Amended  IN  Senate  March 27, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 830

Introduced by Senator Smallwood-Cuevas
(Coauthor: Senator Cortese)

February 17, 2023

An act to amend Section 3073.1 Sections 1720 and 1771 of the Labor Code, relating to employment. public works.


LEGISLATIVE COUNSEL'S DIGEST


SB 830, as amended, Smallwood-Cuevas. Apprenticeship and preapprenticeship: deregistration. Public works.
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 defines the term “public works” for purposes of requirements regarding the payment of prevailing wages to include construction, alteration, demolition, installation, or repair work done under contract and paid for using public funds, except as specified. 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 “public works” to include an offsite, custom fabrication of sheet metal ducts or similar sheet metal products for heating, ventilation, and air conditioning systems produced as a nonstandard item solely and specifically designed and engineered for installation in a project, as specified. By expanding the scope of a crime, the 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.

Existing law establishes within the Department of Industrial Relations the Division of Apprenticeship Standards to administer and enforce laws relating to apprenticeships. Existing law requires the division to evaluate apprenticeship and preapprenticeship programs to ensure, among other things, the program evaluated is complying with apprenticeship standards. Existing law authorizes the division to initiate a deregistration process to withdraw state approval of a program in specified circumstances and prescribes procedures for deregistration proceedings.

This bill would require the division to post quarterly on its internet website a list of programs that are deregistered.

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

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


SECTION 1.

 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.
(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) Offsite, custom fabrication of sheet metal ducts or similar sheet metal products for heating, ventilation, and air conditioning systems produced as a nonstandard item solely and specifically designed and engineered for installation in a project under paragraph (1).
(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 constitutes a public works project for the purposes of this chapter.
(f) 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) 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) 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. 2.

 Section 1771 of the Labor Code is amended to read:

1771.
 Except for public works projects of one thousand dollars ($1,000) or less, not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed, project is located, and not less than the general prevailing rate of per diem wages for holiday and overtime work fixed as provided in this chapter, shall be paid to all workers employed on public works.
This section is applicable only to work performed under contract, and is not applicable to work carried out by a public agency with its own forces. This section is applicable to contracts let for maintenance work.

SEC. 3.

 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.
SECTION 1.Section 3073.1 of the Labor Code is amended to read:
3073.1.

(a)The division shall evaluate apprenticeship and preapprenticeship programs to ensure that the program evaluated is complying with its standards, that all on-the-job training is supervised by journeypersons, that all classroom instruction required by the apprenticeship or preapprenticeship standards is being provided, that all work processes in the standards are being covered, that graduates have completed the program’s requirements, and that any funds received under this chapter were properly obtained and are being expended appropriately. The division shall examine each apprenticeship program to determine whether apprentices are graduating from or completing the program on schedule or dropping out and to determine whether graduates of the apprenticeship program have obtained employment as journeypersons. During the evaluation, the division shall attempt to contact a statistically valid sample of apprentices who have dropped out of the program prior to completion to determine their reasons for leaving the program. Every program sponsor shall have a duty to cooperate with the division in conducting an evaluation.

(b)Evaluation reports for building and construction trade and firefighting programs shall be presented to the California Apprenticeship Council and reports concerning any other program shall be presented to the Interagency Advisory Committee on Apprenticeship. The division shall make reports public, except that the division shall not make public information that would infringe on the privacy of individuals. The division shall recommend remedial action to correct deficiencies recognized in the audit report, and the failure to follow division recommendations or to correct deficiencies within a reasonable period of time shall be grounds for withdrawing state approval of a program. In any case in which a program has willfully violated any of the laws, regulations, or orders governing apprenticeship programs, funding provided to apprenticeship programs and associated entities, applicants for apprenticeship, or apprentices registered under this chapter, the division may initiate the deregistration process to withdraw state approval of the program. Nothing shall prevent the division from conducting evaluations of programs where deficiencies have been identified or where it receives information that a program is not being operated in accordance with applicable federal and state laws and regulations or the program’s approved program standards. If a program is found to be using funds provided under this chapter for purposes other than those for which the funds were granted or is found to have obtained the funds improperly, then the program shall not be eligible to receive any future funding from the same funding program and the division may initiate the deregistration process to withdraw state approval of the program.

(c)(1)The division may suspend registrations of new apprentice agreements by providing written notice of the reasons for the suspension. The division shall provide such notice at least 10 days before the suspension is effective and shall serve the notice on the program by electronic mail, or by mail if the program does not have an electronic mail address on file.

(2)If the division does not initiate deregistration proceedings within 45 days of the effective date of the suspension, the suspension is lifted.

(3)If deregistration proceedings are pending when the notice of suspension is served, or the division initiates deregistration proceedings within 45 days of the effective date of the suspension, the suspension will remain in effect until one of the following occurs:

(A)A decision on the deregistration is final.

(B)The division provides written notice that it has dismissed deregistration proceedings.

(C)The division lifts the suspension, upon a showing of good cause.

(4)A program affected by a suspension under this section may appeal to the Administrator of Apprenticeship within 10 days of the effective date of the suspension. If the administrator does not act within 30 days of the appeal, the appeal is deemed denied.

(5)The division shall post quarterly on its internet website a list of programs that are deregistered.

(d)The division shall give priority in conducting evaluations to programs that have been identified as having deficiencies. The division may conduct simplified evaluations for programs with fewer than five registered participants.

(e)One year following the creation of a new program or substantial expansion of an existing program, the division shall evaluate the program for quality and conformity with the requirements of this section.

(f)If the division finds evidence that information provided to it by a apprenticeship program has been purposefully misstated, including information provided to obtain funding under this chapter, the division shall immediately investigate and determine whether an evaluation of the program or deregistration is necessary. After such investigation, the division may initiate the deregistration process to withdraw state approval of the program. The division shall report its investigatory findings for building and construction trade and firefighting programs to the California Apprenticeship Council and shall report its investigatory findings for all other programs to the Interagency Advisory Committee on Apprenticeship. The division shall make the investigatory findings available to the public, except that the division shall not make public information that would infringe upon the privacy of individuals.

(g)If the division determines that an apprenticeship program has been the subject of two or more meritorious complaints that concern the recruitment, training, or education of apprentices within a five-year period, the division shall schedule the program for an evaluation within three months of the determination.

(h)If the division determines that an apprenticeship program that has had at least two graduating classes has an annual apprentice completion rate below 50 percent of the average completion rate for the applicable occupation, the division shall schedule the program for an evaluation within three months of the determination.