BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2272
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                 AB 2272 (Gray) - As Introduced:  February 21, 2014 

          Policy Committee:                              LaborVote:5-1

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              Yes

           SUMMARY  

          This bill specifies that "public work" for purposes of  
          prevailing wage law includes projects funded by the California  
          Advanced Services Fund (CASF).

           FISCAL EFFECT  

          The Department of Industrial Relations (DIR) estimates costs of  
          approximately $280,000 to Division of Labor Standards  
          Enforcement for increased enforcement and investigations.

           COMMENTS  
           
          1)Purpose.  This bill, sponsored by the California-Nevada  
            Conference of Operating Engineers, codifies a recent DIR  
            determination that public works funded in whole or in part by  
            the CASF are subject to California's prevailing wage  
            requirements.  According to the author, this change in law  
            provides clarity to contractors who are bidding on CASF-funded  
            projects and to labor standards officers who are responsible  
            for enforcing labor laws on the project.  

           2)Background  .  CASF, administered by the Public Utilities  
            Commission, provides grants to telephone corporations to  
            provide broadband access and build out facilities in unserved  
            and underserved areas in the state.  

          This bill is in response to a petition to DIR challenging  
          prevailing wage requirements. The Central Valley Next Generation  
          Broadband Infrastructure Project (CVNGBIP) is a 1,371 mile  
          fiber-optic infrastructure project through 18 counties. The  
          $66.6 million project is funded through federal, state and local  








                                                                  AB 2272
                                                                  Page  2

          funds.  CVNGBIP petitioned DIR challenging the prevailing wage  
          requirements because state funds constitute only 10% of the  
          project's total budget.  In November 2013, DIR issued a letter  
          making the determination that because CVNGBIP is partially  
          funded with state funds, it is a "public work" subject to  
          California's prevailing wage requirements.

          Since this determination, DIR has issued one penalty assessment  
          related to the CVNGBIP.  The construction firm that received the  
          penalty filed for a review of the assessment in February 2014.    



           Analysis Prepared by  :    Misty Feusahrens / APPR. / (916)  
          319-2081