BILL ANALYSIS �
AB 436
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 436 (Solorio) - As Amended: February 28, 2011
Policy Committee: Labor and
Employment Vote: 5-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill specifies that certain work related to renewable
energy generation is considered "public works" for purposes of
the prevailing wage law. Specifically, this bill:
Defines "public works" as the construction, demolition,
installation, and repair work done under private contract when
both of the following conditions are met:
1)The work is performed in connection with the construction or
maintenance of renewable energy generation capacity, located
on property wholly or partially owned by a school district or
community college district, as specified.
2)The work is performed in connection with a long-term
arrangement (at least five years) for the purchase of
partially or fully exported power by or for the benefit of the
school district or community college district.
FISCAL EFFECT
1)Unknown, potential increased GF/98 costs, likely in the
hundreds of thousands to low millions, to school and community
college districts to purchase energy, to the extent that
requiring a prevailing wage to be paid on these projects
increases the cost of energy. There are 1,021 school
districts and 72 community college districts.
2)Costs, likely less than $75,000, to the Department of
Industrial Relations, to enforce this change in prevailing
wage statute.
AB 436
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COMMENTS
1)Rationale . Existing law requires the prevailing wage rate to
be paid to workers on "public works" projects over $1,000.
Statute defines "public works" as construction, alteration,
demolition, installation, or repair work done under contract
and paid for in whole or in part out of public funds, except
work done directly by any public utility company, as
specified.
According to the author, "The current definition of public
work projects is too narrow, which consequently denies many
contractors the right to a fair wage. In California,
construction workers who are hired on to complete public work
projects at sites performed in connection with the
construction or maintenance of renewable energy generation
capacity are not currently protected under prevailing wage
stipulations. Prevailing wage law is meant to protect workers
in a time of rapidly growing unemployment and government
involvement in the economy. Without these provisions
contractors bidding for state contracts could undercut
prevailing wages in any given area by 20% to 30% and
ultimately hurt vulnerable workers and their families."
2)Previous legislation . AB 677 (Solorio), similar to this
measure, was vetoed by Governor Schwarzenegger in September
2010 with the following message:
"Defining projects for renewable energy generating facilities
serving school and community college districts as public works
when the only public funds are those spent to purchase power
produced is an unwarranted expansion of prevailing wage
requirements into private works of improvement. Because the
payment of prevailing wages results in higher costs, the bill
may potentially reduce the number of renewable energy projects
undertaken."
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081
AB 436
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