BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Senator Ben Hueso, Chair
Date of Hearing: June 25, 2014 2013-2014 Regular
Session
Consultant: Deanna D. Ping Fiscal:Yes
Urgency: No
Bill No: AB 1870
Author: Alejo
As Introduced: February 19, 2014
SUBJECT
Public works: prevailing wage: multiemployer apprenticeship
grants.
KEY ISSUE
Should the legislature approve a change in the distribution of
training contributions by the California Apprenticeship Council
to divide training grants, in the case of when there are two or
more multiemployer apprenticeship programs in the same craft and
geographic area, among all approved multiemployer apprenticeship
programs in California based off the number of apprentices?
ANALYSIS
Existing law requires a contractor to whom a contract is awarded
who employs apprentices or journeymen in any apprenticeable
craft or trade to contribute to the California Apprenticeship
Council (CAC) the same amount that the director determines is
the prevailing amount of the apprenticeship training
contributions in the area of the public works site. (Labor Code
�1777.5)
Existing law requires the CAC to distribute training
contributions received, less the expenses of the Department of
Industrial Relations for administration, by making grants to
approved apprenticeship programs for the purpose of training
apprentices as follows:
1)If there is an approved multiemployer apprenticeship program
serving the same craft or trade and geographic area for which
the training contributions were made to the CAC, a grant to
that program shall be made.
2)If there are two or more approved multiemployer apprenticeship
programs serving the same craft or trade and geographic area
for which the training contributions were made to the CAC, the
grant shall be divided among "those programs" based on the
number of apprentices registered in each program.
3)All training contributions not distributed as above shall be
used to defray the future expenses of the Department of
Industrial Relations for the administration and enforcement of
apprenticeship standards and requirements under existing law.
(Labor Code �1777.5)
This bill provides that if there are two or more approved
multiemployer apprenticeship programs serving the same craft or
trade and geographic area for which the training contributions
were made to CAC, the grant shall be divided among "all the
approved multiemployer apprenticeship programs serving the same
craft or trade in California" based on the number of apprentices
registered in each program.
COMMENTS
1. Need for this bill?
According to the author's office, the existing formula used to
distribute apprenticeship training funds allows apprenticeship
programs operating statewide or throughout multiple counties
to receive a disproportionate amount of funding from the
Division of Apprenticeship Standards (DAS) in comparison to
higher performing programs that operate countywide.
Specifically, the author's office points to the example that
under current law an apprenticeship program that has 200
enrollees covering 10 counties would receive the same amount
of training funds as 10 separate apprenticeship programs that
each train 200 individuals operating in 10 different counties.
According to the author, AB 1870 would institute an equitable
formula to disburse apprenticeship-training funds so that
programs operating within one county would get a disbursement
Hearing Date: June 25, 2014 AB 1870
Consultant: Deanna D. Ping Page 2
Senate Committee on Labor and Industrial Relations
that reflects the fact they are training more apprentices than
programs operating on a multicounty level with significantly
fewer apprentices.
2. Proponent Arguments :
According to proponents, AB 1870 would establish a fair
distribution formula so that all programs would get their
appropriate disbursement amount instead of the current formula
which disproportionately provides more funding to programs
with fewer apprentices. Proponents argue that the problem with
the current distribution formula is that an overwhelming
portion of the funds expended annually are going to statewide
apprenticeship programs that repeatedly graduate far less
apprentices than the regional and local Joint Apprenticeship
Training Committee programs. Proponents bring attention to the
following statistics: in 2012, for electrical workers
apprenticeship programs, JATC's graduated 712 wiremen/sound
and communication installers or more than 80% of all statewide
graduates for this craft. Yet, proponents bring attention to
the fact that statewide programs received nearly 75% of the
funding and the JATC's received less than 30%. Proponents
contend that AB 1870 will ensure that the funds generated get
back to the programs that are producing the workers and will
institute an equitable formula to disburse
apprenticeship-training funds.
3. Opponent Arguments :
Opponents argue that AB 1870 changes the long-standing method
by which the state allocates apprenticeship training grants
without increasing the level of state funding for the
training. Opponents argue that the current system, in which
contractor contributions are sent to programs that are
authorized by the state to indenture apprentices in the county
from which the contributions originated, logically supports
apprentices in the same county in which the work is being
performed. Opponents contend that AB 1870 radically shifts
journey worker contributions from one program to another -
which could cause some programs to lose about 2/3rds of their
allocations. Opponents maintain that AB 1870 will take
contributions and send them to programs statewide, thus
Hearing Date: June 25, 2014 AB 1870
Consultant: Deanna D. Ping Page 3
Senate Committee on Labor and Industrial Relations
allocating contributions from individual counties in which
work is being performed and sending them to programs in 57
other counties. Opponents argue that while programs in San
Francisco, Los Angeles, and San Diego may realize a very
modest benefit, those programs actually serving small rural
counties could see their grants reduced substantially.
Opponents maintain that it is preferable to increase funding
for every eligible program.
SUPPORT
State Building and Construction Trades Council of California
(Co-Sponsor)
California Labor Federation, AFL-CIO
California State Pipe Trades Council
The California State Association of Electrical Workers
Western States Council of Sheet Metal Workers
OPPOSITION
Air Conditioning Trade Association (ACTA)
Associated Builders and Contractors of California
Associated Builders and contractors of San Diego
Plumbing-Heating-Cooling Contractors Association of California
(CAPHCC)
The California Fire Training Alliance
Western Burglar and Fire Alarm Association Unilateral
Apprenticeship & Training Committee
Western Electrical Contractors Association (WECA)
Hearing Date: June 25, 2014 AB 1870
Consultant: Deanna D. Ping Page 4
Senate Committee on Labor and Industrial Relations