BILL ANALYSIS �
AB 2272
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CONCURRENCE IN SENATE AMENDMENTS
AB 2272 (Gray)
As Amended August 22, 2014
Majority vote
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|ASSEMBLY: |56-17|(May 27, 2014) |SENATE: |23-11|(August 26, |
| | | | | |2014) |
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Original Committee Reference: L. & E.
SUMMARY : Specifies that "public work" for purposes of
prevailing wage law also means infrastructure project grants
from the California Advanced Services Fund (CASF) pursuant to
existing law.
The Senate amendments :
1)Specify that the bill applies to "infrastructure project
grants" from the CASF, rather than "projects funded" by the
CASF.
2)Clarify that, for purposes of this requirement, the Public
Utilities Commission is not the awarding body or the body
awarding the contract as defined in existing law under the
Labor Code.
3)Add language to avoid a chaptering out conflict with AB 26
(Bonilla) of the current legislative session.
AS PASSED BY THE ASSEMBLY , this bill specified that "public
work" for purposes of prevailing wage law also means projects
funded by the CASF.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill will result in annual costs of
approximately $280,000 to the Department of Industrial Relations
for increased enforcement costs. The bill would also result in
one-time costs of $75,000 to determine any necessary changes to
existing CASF infrastructure grants. Finally, the bill would
result in unknown cost pressures, likely in the tens of millions
of dollars, to the CASF as a result of increased projects costs
for existing and future projects.
AB 2272
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COMMENTS : The CASF program was established to encourage
deployment of high-quality advanced communications services to
all Californians that will promote economic growth, job
creation, and the substantial social benefits of advanced
information and communications technologies. Existing law
establishes the goal of the program as, by no later than
December 31, 2015, to approve funding for infrastructure
projects that will provide broadband access to no less than 98%
of California households.
The Central Valley Next Generation Broadband Infrastructure
Project is a 1,371 mile fiber-optic infrastructure project
through 18 counties that will reportedly serve a population of 4
million people when completed. The goal of the project is to
provide direct fiber connectivity to 63 anchor institutions,
access by another 40 anchor sites, and access to hundreds of
thousands of other businesses and residences. The $66.6 million
project is funded through federal, state and local funds, with
about 10% of its total funding coming from the CASF discussed
above.
On November 22, 2013, Department of Industrial Relations (DIR)
Director Christine Baker issued a determination letter which
found that the project, because it is partially funded with
state funds, is a public work subject to California's prevailing
wage requirements.
This bill is sponsored by the California-Nevada Conference of
Operating Engineers, who argues that this simply codifies the
recent DIR determination in statute to avoid confusion and legal
questions in the future. They believe this will give clarity to
contractors who are bidding on CASF-funded projects, and to
labor standards officers who are responsible for enforcing labor
laws on the projects.
Opponents argue that the DIR determination has been appealed by
the interested parties and codifying that decision would be
premature. Additionally, they argue that CASF projects are not
state construction contracts awarded by the California Public
Utilities Commission, but rather grant recipients, and
therefore, clearly fall outside the definition of "public
works." Overall, opponents argue that the Legislature should
not codify the DIR's erroneous determination both in light of
the pending legal arguments and because this bill would
undermine a critical state public policy goal in promoting
broadband deployment.
AB 2272
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Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN:
0005353