BILL ANALYSIS �
AB 1598
Page 1
ASSEMBLY THIRD READING
AB 1598 (Buchanan)
As Introduced February 6, 2012
Majority vote
LABOR & EMPLOYMENT 5-1 APPROPRIATIONS 12-5
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|Ayes:|Swanson, Alejo, Allen, |Ayes:|Fuentes, Blumenfield, |
| |Furutani, Yamada | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
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|Nays:|Morrell |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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SUMMARY : Defines "installation" (for purposes of the law
applicable to the payment of prevailing wages on public works
projects) to include the assembly and disassembly of
freestanding and affixed modular office systems.
EXISTING LAW :
1)Requires the prevailing wage rate to be paid to all workers on
"public works" projects over $1,000.
2)Defines "public work" to include, among other things,
construction, alteration, demolition, installation or repair
work done under contract and paid for in whole or in part out
of public funds.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill will result in potential increased staff
costs to the Department of Industrial Relations (DIR), likely
less than $125,000, due to increased workload regarding
AB 1598
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enforcement. However, increased fine revenue may offset any
increased staff costs.
COMMENTS : According to the author, this bill seeks to clarify
the meaning of "installation" within the state public works law
to include the assembly and disassembly of freestanding and
affixed modular office systems. There have been many
administrative decisions over the years concerning the assembly
of modular office systems and whether such work constitutes a
public work under state prevailing wage law. For example, prior
to the passage of SB 975 (Alarc�n), Chapter 938, Statutes of
2001, several DIR public works determinations held that the
assembly of such systems only constituted a "public work" if the
system was bolted, secured or mounted to the realty (walls
and/or floors). See, for example Valley View Elementary School,
PW 99-034 (September 1999), and Metal Workers and Metal Storage
Shelving, PW 99-060 (November 1999).
The sponsor of the current legislation (the Northern California
Carpenters Regional Council) argues that SB 975 added the term
"installation," in part, to clarify that such work would be
covered by prevailing wage law.
However, even after the passage of SB 975, DIR continued to
apply the affixed/freestanding dichotomy in determining whether
such work was covered by prevailing wage law. For example, in
Western Contract Services, PW 2005-017 (December 2005), DIR
found that the mere assembly and/or disassembly of freestanding
modular furniture was not subject to prevailing wage
requirements. That case distinguished an earlier coverage
determination as involving modular furniture that was bolted
down, secured or mounted to the realty.
In a subsequent decision, DIR stated that the determination of
whether such work was included as a public work was not affected
by SB 975's codification of "installation." Modular Furniture,
County of Sacramento, PW 2008-035 (November 2009). In that
decision, DIR stated that, "The relevant distinction between the
pre-SB 975 and post-SB 975 versions of the Labor Code are
immaterial. Whether the work is installation rising to the
level of construction under the pre-SB 975 version or
'installation' under the post-SB 975 version produces the same
result. The pre-SB 975 and the post-SB 975 coverage
determinations have in common the bolting, securing or mounting
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of items to the realty as fixtures."
The Northern California Carpenters Regional Council argues that
this bill is necessary because DIR's continued insistence in
recent years on the affixed/freestanding dichotomy means that
the intent of SB 975's addition of the term "installation" has
not been completely effectuated.
The California State Conference of Carpenters writes that a
"tortured interpretation of the existing statute under the
previous administration resulted in a reversal of this well
established practice. This simple statutory clarification will
bring a necessary measure of certainty to the public works
contracting process that reflects legislative and regulatory
intent as well as standard industry practice."
Writing in opposition to this bill, the Associated Builders and
Contractors of California (ABC California) argues that it
"proposes to expand state prevailing wage mandates to the set up
and take down of office cubicles. ABC California believes �this
bill] continues the unwarranted expansion of state mandated
construction wage rates to projects that are not, in reality,
construction. It is important to note that modular systems set
up and take down is something that is normally obtained by
purchase contract with office furniture equipment suppliers, not
under a public works construction contract."
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0003278