BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 677
                                                                  Page  1

          Date of Hearing:   May 6, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                   AB 677 (Solorio) - As Amended:  April 14, 2009 

          Policy Committee:                              Labor and  
          Employment   Vote:                            5-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill provides that certain work related to renewable energy  
          generation is considered "public works" for purposes of  
          prevailing wage law. The prevailing wage provisions apply when:

          1 The work is performed in connection with the construction or  
            maintenance of renewable energy generation specifically to  
            serve a school district or community college district.

          2)The work is performed in connection with a long-term (at least  
            five-years) arrangement for the benefit of the school district  
            or community college district.

           FISCAL EFFECT  

          Annual costs, potentially in the range of $150,000 to DIR to  
          expand prevailing wages calculations, to revise regulations, and  
          enforce expanded application of prevailing wage laws.

           COMMENTS  

           1)Rationale  . This bill is proposed to provide wage protections  
            to workers involved in renewable energy sites. The sponsors  
            (State Building and Construction Trades Council) argue that  
            without these protections, contractors bidding for state money  
            could undercut prevailing wages in a given area by 20% to 30%  
            and ultimately hurt vulnerable workers and their families.

           2)Background.   Current law requires the prevailing wage rate to  
            be paid to all workers on "public works" projects over $1,000.  
            These rates are established and issued by the Department of  








                                                                  AB 677
                                                                  Page  2

            Industrial Relations, Division of Labor Statistics and  
            Research and enforced by the DLSE. These laws do not apply to  
            workers hired for construction or maintenance of renewable  
            projects on public sites, such as schools.  
           
          3)Opponents  of the bill, including the Western Contractors  
            Association, state that it represents a significant and  
            unwarranted expansion of prevailing wage projects into energy  
            improvements, which will have a chilling effect on school  
            districts' ability to consider renewable energy projects, and  
            ultimately less investment and fewer jobs related to energy  
            savings projects.
           
          Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081