrochemical manufacturing
facilities), when contracting for the performance of
construction, maintenance and related work, to require that
its contractors and any subcontractors use a "skilled and
trained workforce" to perform all onsite work within an
apprenticeable occupation in the building and construction
trades.
b) SB 785 (Wolk), Chapter 931, Statutes of 2014, enacted
uniform provisions for the Department of General Services,
the California Department of Corrections and
Rehabilitation, local agencies, cities and counties using
the design-build method.
c) AB 566 (O'Donnell), Chapter 214, Statutes of 2015,
prohibits a governing board of a school district from
entering into a lease-leaseback or lease-to-own contract
unless the entity commits that the entity and its
subcontractors at every tier will use a skilled and trained
workforce.
d) AB 1358 (Dababneh), Chapter 752, Statutes of 2015,
aligned the process for school districts awarding contracts
through the design-build method with the design-build
process established for state and local agencies.
e) AB 1185 (Ridley-Thomas), Chapter 784, Statutes of 2015,
authorized the Los Angeles Unified School District to
utilize a best value procurement process as a pilot project
until January 1, 2021, for construction projects over $1
million.
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f) SB 762 (Wolk), Chapter 627, Statutes of 2015, allows
seven counties to award construction contracts through a
"best value" procurement process and modifies the
definitions of "best value" in statutes allowing the state
and local government officials to use the design-build
contracting method for some public works.
Analysis Prepared by:Misty Feusahrens / APPR. / (916)
319-2081