BILL ANALYSIS �
SB 829
Page 1
Date of Hearing: March 13, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
SB 829 (Rubio) - As Amended: February 23, 2012
SENATE VOTE : (vote not relevant)
SUBJECT : Public contracts: public entities: project labor
agreements.
SUMMARY : Prohibits the use of state funds for any charter city
public works projects if the charter city has banned the
consideration of the use of project labor agreements (PLAs).
Specifically, this bill:
1)Provides that, if a charter provision, initiative, or
ordinance of a charter city prohibits the governing board's
consideration of a PLA that includes current-law taxpayer
protection provisions for some or all of the projects to be
awarded by the city, then state funding or financial
assistance shall not be used to support any projects awarded
by the city.
2)Provides that the above provision shall not be applicable
until January 1, 2015, for charter cities in which a charter
provision, initiative, or ordinance in effect prior to
November 1, 2011, would disqualify a project from receiving
state funding or financial assistance.
EXISTING LAW
1)Establishes the State Contract Act for the purpose of
governing contract practices between state agencies and
private contractors.
2)Defines public works contracts as any construction,
alteration, demolition, installation or repair work done under
contract and paid for in whole or in part from public funds.
3)Establishes the Local Agency Public Construction Act, which
sets forth the procedures local agencies are required to use
when soliciting and evaluating bids or proposals for the
construction of a public work or improvement.
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4)Authorizes public entities to use, enter into, or require
contractors to enter into a PLA for a construction project
only if the agreement includes all of the following taxpayer
protection provisions:
a) The agreement prohibits discrimination based on race,
national origin, religion, sex, sexual orientation,
political affiliation, or membership in a labor
organization in hiring and dispatching workers for the
project;
b) The agreement permits all qualified contractors and
subcontractors to bid for and be awarded work on the
project without regard to whether they are otherwise
parties to collective bargaining agreements;
c) The agreement contains an agreed-upon protocol
concerning drug testing for workers who will be employed on
the project;
d) The agreement contains guarantees against work
stoppages, strikes, lockouts, and similar disruptions of
the project; and,
e) The agreement provides that disputes arising from the
agreement shall be resolved by a neutral arbitrator.
5)Provides that the members of the governing board of a local
public entity may choose by majority vote whether to use,
enter into, or require contractors to enter into a PLA that
includes the provisions specified above and whether to
allocate funding to a project covered by such an agreement.
Provides that a charter provision, initiative, or ordinance
shall not prevent the governing board of a local public
entity, other than a charter city, from exercising this
authority on a project-specific basis.
6)Provides that, if a charter provision, initiative, or
ordinance of a charter city prohibits the governing board's
consideration of a PLA that includes the provisions described
above or from allocating funds to a city-funded project
covered by such an agreement, state funding or financial
assistance shall not be used to support that project. This
provision is not applicable until January 1, 2015, for charter
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cities in which a charter provision, initiative, or ordinance
in effect prior to November 1, 2011, would disqualify a
project from receiving state funding or financial assistance.
7)Provides the following definitions:
a) "PLA" means a prehire collective bargaining agreement
that establishes terms and conditions of employment for a
specific construction project or projects and is an
agreement described in the United States Code governing
unfair labor practices and allowable labor agreements in
the building and construction industry; and,
b) "Public Entity" means a state, county, city, city and
county, district, public authority, public agency,
municipal corporation, or any other political subdivision
or public corporation in the state.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "This bill is
necessary because anti-union groups/associations continue their
campaign to eliminate the option for local governments to
utilize PLAs...These are mainly political attacks because PLAs
are negotiated on a project-by-project or funding source (i.e.,
bond) basis and PLAs are not mandated under any state laws.
Anti-PLA/union lobbyists, mainly the Associated Builders and
Contractors, pushed bans in a few counties (Stanislaus, Orange,
San Diego) and Charter Cities (Chula Vista and Oceanside) based
on intense lobbying and campaigns waged by non-union contractor
organizations that voluntarily choose not to bid on projects
governed by a PLA.
"SB 922, which the California Legislature passed and the
Governor signed, effectively eliminated the PLA bans imposed by
general law cities, counties and special districts. SB 922 also
authorized all public entities to utilize a PLA if they meet the
criteria of Public Code Section 2500. SB 922 provided, in
Public Contract Code Section 2502, that charter cities that have
ordinances that prevent the city council from considering the
use of a PLA for a project cannot receive state funding for that
specific project. SB 829 would extend the law by providing that
charter cities that have ordinances that prevent the city
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council from considering the use of PLAs cannot receive state
funding for any of their construction projects."
Background . A PLA is a pre-hire agreement that establishes the
terms and conditions of employment for a specific construction
project. They are completed before any workers are hired to
determine the wage rates and benefits of all employees working
on the project and to agree to prevent any strikes, lockouts, or
other work stoppages for the length of the project. The terms
of the agreement apply to all contractors and subcontractors who
successfully bid on the project, union or non-union, and
supersede any existing collective bargaining agreements.
PLAs are used on both public and private projects, and their
specific provisions are tailored by the contracting parties to
meet the needs of a particular project. By governing and
establishing work rules, pay rates, and dispute resolution
processes for every worker on the project, PLAs can maximize
project stability, efficiency and productivity. PLAs can also
help minimize the risks and inconvenience to the public that can
accompany public work projects, helping ensure that projects are
completed on time and on or under budget.
According to a 2001 California Research Bureau report, "PLAs are
arguably the most important change in labor management relations
in the construction industry in recent years. They have become
a fairly common part of the organization of major construction
projects in California?Construction of Shasta Dam, which ran
from 1938 to 1944, was the first project involving a PLA in
California. It was a remarkable success, at least in the sense
that the project was completed without a labor strike, at a time
when other projects in the western states were plagued with
strikes and other labor disturbances. Other notable PLA
projects in California include the Bay Area Rapid Transit
(BART), San Francisco's Yerba Buena Project, Los Angeles' Blue
Line, the Los Angeles Convention Center, the San Joaquin Hills
Corridor toll road, the Eastside Reservoir Project (the
reservoir now known as Diamond Valley), the National Ignition
Facility at Lawrence Livermore Labs, San Francisco International
Airport's newest terminals, construction for several large
school districts, and others.
"Perhaps surprisingly, private construction projects in
California are much more likely to use PLAs than are public
projects?nearly three-quarters (of the projects reviewed for the
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report) were private sector agreements. In addition, 22 out of
23 private cogeneration electricity plants recently built or
under construction in California used PLAs.
"The legality of PLAs has been extensively tested in both
federal and state courts, and with respect to both private and
public construction projects. Their validity has been upheld in
both federal and state cases?
"PLAs involve some controversy, which fits within a 200 year-old
tradition of dispute about the role of trade unions in America.
In this case, the dispute comes especially from non-union
contractors, who object to PLA requirements that they get their
labor force from a union hiring hall and who argue that PLAs
increase construction costs. Construction firms and owners who
use PLAs judge that the cost savings from avoidance of labor
disputes and strikes during a construction project outweigh any
costs of complying with the PLA. They also value a PLA's role
in resolving disputes between the many kinds of unions involved
in a complex project over which union members should be doing
particular tasks. Dispute also occurs between construction
firms that use and value PLAs and those that do not."
On February 6, 2009, U.S. President Barack Obama issued an
Executive Order requiring the use of PLAs on Federal projects of
$25 million or more. According to the order, PLAs promote
efficient and timely completion of large-scale construction
projects and prevent many of the problems inherent in such
construction.
PLAs are not mandated under California law. However, if a state
or local agency chooses to use a PLA for a public construction
project, the PLA must include minimum taxpayer-protection
criteria. Governing boards of local agencies can choose by
majority vote whether or not to use a PLA that includes these
taxpayer-protection criteria. Governing boards of local
agencies can also decide by majority vote whether or not to fund
a project that includes such a PLA. Because of the home-rule
provision of the California Constitution, this provision does
not apply to charter cities.
Local agencies, except charter cities, are also prohibited from
adopting blanket prohibitions against using PLAs. Local
governing boards have the authority to decide on a case-by-case
basis whether to use PLAs.
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If a charter city has banned PLAs for a project to be awarded by
the city, state financial assistance must not be used for that
project. This provision becomes operable January 1, 2015, for
charter cities that had ordinances in effect before November 1,
2011, that would disqualify a project from receiving state
funding.
This bill further provides that, if a charter city has an
ordinance that prevents the city's governing body from
considering the use of PLAs, state funding cannot be used to
support any projects awarded by the city. This provision also
has a delayed effective date of January 1, 2015, for charter
cities that had such bans in place before November 1, 2011.
Charter Cities . The California Constitution gives cities the
power to become charter cities. A charter city has the power to
regulate "municipal affairs," while a general law city is
subject to the general laws passed by the Legislature. General
law cities are creatures of the Legislature and have only the
powers that the Legislature, through the general laws of the
state, gives them. Charter cities, on the other hand, are
separate creatures under state law. The charter adopted by a
city actually constitutes state law, with the force of
legislative enactment.
City charter and city charter amendment proposals can originate
in three ways: a charter commission; the governing body of the
city; or, by a petition of the voters. For a charter
commission, the proposed charter must be submitted to the voters
within specified time frames. A governing body, on its own
motion, can propose, amend or repeal a charter and submit the
proposal to the voters within specified time frames. Petitions
from voters are submitted to the city council for placement on
the ballot at an election on a date to be determined by the city
council. These provisions also apply to general law cities.
Related legislation.
AB 1804 (Valadao) of 2012 repeals current law governing the use
of PLAs in public contracting and the prohibition against using
state funds for projects in charter cities that have banned
PLAs. This bill is pending in Assembly Business, Professions
and Consumer Protection Committee.
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Previous legislation.
AB 1254 (Davis) of 2011 requires the High-Speed Rail Authority,
in awarding contracts for the construction of the high-speed
rail system, to require that a minimum of 25% of the aggregate
dollar amount of contracts awarded be subject to PLAs, as
defined. This bill was held in Assembly Transportation
Committee.
SB 922 (Steinberg), Chapter 431, Statutes of 2011, establishes
parameters for the use of PLAs in public contracting, and
prohibits state funding or financial assistance from supporting
specified non-PLA projects.
REGISTERED SUPPORT / OPPOSITION :
Support
State Building and Construction Trades Council of California,
AFL-CIO (sponsor)
Air Conditioning and Refrigeration Contractors Association
Air Conditioning and Sheet Metal Association
Associated Plumbing and Mechanical Contractors of Sacramento
Bay Area Chapter of the Sheet Metal and Air Conditioning
Contractors National Association
Bragg Crane and Rigging Co.
Brice Mechanical, Inc.
California BlueGreen Alliance
California Chapters of the National Electrical Contractors
Association
California Labor Federation
California Landscape and Irrigation Council
California League of Conservation Voters
California Legislative Conference of the Plumbing, Heating and
Piping Industry
California Professional Firefighters
California Sheet Metal and Air Conditioning Contractors'
National Association
California State Pipe Trades Council
California Teamsters Public Affairs Council
Cement Masons Local 300
Center for Sustainable Neighborhoods
Contra Costa Building and Construction Trades Council
Councilmember Xavier E. Campos, City of San Jose
Fresno, Madera, Kings and Tulare Counties Building and
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Construction Trades Council
Imperial County Building and Construction Trades Council
International Association of Heat and Frost Insulators Local 5
International Brotherhood of Boilermakers Local 92
International Brotherhood of Electrical Workers Local 11
International Brotherhood of Electrical Workers Local 40
International Brotherhood of Electrical Workers Local 180
International Brotherhood of Electrical Workers Local 234
International Brotherhood of Electrical Workers Local 413
International Brotherhood of Electrical Workers Local 440
International Brotherhood of Electrical Workers Local 441
International Brotherhood of Electrical Workers Local 551
International Brotherhood of Electrical Workers Local 569
International Brotherhood of Electrical Workers Local 595
International Brotherhood of Electrical Workers Local 617
International Brotherhood of Electrical Workers Local 639
International Brotherhood of Electrical Workers Local 952
International Brotherhood of Electrical Workers Ninth District
International Union of Elevator Constructors Local 18
Iron Workers Local 155
Iron Workers Local 229
Iron Workers Local 416
Iron Workers Local 433
Jerry Thompson and Sons Painting, Inc.
KBI Painting, Inc.
L&H Airco
Los Angeles Unified School District
Los Angeles/Orange Counties Building and Construction Trades
Council
Mayor Antonio R. Villaraigosa, City of Los Angeles
Metalclad Insulation Corporation
Mid Valley Building and Construction Trades Council
Napa-Solano Counties Building and Construction Trades Council
Northeastern California Building and Construction Trades Council
Northern California Glass Management Association
Northern California Painting and Finishing Contractors
Association
Painters and Allied Trades District Council 16-Local 741
Painters and Allied Trades District Council 36
Painters and Allied Trades Local 272
Painters and Allied Trades Local 3
Painters, Tapers, Floorcoverers and Glaziers District Council 16
Local 294
Plumbers and Pipefitters Local 447
Plumbers, Steamfitters and Refrigeration Fitters Local 467
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Road Sprinkler Fitters Local 669
Sacramento-Sierra's Building and Construction Trades Council
San Bernardino and Riverside Counties Building and Construction
Trades Council
San Diego and Imperial Counties Labor Council
San Diego County Building and Construction Trades Council
San Joaquin, Calaveras, Amador and Alpine Counties Building and
Construction Trades Council
San Mateo County Building and Construction Trades Council
Santa Clara and San Benito Counties Building and Construction
Trades Council
Sheet Metal Workers' Local Union No. 104
Sonoma, Mendocino and Lake Counties Building and Construction
Trades Council
Southern California Pipe Trades District Council 16
Sprinkler Fitters U.A. Local 709
United Association of Plumbers and Steamfitters Local 230
United Association of Plumbers and Steamfitters Local 355
United Association of Plumbers and Steamfitters Local 398
United Association of Plumbers and Steamfitters Local 582
United Union of Roofers, Waterproofers, and Allied Workers Local
36
United Union of Roofers, Waterproofers, and Allied Workers Local
81
United Union of Roofers, Waterproofers, and Allied Workers Local
220
Ventura County Plumbers and Pipe Fitters Local 484
Western States Council Sheet Metal Workers' International
Association
Numerous individuals
Opposition
Associated Builders and Contractors of California
League of California Cities
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301