BILL ANALYSIS
SB 964
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Date of Hearing: June 28, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 964 (Alquist) - As Amended: June 30, 2010
SENATE VOTE : 23-11
SUBJECT : High-speed rail and workforce development planning
SUMMARY : Requires the California High-Speed Rail Authority
(Authority) and the California Employment Development Department
(EDD) to collaboratively prepare a labor market assessment of
the workforce needs associated with the construction, operation,
and maintenance of the high-speed train system. Specifically,
this bill :
1)Makes various findings and declarations relative to the need
for skilled and specialized labor force to construct, operate,
and maintain the high-speed train system. Declares that it is
appropriate to use funds from the Safe, Reliable High-Speed
Passenger Train Bond Act for the 21st Century (High-Speed Rail
Bond Act) for these purposes.
2)Requires Authority to contract with EDD to collaboratively
develop a labor market assessment of the projected needs and
deficiencies of the workforce necessary to complete the
construction, operation, and maintenance of the high-speed
train network.
3)Requires the assessment to include a recommended strategy to
ensure that workforce training programs are available to
facilitate the availability of an in-state workforce for
construction of the project to the maximum extent feasible.
4)Requires the cooperative sharing of workforce assessment
information between EDD and the Mineta Transportation
Institute at the California State University at San Jose.
Requires EDD to also consult with other ongoing rail transit
assessment efforts related to workforce training.
5)Requires Authority and EDD to jointly establish an advisory
committee, as specified, to advise them on the availability of
skilled labor force by region for the construction, operation,
and maintenance of the high-speed trail system, the
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availability of workforce training programs, and the
availability of funding for those programs.
6)Requires the assessment to be submitted to the Legislature by
January 1, 2012, and incorporated into the Authority's
biennial revised business plan.
7)Appropriates $500,000 of bond proceeds from the High-Speed
Rail Bond Act to the Authority from funds set aside for
environmental studies, planning and preliminary engineering
activities.
8)Sunsets this bill's provisions on January 1, 2016.
EXISTING LAW :
1)Enacts the High-Speed Rail Bond Act, approved as Proposition
1A in November 2008, that authorizes the sale of $9.95 billion
in general obligation bonds to fund the planning and
construction of a high-speed passenger train system and
complementary improvements to other specified rail systems in
the state. Authorizes the Legislature to establish conditions
and criteria on funds appropriated for planning and capital
costs. Requires Authority, prior to expending bond funding
for the construction and acquisition of equipment and
property, to submit concurrently to California Department of
Finance and the Joint Legislative Budget Committee, a detailed
funding plan for each corridor or usable segment.
2)Limits the expenditure of bond revenues for the construction
of the high-speed rail system to not more than 50% of the cost
of building the system and not more than 10% of bond proceeds
to environmental studies, planning, and preliminary
engineering ($900 million). Establishes a limit of 2% (with
potential for increase to 5%) of the bond proceeds for the
administration of the Authority ($225 million up to $450
million).
3)Authorizes, through enactment of the federal American Recovery
and Reinvestment Act of 2009 (the recently enacted federal
economic stimulus package referred to as "ARRA"), $2.25
billion for high-speed rail passenger service development in
California. The federal award requires that construction on
the project must begin by September 2012.
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4)Creates EDD and authorizes it to offer services and programs
related to job placement, workforce investment, labor market
information, and management of State Disability Insurance.
FISCAL EFFECT : According to the Senate Appropriations
Committee, costs of $500,000 to the High-Speed Rail Bond Act
fund. Potential cost pressures to fund training programs to the
extent that deficiencies exist.
COMMENTS : Following the passage of the High-Speed Rail Bond
Act, the Authority will be transitioning from a small study and
planning organization to a multi-billion dollar engineering and
construction entity. In order to construct the 800-mile
statewide high-speed rail passenger system, the author indicates
that "The Authority is concerned that California may not have
the trained workforce it needs to design, build, operate, and
maintain an electrified rail system that is designed to avoid a
collision rather than the traditional approach of surviving a
collision as is currently the case with heavy rail that is used
for existing passenger rail in the U.S." They further contend
that the state may need specialized electrical engineers and
train operators, renewable energy specialists, and software
engineers. Accordingly, the author believes that it is
important for the state to create an inventory of skills
required to successfully construct and operate a high-speed
train system. This workforce information will allow a
determination to be made as to the exact skills sets that a
training program should focus. They expect, eventually, that
the rail project will create, from 2009-2030, about 600,000
full-time, one-year construction-related jobs.
This bill would require the Authority to contract with EDD to
provide a labor market assessment of high-speed rail workforce
skills to aid the Authority in planning the construction of the
high-speed train system. These two entities would jointly
establish an advisory committee to comment on the availability
of a skilled labor force by region for the construction,
operation, and maintenance of the high-speed trail system, the
availability of workforce training programs, and the
availability of funding for those programs. EDD is to provide
the assessment to specified committees of the Legislature by
January 1, 2012. The assessment is to be incorporated into the
Authority's business plan.
Federal high-speed rail workforce evaluation efforts and the
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Mineta Transportation Institute at the California State
University at San Jose (MTI) : MTI was created by Congress in
1991 as a national University Transportation Center,
specializing in policy studies related to surface
transportation. At the national level, there is recognition
that the nation's transportation system depends at its core on a
highly skilled and qualified workforce, both now and in the
future. Policy makers recognize that delivering and managing
transportation systems and services will require greater skills
in areas such as financing, project management, sustainability,
livable communities, and greater public engagement. These
skills go beyond traditional engineering disciplines, which are
themselves expanding to reflect new materials and technologies.
Such is the case with the impending development of the
California's high-speed rail passenger system.
MTI is currently conducting a federally funded project on
workforce development and skill requirements for the
construction, operation, and maintenance of the California
high-speed rail system. The effort is to conclude by the end of
2010 and will, according to MTI, "provide firm estimates of the
workforce development needs associated with high-speed rail in
California and in thirteen other high-speed rail corridors
across the United States. The final report will link employment
to specific fields, academic disciplines, and degree providers.
The results will be used by this task force and others to help
fashion an appropriate response by institutions of higher
learning in California." (The institutions of higher learning
are references to the California State University and University
of California systems and the community colleges system.)
Current labor-management partnerships : Additionally, at the
national level, the transit industry is building effective
labor-management partnerships to address its critical skills
challenges resulting from changing technology and shifting
workforce demographics. The American Public Transportation
Association (APTA) and the Amalgamated Transit Union , along
with other labor unions, with support from the Transportation
Learning Center, are working together to develop a system of
consensus training guidelines. Meeting regularly for several
years, the labor-management partnerships are working to
strengthen workforce training, recently producing a system of
consensus training guidelines. The guidelines make it possible
for transit organizations and partnerships to assess the current
skills of their workforce through a skills gap analysis.
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Appropriate expenditure of bond funds and state general
obligation bond law? The governing high-speed rail statutes
specify the uses of bond revenues and also restrict, to 10%, the
amount of bond funds to be expended on environmental studies,
planning, and preliminary engineering ($900 million). Under the
provisions of this bill, the workforce development assessment
would be funded from the 10% set aside for planning studies and
engineering design. One could justify that the use of bond
revenues for assessing workforce labor skills is consistent with
the stated allowable expenditure purposes in terms of general
project planning and construction/maintenance workforce planning.
However, the funding of subsequent efforts for the development
of instructional curriculum or the conduct of the training
classes, extending beyond planning assessment efforts, would
appear to be inconsistent with the purposes of the bond funds set
aside for "planning" functions.
Furthermore, according to the Authority, they have roughly over
$750 million under contract for environmental studies, planning,
and preliminary engineering. Any additional significant
expenditure of bond funds for workforce assessments could push
beyond the limit the Authority's $900 million threshold as
established in law.
Business Plan of the Authority : This bill would require that
its EDD assessment be incorporated into the Authority's business
plan. Currently, the Authority's business plan makes no mention
of a skilled workforce needs evaluation to be either conducted
by them or any other entity. The business plan, however,
discusses at length various construction contracting
alternatives, such as design-build, design-build-operate,
design-build-operate-maintain, etc. Accordingly, one could
assume that the Authority's intentions were to use one or more
of these contracting options for the various corridors relying
on the engineering contractor or consortium to train and develop
the skilled laborers necessary to complete the contract. In
fact, some engineering firms confirmed this to be the case.
Additionally, according to the Senate Appropriations Committee,
"The provision of training programs could be one aspect of the
project in which the private sector could respond by providing
the tools necessary to ensure availability of a skilled in-state
workforce."
Support : Writing in support of this bill, the California Labor
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Federation indicates that "the building trades have been
particularly hard hit with unemployment rates of between 30-50%
in some areas. Thousands of skilled trades-people are sidelined
by the lack of jobs and California is losing out on their skills
and expertise. SB 964 will require an assessment of the current
workforce to identify where more training is needed so that when
the construction of high-speed rail gets underway, the project
is not slowed down by a lack of skilled workers in the
appropriate trades. The bill will coordinate the efforts of the
Authority, EDD, and the state's apprenticeship programs to make
sure that currently unemployed workers get the skills they need
to build high-speed rail."
Furthermore, according to the author, this bill is not
duplicative of the MTI project as that assessment is "primarily
looking at training needs throughout the country and ramping up
California's higher education segments to provide this training.
It is not a formal labor market assessment and it appears that,
while it will identify job skills and occupations needed to
implement the high-speed rail project, it will do this as a
secondary consideration. SB 964 envisions a formal labor market
assessment specific to California by the state agency that has
the expertise and experience in conducting these assessments.
Given the magnitude of the public investment in the high-speed
rail project, the Authority would benefit from its own focused
study."
Opposition : Writing is opposition to this bill on behalf of
employer associations, the Western Electrical Contractors
Association (WECA-IEC) contends that ''?there exists in
California a robust apprenticeship community of both Labor
organizations and employer associations who have been approved
by the State of California and the U.S. Department of Labor to
train and dispatch apprentices to public works projects such as
those necessary to construct California's high-speed rail
project. WECA-IEC for instance is the only such program
approved by the state of California to train and dispatch
electrician apprentices statewide but it is not a Labor
organization. While your bill permits other groups, such as
WECA-IEC to be invited to participate, it mandates that Labor
organizations be part of the task force."
Related bill : SB 372 (Steinberg) of 2007, would have required
the California Superintendent of Public Instruction to develop
an inventory of educational and vocational training programs and
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related courses to meet the demand for skills and training that
will be required for the implementation and operation of the
California High-Speed Rail System. That bill was held in the
Senate Appropriations suspense file.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation
California State Council of Laborers
California Teamsters Public Affairs Council
Professionals Engineers in California Government (PECG)
Santa Clara Valley Transportation Authority
State Building and Construction Trades Council of California
Opposition
Western Electrical Contractors Association (WECA-IEC) and
California Chapters of American Fire Sprinkler Association -
Oppose Unless Amended (Object to not having explicit
authorization for advisory committee membership)
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093