BILL ANALYSIS
SB 1397
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Date of Hearing: June 23, 2010
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
SB 1397 (Corbett) - As Introduced: February 19, 2010
SENATE VOTE : 21-5
SUBJECT : Apprenticeship oversight.
SUMMARY : Amends various provisions of law related to the
approval of apprenticeship programs in the building and
construction industry. Specifically, this bill :
1)Provides that no two representatives of the six
representatives from employee organizations on the California
Apprenticeship Council (CAC) may be from the same national or
international labor organization.
2)Requires the following information to be submitted to the
Chief of the Division of Apprenticeship Standards (DAS) when
an apprenticeship program applies to create a new program or
expand an existing program:
a) A written plan that sets out the number of new
apprentices the applicant seeks to enroll during the next
five years, including the applicant's budget for training
the new apprentices and a detailed explanation of how the
applicant intends to provide sufficient funding to meet
that budget;
b) Evidence that the applicant has obtained sufficient
commitments from employers to employ the new apprentices so
as to ensure, to the extent feasible, that the new
apprentices will be employed continuously throughout the
term of the apprenticeship;
c) Evidence that the applicant has, or will obtain,
suitable facilities to train the new apprentices, and
d) A plan for the recruitment and selection of new
apprentices, including advertising the new apprenticeship
opportunities and outreach to organizations that promote
apprenticeship opportunities to women and underrepresented
minorities.
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3)Requires the Chief of DAS to disapprove the application where
the above requirements are not met or are deemed inadequate,
as specified, and set forth a process for an applicant to
amend its application.
4)Eliminates the requirement in existing law that the Division
of Apprenticeship Standards (DAS) randomly audit approved
apprenticeship programs during each five-year period, and
instead establishes the following new requirements for audits:
a) During an audit, DAS must attempt to contact a
statistically valid sample of apprentices that failed to
complete the apprenticeship program to ascertain the
reasons why the apprentices did not complete the program.
b) DAS is required to give priority in conducting audits to
programs that have been identified as having deficiencies.
c) DAS is required to audit all new or newly expanded
apprenticeship programs one year after the approval of
creating or expanding the program.
d) If DAS finds evidence that information provided to it by
a program has been purposefully misstated, it shall
immediately investigate and determine whether an audit is
necessary;
e) If DAS determines that a program has been the subject of
two or more meritorious complaints within a five-year
period, it shall schedule an audit within three months;
and,
f) If DAS determines that a program that has had at least
two graduating classes has an annual apprentice completion
rate below 50 percent of the average completion rate, it
shall schedule the program for an audit within three
months.
5)Requires each program to provide each apprentice, on at least
a semiannual basis, a statement showing specified information,
including the total number of hours of training and
instruction completed, and the number of hours required for
graduation, and the apprentice's expected graduation date.
6)Require programs to report apprentice registration, change of
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address, graduation, and termination data to DAS on a monthly
basis in an electronic format.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : Current law requires the DAS to audit apprenticeship
programs every five years to ensure that state standards are
being met and that the apprentices are being safely and
appropriately trained. However, according to DAS's most recent
annual report from 2007, there were 675 state-approved
apprenticeship programs, making audit activities difficult.
In place of the current auditing requirements, this bill focuses
the auditing process on programs that are new or newly expanded,
as well as programs that have low graduation rates, prior
meritorious complaints, or have purposefully misstated
information to DAS.
This bill also requires new or expanding programs to submit a
written report stating their long-term plans, their ability to
meet those plans, and a recruitment strategy that includes
outreach to women and underrepresented minorities. This bill
also establishes monthly electronic reporting requirements so
that DAS can track the progress of the programs, as well as
require reports be given to the apprentice so he or she can keep
track of his or her own progress.
ARGUMENTS IN SUPPORT :
Proponents argue that this bill is necessary because the DAS
should be given the tools to strengthen oversight and make
apprenticeship programs better. With the State of California
spending almost $31 million annually on apprenticeship training,
and private industry and labor contributing an additional $120
million annually in the construction industry alone, supporters
argue that it is important that we know how this substantial
investment is being spent.
Supporters believe that this bill establishes basic guidelines
for the approval or expansion of apprenticeship programs. Under
its provisions, the applicant would submit a written plan that
includes evidence of suitable facilities, the selection criteria
and recruitment plans for apprenticeship applicants, an estimate
of the number of apprentices for enrollment, and employer
commitments for on-the-job training and employment.
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ARGUMENTS IN OPPOSITION :
Opponents argue that this bill will impose onerous requirements
on apprenticeship program applicants at tremendous cost to the
DAS, and that requiring applicants to demonstrate adequate
funding, facilities, participating employers will burden them
with additional costs just as they are getting started. They
believe that this bill creates an unfair process where new
applicants will be placed under heavy scrutiny to which existing
programs were never subjected.
Finally, opponents object that this bill does not address the
impact of a 1999 law that imposed a "needs test" requirement for
the approval of new apprenticeship programs.
AB 921 (Keeley) of 1999 established a requirement that, in order
for DAS to approve an apprenticeship program, 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 applicable apprenticeship
standards;
3) Existing approved apprenticeship programs that serve
the same trade and geographic area have been identified
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as deficient in meeting their obligations<1>.
Opponents contend that this law has been "unfairly exploited by
construction unions to block the approval of new or expanding
programs, thus cutting competition in training and limiting the
choice in comprehensive training programs for people seeking a
career in the construction trades." Opponents indicate that
they might be able to remove their opposition to this bill if
amendments were added to repeal the "needs test" provisions from
current law.
PRIOR LEGISLATION :
This bill is nearly identical to AB 734 (Evans) of 2008, which
was vetoed by the Governor. The Governor's veto message stated
the following:
"This bill would amend membership criteria for the
California Apprenticeship Council (CAC), significantly
amend existing law with regard to auditing of
apprenticeship programs, and places new requirements
on new or expanding apprenticeship programs in the
building and construction trades.
While the auditing provisions are a vast improvement
in public policy over existing audit provisions,
changes to criteria for membership on the CAC and a
failure to address the 'needs test' for new or
----------------------
<1> 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
federal standards. In April 2005, an Administrative Law Judge
issued a proposed decision holding that the DOL has the right to
"derecognize" California's authority to regulate apprenticeship
on federal projects. The decision stated that the "needs test"
in the California Labor Code "does not promote competition among
programs, does not consider the needs of individuals seeking
apprenticeship training, and limits training opportunities for
apprentices." The DOL Administrative Review Board affirmed the
decision on January 31, 2007.
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expanding apprenticeship programs are cause for
concern. There has been no indication that current
criteria for membership is somehow inadequate or needs
to be addressed, and the failure to address the 'needs
test' will ensure that California's apprenticeship
programs will remain de-recognized by the federal
Department of Labor."
AB 947 (Niello) of 2007 would have removed the "needs test"
conditions for the approval of apprenticeship programs.
Testimony was taken on the bill, but it was not voted on at the
request of the author.
AB 2929 (Laird) of 2006 contained language that was similar to
this bill and to AB 734. It too was vetoed by Governor
Schwarzenegger because it did not address the "needs test".
AB 51 (Koretz) of 2005 would have, among other things, required
an apprenticeship program to graduate at least one apprentice
within a two-year period in order to be eligible to receive
state reimbursement. That measure was vetoed by Governor
Schwarzenegger because he did not feel that there was
"compelling evidence that would warrant the extensive reporting
requirements" in the bill.
AB 2837 (Firebaugh) of 2004 was similar to AB 51 and was also
vetoed by Governor Schwarzenegger.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO
State Building and Construction Trades Council of California,
AFL-CIO (sponsor)
Opposition
Associated Builders and Contractors of California
Western Electrical Contractors Association
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091