BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 829 HEARING: 4/18/12
AUTHOR: Rubio FISCAL: Yes
VERSION: 4/9/12 TAX LEVY: No
CONSULTANT: Weinberger
PROJECT LABOR AGREEMENTS
Bans state funding for city construction projects in a
charter city which prohibits or restricts its city
council's ability to adopt, require, or utilize a project
labor agreement.
Background and Existing Law
A project labor agreement (PLA) is an agreement that a
construction project's managers and its workers complete
before a project starts. PLAs establish the wage rates and
benefits of all employees working on the project and
prevent strikes, lockouts, or other work stoppages during
the project. The terms of the agreement apply to all
contractors and subcontractors, union or non-union, who
successfully bid on the project, and supersede any existing
collective bargaining agreements.
Generally, the Local Agency Public Construction Act
requires local officials to invite bids for construction
projects and then award contracts to the lowest responsible
bidder. Some critics of PLAs want to ban their use for
public construction projects, arguing that PLA requirements
are inconsistent with the principle of awarding public
contracts to the lowest bidder. In recent years,
voter-approved initiatives have banned PLAs in San Diego
County and in the Cities of Chula Vista and Oceanside.
Ordinances adopted by the Fresno City Council, and Boards
of Supervisors in Orange County, Placer County, and
Stanislaus County have banned PLAs. At the June 5, 2012
primary election, voters in the City of San Diego will vote
on a ballot measure that would ban PLAs.
In response to local bans on PLAs, the Legislature passed
SB 922 (Steinberg, 2011). SB 922 authorized a local public
entity's governing board to choose by majority vote whether
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to use, enter into, or require contractors to enter into a
PLA that includes required taxpayer protection provisions
for a specific project or projects awarded by that entity.
Local governments' governing boards can choose whether to
allocate funding to a specific project covered by such a
PLA. SB 922 prohibited any charter provision, initiative,
or ordinance that prevents the local public entity's
governing board from exercising this authority on a
project-specific basis, except in charter cities. When SB
922 took effect on January 1, 2012, it eliminated counties'
existing PLA bans. PLAs remain banned in three charter
cities.
SB 922 also included provisions that apply only to charter
cities. The California Constitution lets charter cities
control their municipal affairs. The 120 charter cities
must follow statewide laws only for issues of statewide
concern when the Legislature has fully occupied the field.
If a charter provision, initiative, or ordinance prohibits
a charter city's city council from considering a PLA for a
city-awarded project or allocating funds to a city-funded
project covered by a PLA, last year's Steinberg bill
prohibits state funding or financial assistance from being
used to support that project. For a charter city with a
charter provision, initiative, or ordinance in effect
before November 1, 2011, that would disqualify a project
from receiving state funding, the state funding prohibition
does not apply until January 1, 2015.
Labor union officials want the Legislature to expand the
state funding prohibition to apply to all city construction
projects in charter cities in which there are restrictions
on the city council's consideration of PLAs.
Proposed Law
Senate Bill 829 prohibits state funding or financial
assistance from being used to support any construction
projects awarded by a charter city in which a charter
provision, initiative, or ordinance prohibits, limits, or
constrains the governing board's authority or discretion to
adopt, require, or utilize a project labor agreement that
includes specified taxpayer protection provisions for some
or all of the construction projects awarded by the city.
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SB 829 is not 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 construction project from receiving state
funding or financial assistance.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Project labor agreements are
valuable tools for creating local jobs, encouraging open
and fair competition, and ensuring the efficient use of
public funds. PLAs promote the efficient and timely
completion of construction projects by establishing common
work rules, schedules, and dispute resolution processes for
every worker on a project before construction starts and by
barring strikes, lockouts, and other disruptions. Because
PLAs are project-specific agreements that are crafted to
meet each community's particular needs, it makes sense to
consider their use on a case-by-case basis. Comprehensive
local bans on PLAs deny local officials the discretion to
use PLAs, even when those officials conclude that an
agreement would benefit taxpayers. Two recent federal
district court decisions in Idaho and Michigan raise the
possibility that bans on PLAs may violate the federal
National Labor Relations Act. Last year, by passing SB
922, the Legislature ensured that most local officials will
have the option to use a PLA for a particular project if
they want to. However, because cities' contracting
processes are generally considered to be a municipal
affair, state law can't directly eliminate charter cities'
PLA bans. Instead, last year's Steinberg bill prohibited
state funding for specified charter city construction
projects if the bans remain in effect after December 31,
2014. By broadening the state funding sanctions to apply
to all charter city construction projects in cities where
bans remain in place after December 31, 2014, SB 829
strengthens last year's effort to establish PLAs as an
option that can be used by every local government.
2. Local control . Local voters elect county supervisors,
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city council members, and special district board members to
make public policy in response to local needs. Decisions
about how local governments contract for public
construction projects are best made by local officials and
the voters who elect them. A local ordinance banning PLAs
can be amended or repealed by the local governing board
that adopted the ordinance. Voter-approved local
initiatives can prohibit local officials from using PLAs.
Why should state legislators use state funding as leverage
to prevent local voters from determining the rules that
apply to their local governments' construction contracts?
In particular, the committee may wish to consider whether,
by imposing an immediate state funding ban in cities that
adopt PLA restrictions after November 1, 2011, SB 829 is
intended to influence voters' consideration of the proposed
City of San Diego PLA ban, which will be on the ballot in
June.
3. Related bill . AB 1804 (Valadao) would repeal the
statutes enacted by SB 922 (Steinberg, 2011). At the
Assembly Local Government Committee's April 11, 2012
hearing, SB 1804 failed to pass out of the committee on a
3-3 vote.
4. Gut-and-amend . When the Senate passed SB 829 on June
9, 2011, the bill was authored by Senator DeSaulnier and
contained provisions relating to citations issued by the
Department of Industrial Relations and Occupational Safety
and Health Appeals Board's appeals process. The February
23, 2012 Assembly amendments deleted that language, made
Senator Rubio the author, and converted the bill into a
measure prohibiting state funding for public works in
charter cities that ban PLAs. Because this topic was never
heard in the Senate, the Senate Rules Committee referred
the amended bill under Senate Rule 29.10 to the Senate
Governance and Finance Committee for a hearing on the
Assembly's amendments. At its April 18 hearing, the
Committee has four choices:
Send the bill back to the Senate Floor,
recommending concurrence.
Send the bill back to the Senate Floor,
recommending nonconcurrence.
Send the bill back to the Senate Floor, without
recommendation.
Hold the bill.
SB 829 -- 4/9/12 -- Page 5
Assembly Actions
Assembly Business, Professions, and Consumer Protection
Committee: 6-2
Assembly Appropriations Committee: 11-4
Assembly Floor:
50-23
Support and Opposition (4/16/11)
Support : State Building and Construction Trades Council of
California, AFL-CIO; 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; Fresno,
Madera, Kings and Tulare Counties Building and 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
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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; Los Angeles Mayor Antonio R.
Villaraigosa; 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 Carpenters Regional 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; 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 Jose City Councilmember Xavier E. Campos; 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.
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Opposition : Associated Builders and Contractors of
California; California Chamber of Commerce; City of
Ventura; League of California Cities; San Diego Mayor Jerry
Sanders.