Bill Text: CA SB284 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Electricity: energization transparency and efficiency: wholesale distribution service.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-07-01 - July 1 set for first hearing canceled at the request of author. [SB284 Detail]

Download: California-2023-SB284-Amended.html

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Amended  IN  Assembly  June 20, 2023

Amended  IN  Assembly  June 08, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 284

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Introduced by Senator Wiener

February 01, 2023

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An act to add Section 9551 to the Civil Code, to amend Sections 1720 and 1722 of the Labor Code, and to add Section 768.7 to, to add Chapter 8.6 (commencing with Section 2849) to Part 2 of Division 1 of, and to add Part 7 (commencing with Section 3298) to Division 1 of, the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL'S DIGEST

SB 284, as amended, Wiener. Public utilities: contracting: interconnection transparency and efficiency: wholesale distribution service.

Existing law vests the Public Utilities Commission with regulatory jurisdiction over public utilities, including electrical and gas corporations.

This bill would require the commission to require each electrical corporation to make distribution data and distribution planning standards available to development project applicants, interconnecting entities, and public entities in a timely and efficient manner. The bill would require the commission to require each electrical corporation to develop and make publicly available information about its distribution system interconnection queue necessary for the interconnection of generation and electrical load. The bill would require each electrical corporation that has filed a wholesale distribution tariff with the Federal Energy Regulatory Commission to offer service under that tariff to the state, an agency, authority, or instrumentality of the state, or a political subdivision to transmit electricity that those public entities consume or sell directly to an ultimate customer, at the voltage requested by those public entities.

The Subletting and Subcontracting Fair Practices Act imposes various requirements on the state and any county, city, body politic, or public agency, and prime contractors and subcontractors, as defined, relating to the solicitation and acceptance of bids for construction on a public work or improvement. The act requires a bid to include specified information relating to the contractors to perform work under that bid, imposes limitations on the substitution, assignment, or sublet of subcontractors once a bid has been accepted, creates a process for addressing clerical errors in a submitted bid that requires, among other things, that the affected contractors submit affidavits under penalty of perjury, and imposes requirements on prime contractors and subcontractors relating to payment bonds. The Act act imposes various penalties for the violation of these provisions.

This bill would impose the above-described requirements on electrical corporations or gas corporations, defined as “investor-owned utilities,” prime contractors, and subcontractors relating to the solicitation and acceptance of bids for a project of an investor-owned utility when the expenditure for a project exceeds $10,000. $10,000, the project is undertaken in California, and the investor-owned utility intends to contract out the project. The bill would require an investor-owned utility to solicit bids in writing and award the work to the lowest responsible bidder or reject all bids. The bill would also require an investor-owned utility to specify various requirements relating to the payment of a prevailing wage, apprenticeship training, payment bonds, and a grievance process. By expanding the crime of perjury, the bill would impose a state-mandated local program.

This bill would require an investor-owned utility to require its contractors and subcontractors to use a skilled and trained workforce to perform work on projects for the production, generation, transmission, distribution, or storage of energy. The bill would require the commission to require investor-owned utilities to obtain certain reports from their contractors, bidders, or other entities and to transmit those reports to the commission.

This bill would prohibit an investor-owned utility from requiring a contractor to enter into, or not enter into, a collective bargaining agreement with any labor organization as a condition for bidding on any contracting work, entering into a contract with, or performing any contracting work for, the investor-owned utility, unless the agreement is a multicraft project labor agreement and certain requirements are met.

Existing law defines the term “public works” for the purposes of various requirements relating to wages, working hours, and workers’ compensation for work performed on a public works project. Existing law specifies that the construction, alteration, demolition, installation, or repair work on the electric transmission system located in California is a public works project. Existing law defines the term “awarding body” for this purpose to mean a department, board, authority, officer, or agent award awarding a contract for public work. Existing law requires that, except as specified, not less than the general prevailing rate of per diem wages, determined by the Director of Industrial Relations, be paid to workers employed on public works projects. Existing law makes a willful violation of laws relating to the payment of prevailing wages on public works a misdemeanor.

This bill would expand the definition of “awarding body” to include an investor-owned utility. The bill would expand the definition of “public works” by including the construction, alteration, demolition, installation, or repair work done in California under contract and paid for in whole or in part by an investor-owned utility. By expanding the scope of a crime, the bill would impose a state-mandated local program.

Existing law requires a direct contractor that is awarded a public works contract involving an expenditure in excess of $25,000 to, before commencement of work, give a payment bond to and approved by the officer or public entity by whom the contract was awarded.

This bill would specify that a “public entity” includes an investor-owned utility and that a project contracted by an investor-owned utility is a “public works contract” for purposes of this requirement.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain provisions of this bill would be part of the Public Utilities Act and a violation of a commission action implementing certain provisions of the bill would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 The Legislature finds and declares all of the following:

(a) The practices of bid shopping and bid peddling in connection with projects described in Part 7 (commencing with Section 3298) of Division 1 of the Public Utilities Code often result in poor quality of material and workmanship to the detriment of the ratepaying public, deprives the public of the full benefits of fair competition among prime contractors and subcontractors, and leads to insolvencies, loss of wages to employees, and other evils. Therefore, the same requirements for dealing with these problems on public works under the Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code) should be imposed on electrical and gas corporations.

(b) To ensure a fair and open bidding process, to eliminate favoritism, fraud, and corruption in the award of contracts, and to protect ratepayers from unnecessary costs costs, electrical and gas corporations should be required to award construction projects to the lowest responsible bidder.

(c) The requirements of competitive bidding imposed by this act will make it necessary to also impose the same protections for employees and the public as currently afforded on public works, specifically, to protect employees on projects from substandard wages that might be paid if contractors could recruit labor from distant cheap-labor areas, to permit union contractors to compete with nonunion contractors, to benefit the public through the superior efficiency of well-paid employees, to require electrical and gas corporations to participate in state-certified apprenticeship programs to secure a trained construction workforce to meet California’s infrastructure needs, and to compensate nonpublic employees with higher wages for the absence of job security and employment benefits enjoyed by public employees. The prevailing wage is a minimum wage that the Legislature finds should be extended to workers employed on certain projects of electrical and gas corporations that have been excluded from that protection.

(d) The deadly and costly fires that have ravaged the state in the last two years have highlighted the need for a skilled and trained workforce in the construction of utilities to minimize the risk of future disasters.

SEC. 2.

 Section 9551 is added to the Civil Code, to read:

9551.

 For purposes of this chapter, an investor-owned utility, as defined in Section 3298 of the Public Utilities Code, shall be considered a “public entity” and any construction project or work contracted by an investor-owned utility, covered by the provisions of Section 3298 of the Public Utilities Code, shall be considered a “public works contract.”

SEC. 3.

 Section 1720 of the Labor Code is amended to read:

1720.

 (a) As used in this chapter, “public works” means all of the following:

(1) Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by a public utility company pursuant to order of the Public Utilities Commission or other public authority. For purposes of this paragraph, “construction” includes work performed during the design, site assessment, feasibility study, and other preconstruction phases of construction, including, but not limited to, inspection and land surveying work, regardless of whether any further construction work is conducted, and work performed during the postconstruction phases of construction, including, but not limited to, all cleanup work at the jobsite. For purposes of this paragraph, “installation” includes, but is not limited to, the assembly and disassembly of freestanding and affixed modular office systems. For purposes of this paragraph, “public utility company” does not include an investor-owned utility, as defined in Section 3298 of Public Utilities Code.

(2) Work done for irrigation, utility, reclamation, and improvement districts, and other districts of this type. “Public works” does not include the operation of the irrigation or drainage system of an irrigation or reclamation district, except as used in Section 1778 relating to retaining wages.

(3) Street, sewer, or other improvement work done under the direction and supervision or by the authority of an officer or public body of the state, or of a political subdivision or district thereof, whether the political subdivision or district operates under a freeholder’s charter or not.

(4) The laying of carpet done under a building lease-maintenance contract and paid for out of public funds.

(5) The laying of carpet in a public building done under contract and paid for in whole or in part out of public funds.

(6) Public transportation demonstration projects authorized pursuant to Section 143 of the Streets and Highways Code.

(7) (A) Infrastructure project grants from the California Advanced Services Fund pursuant to Section 281 of the Public Utilities Code.

(B) For purposes of this paragraph, the Public Utilities Commission is not the awarding body or the body awarding the contract, as defined in Section 1722.

(8) Tree removal work done in the execution of a project under paragraph (1).

(9) Construction, alteration, demolition, installation, or repair work done in California under contract and paid for in whole or in part by an investor-owned utility, as defined in Section 3298 of the Public Utilities Code.

(b) For purposes of this section, “paid for in whole or in part out of public funds” means all of the following:

(1) The payment of money or the equivalent of money by the state or political subdivision directly to or on behalf of the public works contractor, subcontractor, or developer.

(2) Performance of construction work by the state or political subdivision in execution of the project.

(3) Transfer by the state or political subdivision of an asset of value for less than fair market price.

(4) Fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, that are paid, reduced, charged at less than fair market value, waived, or forgiven by the state or political subdivision.

(5) Money loaned by the state or political subdivision that is to be repaid on a contingent basis.

(6) Credits that are applied by the state or political subdivision against repayment obligations to the state or political subdivision.

(c) Notwithstanding subdivision (b), all of the following apply:

(1) Private residential projects built on private property are not subject to this chapter unless the projects are built pursuant to an agreement with a state agency, a redevelopment agency, a successor agency to a redevelopment agency when acting in that capacity, or a local public housing authority.

(2) If the state or a political subdivision requires a private developer to perform construction, alteration, demolition, installation, or repair work on a public work of improvement as a condition of regulatory approval of an otherwise private development project, and the state or political subdivision contributes no more money, or the equivalent of money, to the overall project than is required to perform this public improvement work, and the state or political subdivision maintains no proprietary interest in the overall project, then only the public improvement work shall thereby become subject to this chapter.

(3) (A) If the state or a political subdivision reimburses a private developer for costs that would normally be borne by the public, or provides directly or indirectly a public subsidy to a private development project that is de minimis in the context of the project, an otherwise private development project shall not thereby become subject to this chapter.

(B) (i) For purposes of subparagraph (A), a public subsidy is de minimis if it is both less than six hundred thousand dollars ($600,000) and less than 2 percent of the total project cost.

(ii) Notwithstanding clause (i), for purposes of subparagraph (A), a public subsidy for a project that consists entirely of single-family dwellings is de minimis if it is less than 2 percent of the total project cost.

(iii) This subparagraph shall not apply to a project that was advertised for bid, or a contract that was awarded, before July 1, 2021.

(4) The construction or rehabilitation of affordable housing units for low- or moderate-income persons pursuant to paragraph (5) or (7) of subdivision (e) of Section 33334.2 of the Health and Safety Code that are paid for solely with moneys from the Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the Health and Safety Code or that are paid for by a combination of private funds and funds available pursuant to Section 33334.2 or 33334.3 of the Health and Safety Code do not constitute a project that is paid for in whole or in part out of public funds.

(5) Unless otherwise required by a public funding program, the construction or rehabilitation of privately owned residential projects is not subject to this chapter if one or more of the following conditions are met:

(A) The project is a self-help housing project in which no fewer than 500 hours of construction work associated with the homes are to be performed by the home buyers.

(B) The project consists of rehabilitation or expansion work associated with a facility operated on a not-for-profit basis as temporary or transitional housing for homeless persons with a total project cost of less than twenty-five thousand dollars ($25,000).

(C) Assistance is provided to a household as either mortgage assistance, downpayment assistance, or for the rehabilitation of a single-family home.

(D) The project consists of new construction, expansion, or rehabilitation work associated with a facility developed by a nonprofit organization to be operated on a not-for-profit basis to provide emergency or transitional shelter and ancillary services and assistance to homeless adults and children. The nonprofit organization operating the project shall provide, at no profit, not less than 50 percent of the total project cost from nonpublic sources, excluding real property that is transferred or leased. Total project cost includes the value of donated labor, materials, and architectural and engineering services.

(E) The public participation in the project that would otherwise meet the criteria of subdivision (b) is public funding in the form of below-market interest rate loans for a project in which occupancy of at least 40 percent of the units is restricted for at least 20 years, by deed or regulatory agreement, to individuals or families earning no more than 80 percent of the area median income.

(d) Notwithstanding any provision of this section to the contrary, the following projects are not, solely by reason of this section, subject to this chapter:

(1) Qualified residential rental projects, as defined by Section 142(d) of the Internal Revenue Code, financed in whole or in part through the issuance of bonds that receive allocation of a portion of the state ceiling pursuant to Chapter 11.8 (commencing with Section 8869.80) of Division 1 of Title 2 of the Government Code on or before December 31, 2003.

(2) Single-family residential projects financed in whole or in part through the issuance of qualified mortgage revenue bonds or qualified veterans’ mortgage bonds, as defined by Section 143 of the Internal Revenue Code, or with mortgage credit certificates under a Qualified Mortgage Credit Certificate Program, as defined by Section 25 of the Internal Revenue Code, that receive allocation of a portion of the state ceiling pursuant to Chapter 11.8 (commencing with Section 8869.80) of Division 1 of Title 2 of the Government Code on or before December 31, 2003.

(3) Low-income housing projects that are allocated federal or state low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code, Chapter 3.6 (commencing with Section 50199.4) of Part 1 of Division 31 of the Health and Safety Code, or Section 12206, 17058, or 23610.5 of the Revenue and Taxation Code, on or before December 31, 2003.

(e)Notwithstanding paragraph (1) of subdivision (a), construction, alteration, demolition, installation, or repair work on the electric transmission system located in California or the construction, alteration, demolition, installation, or repair work that is subject to Part 7 (commencing with Section 3298) of Division 1 of the Public Utilities Code constitutes a public works project for the purposes of this chapter.

(f)

(e) If a statute, other than this section, or a regulation, other than a regulation adopted pursuant to this section, or an ordinance or a contract applies this chapter to a project, the exclusions set forth in subdivision (d) do not apply to that project.

(g)

(f) For purposes of this section, references to the Internal Revenue Code mean the Internal Revenue Code of 1986, as amended, and include the corresponding predecessor sections of the Internal Revenue Code of 1954, as amended.

(h)

(g) The amendments made to this section by either Chapter 938 of the Statutes of 2001 or the act adding this subdivision shall not be construed to preempt local ordinances requiring the payment of prevailing wages on housing projects.

SEC. 4.

 Section 1722 of the Labor Code is amended to read:

1722.

 “Awarding body” or “body awarding the contract” means department, board, authority, officer officer, or agent awarding a contract for public work, or an investor-owned utility, as defined in Section 3298 of the Public Utilities Code.

SEC. 5.

 Section 768.7 is added to the Public Utilities Code, to read:

768.7.

 (a) For purposes of this section, the following definitions apply:

(1) “Contractor” means a contractor as defined in Section 7026 of the Business and Professions Code, but does not include an investor-owned utility, or any other entity with 10 percent or more common ownership with the investor-owned utility.

(2) “Investor-owned utility” means either of the following entities:

(A) An electrical corporation.

(B) A gas corporation.

(3) “Project labor agreement” means a prehire collective bargaining agreement, as described in Section 158(f) of Title 29 of the United States Code, that establishes terms and conditions of employment for a specific construction project or projects.

(b) An investor-owned utility shall not require a contractor to enter into, or not enter into, a collective bargaining agreement with any labor organization as a condition for bidding on any contracting work, entering into a contract with, or performing any contracting work for, the investor-owned utility, unless the agreement is a multicraft project labor agreement that includes all construction crafts with applicable coverage determinations for the specified scopes of work on the project pursuant to Section 1773 of the Labor Code and meets the requirements of Section 2500 of the Public Contract Code, including includes all of the following ratepayer protection provisions:

(1) 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.

(2) 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.

(3) The agreement contains an agreed-upon protocol concerning drug testing for workers who will be employed on the project.

(4) The agreement contains guarantees against work stoppages, strikes, lockouts, and similar disruptions of the project.

(5) The agreement provides that disputes arising from the agreement shall be resolved by a neutral arbitrator.

(c) This section does not alter or affect the relationship between an investor-owned utility and its own employees.

SEC. 6.

 Chapter 8.6 (commencing with Section 2849) is added to Part 2 of Division 1 of the Public Utilities Code, to read:

CHAPTER  8.6. Interconnection and Distribution

Article  1. Interconnection Transparency and Efficiency

2849.

 For purposes of this article, the following definitions apply:

(a) “Interconnecting entity” means an entity seeking to connect electrical generation or load to the electrical transmission or distribution grid of an electrical corporation.

(b) “Interconnection” means the connection of electrical generation or load to the electrical transmission or distribution grid of an electrical corporation.

2849.2849.1.

 The commission shall require each electrical corporation to make distribution data and distribution planning standards available to development project applicants, interconnecting entities, and public entities in a timely and efficient manner.

2849.1.2849.2.

 The commission shall determine whether additional distribution system information beyond distribution data and distribution planning standards should be made available to increase transparency and efficiency in the interconnection process, promote least cost interconnections of generation and electrical load, and increase transparency and promote effective participation in the distribution planning process.

2849.2.2849.3.

 The commission shall require electrical corporations to develop and make publicly available uniform technical standards and requirements for interconnection of electrical load to the distribution system.

2849.3.2849.4.

 The commission shall require each electrical corporation to develop and make publicly available information about its distribution system interconnection queue necessary for the interconnection of generation and electrical load.

Article  2. Wholesale Distribution Service

2849.5.2849.10.

 (a) Each electrical corporation that has filed a wholesale distribution tariff with the Federal Energy Regulatory Commission shall offer service under that tariff to the State of California, an agency, authority, or instrumentality of the state, or a political subdivision to transmit electricity that those public entities consume or sell directly to an ultimate consumer, at the voltage level requested by those public entities. This obligation shall be in addition to any other requirement to offer service under that tariff that may exist under federal law.

(b) The commission shall adopt rules to implement subdivision (a).

SEC. 7.

 Part 7 (commencing with Section 3298) is added to Division 1 of the Public Utilities Code, to read:

PART 7. Contracting Practices of Electrical and Gas Corporations

3298.

 For purposes of this part, the following definitions apply:

(a) “Bid invitation” means any documents issued to prime contractors that contain descriptions of the work to be bid or the content, form, or manner of submission of bids by bidders.

(b) “Investor-owned utility” means either of the following entities that are not subject to the Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code):

(1) An electrical corporation, as defined in Section 218.

(2) A gas corporation, as defined in Section 222.

(c) “Material change” means a change with a substantial cost impact on the total bid as determined by the investor-owned utility.

(d) “Prime contractor” means the contractor who contracts directly with the investor-owned utility.

(e) (1) “Project of an investor-owned utility” or “project” means any construction, reconstruction, alteration, enlargement, renewal, demolition, installation, repair, or replacement of any structure, building, road, or other improvement of any kind, undertaken in California by an investor-owned utility.

(2) For purposes of paragraph (1), “construction” includes alteration, demolition, repair, installation, and work performed during the design, preconstruction, and postconstruction phases of construction, including, but not limited to, inspection, land surveying work work, and all cleanup work at the jobsite.

(3)  For purposes of paragraph (1), “installation” includes, but is not limited to, the assembly and disassembly of freestanding and affixed modular office systems.

(f) “Subcontractor” mean means a contractor, within the meaning of Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, that contracts directly with any prime contractor or subcontractor.

3298.1.

 This part applies if the expenditure required by a project of an investor-owned utility exceeds ten thousand dollars ($10,000). ($10,000) and the investor-owned utility intends to contract out the project.

3298.2.

 An investor-owned utility taking bids for a project of an investor-owned utility shall provide in the specifications prepared for the project or in the general conditions under which bids will be received for the doing of the work incident to the project of an investor-owned utility that any person making a bid or offer to perform the work shall, in that person’s bid or offer, set forth all of the following:

(a) (1) The name, location of the place of business, and contractor’s license number of each subcontractor that will perform work or labor or render service to the prime contractor in or about the construction of the project, or a subcontractor licensed by the Contractors State License Board that, under subcontract to the prime contractor, specially fabricates, whether onsite or offsite, and installs a portion of the project according to detailed drawings contained in the plans and specifications, in an amount in excess of one-half of 1 percent of the prime contractor’s total bid or ten thousand dollars ($10,000), whichever is greater.

(2) (A) Subject to subparagraph (B), information requested by the investor-owned utility concerning any subcontractor that the prime contractor is required to list under this subdivision, other than the subcontractor’s name, location of business, and contractor’s license number may be submitted by the prime contractor up to 24 hours after the deadline established by the investor-owned utility for receipt of bids by prime contractors.

(B) An investor-owned utility may implement subparagraph (A) at its option.

(b) The portion of the work that will be done by each subcontractor under its contract. The prime contractor shall list only one subcontractor for each portion as is defined by the prime contractor in the prime contractor’s bid.

3298.3.

 (a) An investor-owned utility taking bids for a project shall specify in the bid invitation and public notice the place the bids of the prime contractors are to be received and the time by which they shall be received, and that wages for work performed under the contract shall be paid at the prevailing rate pursuant to Section 3298.14. 3298.13. The date and time shall be extended by no less than 72 hours if the investor-owned utility issues any material changes, additions, or deletions to the invitation later than 72 hours before the bid closing. Any bids received after the time specified in the notice or any extension due to material changes shall be returned unopened.

(b) The investor-owned utility shall file the bid invitation and public notice with the commission.

3298.4.

 Circumvention by a general contractor that bids as a prime contractor of the requirement under Section 3298.3 for the general contractor to list its subcontractors, by the device of listing another contractor that will in turn sublet portions constituting the majority of the work covered by the prime contract, shall be considered a violation of this part and shall subject that general contractor to the penalties set forth in Section 3298.11, 3298.10, and disciplinary action authorized in Section 3298.12. 3298.11.

3298.5.

 If a prime contractor fails to specify a subcontractor or if a prime contractor specifies more than one subcontractor for the same portion of work to be performed under the contract in excess of one-half of 1 percent of the prime contractor’s total bid, the prime contractor agrees that it is fully qualified to perform that portion itself, and that the prime contractor shall perform that portion itself. Except as provided for in Section 3298.6 or 3298.10, 3298.9, if after the award of contract, the prime contractor subcontracts any portion of that work, the prime contractor shall be subject to the disciplinary action authorized in Section 3298.12. 3298.11.

3298.6.

 A prime contractor whose bid is accepted shall not do any of the following:

(a) (1) Substitute a person as subcontractor in place of the subcontractor listed in the original bid, except that the investor-owned utility, or its duly authorized officer, may, except as otherwise provided in Section 3298.8, 3298.7, consent to the substitution of another person as a subcontractor in any of the following situations:

(A) When the subcontractor listed in the bid, after having had a reasonable opportunity to do so, fails or refuses to execute a written contract for the scope of work specified in the subcontractor’s bid and at the price specified in the subcontractor’s bid, when that written contract, based upon the general terms, conditions, plans, and specifications for the project involved or the terms of that subcontractor’s written bid, is presented to the subcontractor by the prime contractor.

(B) When the listed subcontractor becomes insolvent or the subject of an order for relief in bankruptcy.

(C) When the listed subcontractor fails or refuses to perform its subcontract.

(D) When the listed subcontractor fails or refuses to meet the bond requirements of the prime contractor as set forth in Section 3298.9. 3298.8.

(E) When the prime contractor demonstrates to the investor-owned utility, or its duly authorized officer, subject to Section 3298.8. 3298.7, that the name of the subcontractor was listed as the result of an inadvertent clerical error.

(F) When the listed subcontractor is not licensed by the Contractors State License Board.

(G) When the investor-owned utility, or its duly authorized officer, determines that the work performed by the listed subcontractor is substantially unsatisfactory and not in substantial accordance with the plans and specifications, or that the subcontractor is substantially delaying or disrupting the progress of the work.

(H) When the listed subcontractor is ineligible to work on a public works project pursuant to Section 1777.1 or 1777.7 of the Labor Code, or Section 2603 of the Public Contract Code.

(I) When the investor-owned utility determines that a listed subcontractor is not a responsible contractor.

(2) Before approving the prime contractor’s request for the substitution, the investor-owned utility, or its duly authorized officer, shall give notice in writing to the listed subcontractor of the prime contractor’s request to substitute and the reasons for the request. The notice shall be served by certified or registered mail to the last known address of the subcontractor. The listed subcontractor that has been so notified has five working days within which to submit written objections to the substitution to the investor-owned utility. Failure to file these written objections constitutes the listed subcontractor’s consent to the substitution.

(3) If written objections are filed, the investor-owned utility shall give notice in writing of at least five working days to the listed subcontractor of a public hearing by the investor-owned utility on the prime contractor’s request for substitution.

(b) Permit a subcontract to be voluntarily assigned or transferred or allow it to be performed by anyone other than the original subcontractor listed in the original bid, without the consent of the investor-owned utility, or its duly authorized officer.

(c) Other than in the performance of “change orders” causing changes or deviations from the original contract, sublet or subcontract any portion of the work in excess of one-half of 1 percent of the prime contractor’s total bid as to which its original bid did not designate a subcontractor.

3298.7.

A subcontractor listed by a prime contractor under Section 3298.3 in the prime contractor’s bid as furnishing and installing carpeting shall not voluntarily sublet its subcontract with respect to any portion of the labor to be performed unless the subcontractor specified the subordinate subcontractor in the subcontractor’s bid for that subcontract to the prime contractor.

3298.8.3298.7.

 (a) The prime contractor, as a condition to asserting a claim of inadvertent clerical error in the listing of a subcontractor, shall, within two working days after the time of the prime bid opening by the investor-owned utility, give written notice to the investor-owned utility and copies of that notice to the subcontractor that is claimed to have been listed in error and the intended subcontractor that had bid to the prime contractor before the bid opening. The notice shall be served by email, facsimile, or other method so as to ensure delivery by the next business day.

(b) A listed subcontractor that has been notified by the prime contractor in accordance with this section as to an inadvertent clerical error shall be allowed six working days from the time of the prime bid opening within which to submit to the investor-owned utility and to the prime contractor written objection to the prime contractor’s claim of inadvertent clerical error. Failure of the listed subcontractor to file the written notice within the six working days shall be primary evidence of the subcontractor’s agreement that an inadvertent clerical error was made.

(c) The investor-owned utility shall, after a public hearing, as applicable, and in the absence of compelling reasons to the contrary, consent to the substitution of the intended subcontractor under the following conditions:

(1) If the prime contractor, the subcontractor listed in error, and the intended subcontractor each submit an affidavit to the investor-owned utility along with additional evidence as the parties may wish to submit that an inadvertent clerical error was in fact made, provided that the affidavits from each of the three parties are filed within eight working days from the time of the prime bid opening.

(2) If the affidavits are filed by both the prime contractor and the intended subcontractor within the specified time but the subcontractor that the prime contractor claims to have listed in error does not submit, within six working days, to the investor-owned utility and to the prime contractor, written objection to the prime contractor’s claim of inadvertent clerical error as provided in this section.

(3) If the affidavits are filed by both the prime contractor and the intended subcontractor, but the listed subcontractor has, within six working days from the time of the prime bid opening, submitted to the investor-owned utility and to the prime contractor written objection to the prime contractor’s claim of inadvertent clerical error, the investor-owned utility shall investigate the claims of the parties and shall hold a public hearing within 14 days of receipt of the affidavits as provided in this paragraph to determine the validity of those claims. The determination made shall be based on the facts contained in the declarations submitted under penalty of perjury by all three parties and supported by testimony under oath and subject to cross-examination. The investor-owned utility may, on its own motion or that of any other party, admit testimony of other contractors, any bid registries or depositories, or any other party in possession of facts that may have a bearing on the decision of the investor-owned utility.

3298.9.3298.8.

 (a) Each subcontractor submitting bids to a prime contractor to be prepared shall submit a faithful performance and payment bond or bonds if so requested by the prime contractor.

(b) If a subcontractor submitting a bid to a prime contractor does not, upon the request of the prime contractor and at the expense of the prime contractor at the established charge or premium therefor, furnish to the prime contractor a bond or bonds issued by an admitted surety in which the prime contractor is named the obligee, guaranteeing prompt and faithful performance of the subcontract and the payment of all claims for labor and materials furnished or used in and about the work to be done and performed under the subcontract, the prime contractor may reject the bid within seven days of the failure to furnish the required bonds and make a substitution of another subcontractor subject to Section 3298.8. 3298.7.

(c) (1) The bond or bonds may be required under this section only if the prime contractor in its written or published request for subbids clearly specifies the amount and requirements of the bond or bonds.

(2) If the expense of the bond or bonds required under this section is to be borne by the subcontractor, that requirement shall also be specified in the prime contractor’s written or published request for subbids.

(3) The prime contractor’s failure to specify bond requirements, in accordance with this subdivision, in the written or published request for subbids shall preclude the prime contractor from imposing bond requirements on the subcontractor under this section.

(4) Whether or not the prime contractor requires a bond, the prime contractor and the subcontractor shall be jointly and severally liable for all wages claims and judgments asserted against the subcontractor or any labor contracting company or staffing agency.

3298.10.3298.9.

 Subletting or subcontracting of any portion of the work in excess of one-half of 1 percent of the prime contractor’s total bid as to which no subcontractor was designated in the original bid shall only be permitted in cases of public emergency or necessity, and only after a finding reduced to writing as a public record of the investor-owned utility setting forth the facts constituting the emergency or necessity.

3298.11.3298.10.

 (a) A prime contractor violating this part violates its contract and the investor-owned utility may exercise the option, in its own discretion, of doing either of the following:

(1) Canceling the contract.

(2) Assessing the prime contractor a penalty in an amount of not more than 10 percent of the amount of the subcontract involved, and the penalty shall be deposited in the fund out of which the prime contract is awarded.

(b) In any proceedings under this section the prime contractor shall be entitled to a public hearing and to five days’ notice of the time and place of the public hearing.

3298.12.3298.11.

 A violation of this part by a licensee under Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code constitutes grounds for disciplinary action by the Contractors State License Board, in addition to the penalties prescribed in Section 3298.11. 3298.10.

3298.13.3298.12.

 The failure on the part of a contractor to comply with this part does not constitute a defense to the contractor in any action brought against the contractor by a subcontractor.

3298.14.3298.13.

 (a) For a project subject to this part, the investor-owned utility shall solicit bids in writing and shall award the work to the lowest responsible bidder or reject all bids.

(b) The investor-owned utility shall specify in the call for bids for the contract, in the bid specifications, and in the contract all of the following:

(1) That prevailing wages are required of all contractors and their subcontractors of every tier.

(2) That apprentices shall be employed and trained pursuant to Section 1777.5 of the Labor Code.

(3) That certified payroll records pursuant to Section 1776 of the Labor Code shall be submitted to the investor-owned utility.

(4) That the other provisions of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code shall apply to work on the project of the investor-owned utility.

(5) That a payment bond, with the terms described in Section 9554 of the Civil Code, shall be required of the prime contractor for any project.

(6) That the investor-owned utility has adopted a bid protest procedure that shall be available to any unsuccessful bidder.

(7) That the contractor, bidder, or other entity, and its contractors and subcontractors at every tier, shall comply with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.

(c) The payment bond described in paragraph (5) of subdivision (b) shall comply with the terms described in Section 9554 of the Civil Code. Chapter 5 (commencing with Section 9550) of Title 3 of Part 6 of Division 4 of the Civil Code applies to the payment bond required by this section.

(d) The bid protest procedure described in paragraph (6) of subdivision (b) shall, at a minimum, be available to any bidder, and any person, firm, association, trust, partnership, labor organization, corporation, or other legal entity that has, before the letting of the bids on the project in question, entered into a contract with the bidders that have submitted bids, to protest on the basis that the low bidder is not responsible or the bid is not responsive.

3298.15.3298.14.

 (a) For purposes of this section, the definitions contained in Section 2601 of the Public Contract Code apply.

(b) Commencing on or after January 1, 2024, the investor-owned utility shall require that its contractors and any subcontractors use a skilled and trained workforce to perform work on a project subject to this part for the production, generation, transmission, distribution, or storage of energy within an apprenticeable occupation in the building and construction trades, as specified in Section 2602 of the Public Contract Code, except as otherwise provided in this section.

(c) The commission shall require all investor-owned utilities to obtain from their contractors, bidders, or other entities the report described in paragraph (2) of subdivision (a) of Section 2602 of the Public Contract Code. Those reports shall be transmitted by the investor-owned utilities to the commission, shall be considered a public record under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and shall be open to public inspection.

(d) If the contractor, bidder, or other entity fails to provide the monthly report required by this section, or provides a report that is incomplete, the investor-owned utility shall withhold payments as the awarding body in accordance with subdivision (b) of Section 2602 of the Public Contract Code. If a monthly report does not demonstrate compliance with this section, the investor-owned utility shall withhold payments as the awarding body in accordance with subdivision (c) of Section 2602 of the Public Contract Code. The investor-owned utility shall resume payment as provided in subdivision (b) or (c) of Section 2602 of the Public Contract Code, as applicable. All actions withholding or resuming payment under this subdivision, including a plan to achieve substantial compliance as described in subparagraph (C) of paragraph (1) of subdivision (c) of Section 2602 of the Public Contract Code, shall be reported to the commission.

(e) (1) The commission may enter into an agreement with the Labor Commissioner to delegate to the Labor Commissioner the authority to receive the reports required pursuant to subdivision (c) or (d) (d).

(2) The Labor Commissioner may conduct the investigations and take the actions described in Section 2603 of the Public Contract Code, under the procedures described in Section 1777.1 of the Labor Code as to any project. A contractor or subcontractor debarred from bidding on or being awarded a contract for a public work under Section 2603 of the Public Contract Code and Section 1777.1 of the Labor Code shall be similarly debarred, for the same period of time and under the same conditions, from bidding on or being awarded a contract for a project. The Labor Commissioner shall provide the commission with a list of the debarred contractors and subcontractors, in the same form as specified in subdivision (k) of Section 2603 of the Public Contract Code, and the commission shall post the list on its internet website and make the list available to investor-owned utilities.

(3) If an investor-owned utility receives a monthly report that does not demonstrate compliance with the skilled and trained workforce requirements of this section, it shall forward a copy of the monthly report to the commission. The commission shall forward a copy of the monthly report to the Labor Commissioner for issuance of a civil wage and penalty assessment in accordance with this section. The commission may enter into an agreement with the Labor Commissioner for direct reporting and referral of the monthly reports to the Labor Commissioner.

(f) No exceptions or delays in compliance with this section shall be allowed by the commission, except upon a showing of both of the following:

(1) Diligent and good-faith efforts to comply.

(2) The exception or delay is necessary to prevent immediate harm to public health or safety or to the environment. Any exception or delay granted shall cease as soon as the emergency requiring it is over.

3298.16.3298.15.

 All notices, bids, subcontractor lists, or other written documents required to be submitted to an investor-owned utility under this part shall be promptly transmitted to the commission, and shall be considered a writing and subject to public disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).

3298.17.3298.16.

 An investor-owned utility shall not enter into any agreement in contravention of this part.

3298.18.3298.17.

 This part does not limit or diminish any rights or remedies, either legal or equitable, of either of the following:

(a) That an original or substituted subcontractor may have against the prime contractor, or the prime contractor’s successors or assigns.

(b) That the investor-owned utility may have against the prime contractor, or the prime contractor’s successors or assigns, including the right to take over and complete the contract.

SEC. 8.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 8.SEC. 9.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.