November 8, 2019INDEPENDENT ROOFING CONTRACTORS OF CALIFORNIA, INC. LLLL WWW.IRCC.
By Richard Markuson Government Affairs Analyst, CEO Pacific Advocacy Group
Governor Newsom Shows He Dosen't Like to Say "No" As He Thumbs Up 1,000 New Bills for January 2020 Effective Date
IT BEGINS:
AB 48 (O’Donnell and Glazer) will be Proposition 13 on the March 2020 ballot. It is a $15 billion general obligation bond for the construction and modernization of public preschool, K-12, California Community Colleges (CCC), University of California (UC), and California State University (CSU) facilities. It requires only a majority vote to pass. AB 48 was approved on votes of 78-1 in the Assembly and 35-4-1 in the Senate. The no-vote: es were all Republican: Assemblymember Obernolte, and Senators Jones, Moorlach, Morrell, and Jeff Stone. Senator Dahle was absent or abstained.
The bill—called the Public Preschool, K-12, and College Health and Safety Bond Act of 2020—allocates funds as follows:
$9 billion for Preschool to Grade 12 school facilities as follows:
$2.8 billion for new construction;
$5.2 billion for modernization;
$500 million for charter schools; and,
$500 million for career technical education.
$2 billion for the UC and the Hastings College of the Law;
$2 billion for the CSU; and,
$2 billion for community college facilities.
It grants developers several financial concessions:
Waives developer fees, until January 1, 2026, for multifamily housing within a ½ mile of a major transit stop to increase access to housing.
Provides a 20 percent reduction of developer fees to multifamily housing projects in other areas until January 1, 2026.
Suspends Level 3 developer fees—which doubles the developer fees paid when state bond funds are exhausted—from January 1, 2021, or whenever existing bond funds are expended, to January 1, 2028.
According to the Legislature, a 2020 primary general obligation bond amount of $15 billion would result in total principal and interest costs of $27.4 billion ($15 billion in principal and $12.4 billion in interest), with annual General Fund costs of about $900 million, assuming an interest rate of 4.5 percent and a 30-year maturity period.
Under existing law, allocation of state funds is earmarked by the State Allocation Board for the construction and modernization of public K-12 school facilities. AB 48 requires schools to submit to the Office of Public School Construction (OPSC) a five-year school facilities master plan or an updated five-year school facilities master plan, approved by the governing board of the school district to be eligible for State bond funds (typically matching from 50 to 65 percent).
OPSC must prioritize quarterly the processing of applications as follows:
First, for health and safety projects.
Second, for school districts requesting financial hardship assistance.
Third, for projects addressing lead remediation.
Fourth, for projects that were submitted, but not processed, in the preceding two quarters.
Fifth, for projects addressing severe overcrowding.
Sixth, based on a district’s gross bonding capacity and the percentage of students that are low-income, English learners, or foster youth.
“the department shall further prioritize projects that include the use of a project labor agreement.”None of the analyses mentioned a provision that requires “within each of the priorities identified” above,
This was included at the behest of the State Building and Construction Trades Council to “balance” the developer concessions described above. (This was confirmed by participants in the bond negotiations).
This language will result in at least five potential outcomes:
It will be an additional inducement for school districts to adopt a PLA;
It will further reduce opportunities for merit-shop contractors and their apprentices to work on school construction projects;
It will raise costs for school construction;
It will become the standard language in any future state GO bond or lease revenue bond; and,
It may eventually become standard language in any future state appropriation (like we have observed in the expansion of Skilled and Trained Workforce mandates).
TWO BOND MEASURES:
California voters passed the last two school bond measures by similar margins – Prop 51 in 2016 (55.2 to 44.8 percent of the vote) and Prop 1D in 2006 (with 56.9 to 43.1 percent of the vote). 54 percent of likely voters say they would support the measure, according to polling from the nonpartisan Public Policy Institute of California. Some have suggested that measures that poll this low can have trouble if there is a concerted “NO” campaign.
At least four elements of a successful “no” campaign have been identified:
Develop a strong ballot argument in opposition to AB 48. Arguments are due by November 5;
Secure one or more “Name” opponents. Former or current school officials, taxpayer groups, and advocates for underrepresented groups were at the top of the list;
Secure editorial board opposition that can be incorporated in media campaigns; and,
Pursue a targeted social media campaign –to the extent funding is available– to counter what will surely be a well-funded “Yes” campaign.
The Howard Jarvis Taxpayers Association, the California Taxpayers Action Network (the only opponent to Prop 51 in 2016), and Eye on Sacramento are potential signers of the opposition argument; and we learned recently that Senator Jones and Assemblymember Obernolte are considering submitting an argument. Under state law, their argument is given priority.
In 2016, supporters of Prop 51 spent $12,319,208, opponents spent $0.00. See sources of support below. Some of that $12 million was spent to qualify the measure for the ballot – unlike Prop 13, the Legislature – because of opposition of Jerry Brown, did not place Prop 51 on the ballot.
You can read the opposition and supporting ballot arguments for Prop 51 here.
Two Legislators resigned. State Senator Jeff Stone (R District: 28- La Quinta) resigned to accept an appointment by President Trump to be the Western States Director for the United States Department of Labor. Palm Springs City Councilwoman Lisa Middleton — the first transgender person to be elected to a non-judicial post in California — is considering running. Middleton was appointed earlier this year by Gov. Gavin Newsom to the CalPERS board of administrators. Senate Republican Leader Shannon Grove (R-Bakersfield) joined Stone in endorsing Temecula councilmember Matt Rahn (R).
More widely publicized is the resignation of Representative Katie Hill (D-Santa Clarita). Hill defeated Steve Knight in 2018 and Knight has hinted he may enter the race. Already declared and securing endorsements is Assemblywoman Christy Smith (D District: 38- Santa Clarita) who defeated Republican Dante Acosta in 2018 by 4,000 votes (2%). Several Democrats who were rumored to be considering a run have dropped out – perhaps to give Smith a shot at winning outright.
Governor Newsom will call for a special election set sometime early in 2020. If Smith wins the congressional seat it would trigger a subsequent election to fill the remainder of her term in the Assembly.
Contractors State License Board: Governor Newsom made several appointments to the Contractors State License Board (CSLB). I sent congratulatory notes of introductions to each of the appointees introducing myself and my contractor association clients.
Diana Pryor Love, of Palmdale is the new senior citizen organization appointee. Love was a children and youth group facilitator at Parents Anonymous Inc. from 2015 to 2017, a field representative in the Office of Assemblymember Steve Fox from 2013 to 2015, a work and community volunteer for the Los Angeles County Sheriff’s Department, Palmdale Station from 2008 to 2013, a product demonstrator at 5 Star Demonstration Services from 2008 to 2009, a customer service representative and mystery shopper at Safeway Inc. from 2007 to 2008, a loan counselor at Countrywide Home Loans from 2003 to 2007 and an elder and child care consultant at Work Life Benefits Resource and Referral from 1996 to 2003. She is a member and immediate past president of the Los Angeles County Commission for Older Adults, an ambassador for the City of Palmdale, treasurer of the Inland Communities Democratic Headquarters Political Action Committee and national district liaison for the AARP. Love is a member of the California Senior Legislature, Mental Health of America Advisory Council – Antelope Valley/Lancaster, City of Palmdale Mobile Home Review Board, Friends of the Palmdale City Library and Forget Us Not Community Services. This position requires Senate confirmation. Love is a Democrat.
Mary Teichert, of Granite Bay is the new “A”. Teichert has been chief operating officer at Teichert Inc. since 2013, where she has held several positions since 2004, including vice president and general manager, estimator, project engineer and miner. She was director of product strategy at Apple Computer from 2002 to 2004 and a consultant at Bain and Company from 1998 to 2001. Teichert earned a Master of Business Administration degree from Harvard Business School. She is a member of the Associated General Contractors of America, the Beavers, California Transportation Foundation, American Leadership Forum, Capital Region Family Business Center, United Contractors and California Building Industry Association. This position requires Senate confirmation. Teichert is a Democrat.
James Ruane, of San Bruno is a new “C” appointee. Ruane has been president of Patrick J. Ruane Inc. since 1976. He served as mayor of San Bruno from 2009 to 2017. He is a member of the Wall and Ceiling Alliance and the Association of the Wall and Ceiling Industry. This position requires Senate confirmation and the compensation is $100 per diem. Ruane is a Democrat.
CSLB Composition: There are currently two vacancies on the Board to be appointed by the Governor: one “C” contractor member, and a “B” member.
ESS. In a surprising about face, the CSLB appears poised to “identify and retain an outside consultant or expert to study energy storage system (ESS) information received and ESS installation issues including safety concerns and appropriate contractor classifications to install ESS.” At a prior meeting staff was directed to return with proposed language for the Legislative Committee to consider for a rulemaking.
State Legislation: PLAs
AB 1290 (Gloria D) Water projects: financial assistance and construction financing: Pure Water San Diego Program. Requires the use of PLAs as a condition of receiving construction financing under the Safe Drinking Water State Revolving Fund Law or financial assistance from the State Water Pollution Control Revolving Fund for work performed for any portion of the Pure Water San Diego Program. Chapter 755, Statutes of 2019.
APM/DB/CMaR AB 356 (Santiago D) Los Angeles Community College District: best value procurement: pilot program. Authorizes the Los Angeles Community College District to utilize a best value procurement process as a pilot project until January 1, 2025, for construction projects over $1 million dollars. The bill contains provisions that allow a contractor under a project labor agreement to be presumed to meet the requirements of using a skilled and trained workforce. Chapter 173, Statutes of 2019.
AB 695 (Medina D) Community college facilities: design-build contracts. Extends the sunset on community college districts’ authority to enter into design-build public works contracts and adopts the same "skilled and trained workforce" requirements applicable to the design-build authority of state agencies and local governments. The bill contains provisions that allow a contractor under a project labor agreement to be presumed to meet the requirements of using a skilled and trained workforce. Chapter 492, Statutes of 2019.
Apprenticeship
SB 247 (Dodd D) Wildland fire prevention: vegetation management. Requires the State to create a list for each electrical corporation identifying all trees and other vegetation requiring removal or trimming in the vicinity of electrical lines or equipment owned by the electrical corporation, including the extent of trimming required. All electrical line clearance tree trimmers performing work to comply with the trim list shall be qualified line clearance tree trimmers or trainees under the direct supervision and instruction of qualified line clearance tree trimmers as provided in the Department of Industrial Relations’ High-Voltage Electrical Safety Orders (Group 2 (commencing with Section 2700) of Subchapter 5 of Chapter 4 of Division 1 of Title 8 of the California Code of Regulations). Requires all qualified line clearance tree trimmers shall be paid no less than the prevailing wage rate for a first-period apprentice electrical utility lineman as determined by the Director of Industrial Relations. Chapter 406, Statutes of 2019.
AB 729 (Chu D) Carpet recycling: carpet stewardship. Existing law authorized the creation of a state-approved apprenticeship program for training apprentice and journey-level carpet installers in proper carpet recycling practices. There is are three 48-month Carpet, Linoleum & Resilient Floor Layer programs in San Diego, Santa Fe Springs, and San Leandro - all run by JATCs. This bill makes numerous changes to the existing requirements for recycling carpet. Chapter 680, Statutes of 2019.
AB 729 (Chu D) Carpet recycling: carpet stewardship. Existing law authorized the creation of a state-approved apprenticeship program for training apprentice and journey-level carpet installers in proper carpet recycling practices. There is are three 48-month Carpet, Linoleum & Resilient Floor Layer programs in San Diego, Santa Fe Springs, and San Leandro - all run by JATCs. This bill makes numerous changes to the existing requirements for recycling carpet. Chapter 680, Statutes of 2019.
AB 1558 (Ramos D) Apprenticeship programs: career fairs. Requires local school districts or schools planning college or career fairs to notify apprenticeship programs in their county utilizing contact information from the database of approved apprenticeship programs published by the Division of Apprenticeship Standards on its internet website. Vetoed.
"To the Members of the California State Assembly: I am returning Assembly Bill 1558 without my signature. This bill requires local school districts or schools that are planning college or career fairs to notify each apprenticeship program in their county, utilizing information from the database of approved apprenticeship programs published by the Division of Apprenticeship Standards. Many schools and school districts already include apprenticeship programs as part of their career fair outreach. While the intentions of this bill are commendable, this bill is could result in additional costs to schools, which are already under significant financial stress. Sincerely, Gavin Newsom
Business Issues
AB 456 (Chiu D) Public contracts: claim resolution. Extends the sunset date from January 1, 2020 to January 1, 2027 of a claim resolution process that enables contractors to seek public agency review of claims that arise during public works projects Chapter 489, Statutes of 2019. CEQA
AB 1191 (Bonta D) State Lands Commission: exchange of trust lands: City of Oakland: Howard Terminal property: Oakland Waterfront Sports and Mixed-Use Project, Waterfront Access, Environmental Justice, and Revitalization Act. Allows the State Lands Commission to enter into an exchange with the City of Oakland of certain public trust lands, for the future site of the Oakland Athletics Ballpark project. Chapter 752, Statutes of 2019. Construction Practices
AB 754 (Grayson D) Regional notification centers: GIS data: excavations. Allows the California Department of Technology to provide GIS data to a regional notification center and requires applications for solar energy system permits to contain a reference to the existing requirement to notify a regional notification center of intended excavation Chapter 494, Statutes of 2019.
AB 1166 (Levine D) Public works: protection of underground infrastructure: regional notification center system: electronic positive response. This bill would require every operator to supply an electronic positive response through the regional notification center before the legal excavation start date and time Chapter 453, Statutes of 2019. CTE
SB 716 (Mitchell D) Juveniles: delinquency: postsecondary academic and career technical education. This bill requires each county probation department as well as the California Department of Corrections and Rehabilitation, and the Department of Juvenile Justice (DJJ) to ensure that youths with a high school diploma or California high school equivalency certificate who are detained in, or committed to, their respective facilities, have access to various public postsecondary academic and career technical courses and programs. Chapter 857, Statutes of 2019.
ESS AB 1144 (Friedman D) Self-generation incentive program: community energy storage systems: high fire threat districts. This bill requires the California Public Utilities Commission (CPUC) to support resiliency during a deenergization event for communities in high fire threat districts by allocating at least ten percent ($16.6 million) of the annual allocation of the self-generation incentive program (SGIP) in 2020 for the installation of energy storage and other distributed energy resources for customers that operate a critical facility or critical infrastructure in these communities. Chapter 394, Statutes of 2019.
Housing AB 1485 (Wicks D) Housing development: streamlining. This bill allows a project to be subject to streamlined ministerial review, as specified, if the project contains 10 or more units and it dedicates 20% of the total number of units to housing affordable to households making below 120% of the area median income with the average income of the units at or below 100% of the area median income. Chapter 663, Statutes of 2019.
Labor Law AB 9 (Reyes D) Employment discrimination: limitation of actions. A coalition of employer organizations, including the California Chamber of Commerce, is opposed unless amended. The coalition requests an amendment regarding the nature of the claims covered and seeks clarity that the bill only applies to prospective claims. They state, “while AB 9 is being promoted as an anti-sexual harassment bill, it actually has a broad, sweeping effect on all employment harassment, discrimination and retaliation complaints. The Fair Employment and Housing Act (FEHA) makes specified employment and housing practices unlawful, including discrimination against or harassment of employees and tenants. Additionally, Title VII of the Civil Rights Act of 1964 makes specific employment practices unlawful under federal law.” Chapter 709, Statutes of 2019.
AB 403 (Kalra D) Division of Labor Standards Enforcement: complaint. AB 403 incentivizes litigation and provides for a one-sided provision of attorney’s fees. California is already widely perceived as having a hostile litigation environment. One factor that contributes to this negative perception is the high award and threat of attorney’s fees in civil litigation that often dwarfs the financial recovery the plaintiff actually receives. Vetoed
To the Members of the California State Assembly: I am returning Assembly Bill 403 without my signature. This bill would extend the period to file a whistleblower retaliation complaint with the Labor Commissioner from six months to within two years after the retaliation has occurred. This bill would also authorize a court to award reasonable attorney's fees to a plaintiff who brings a successful anti-retaliation action. I commend the Legislature's recent work to enact strong anti-retaliation measures, including providing the Labor Commissioner's Office with authority to investigate retaliation when workers are too fearful to file a formal complaint, as well as the power to issue an administrative citation to enforce anti-retaliation statutes. The Legislature has recognized that swift enforcement action by the Labor Commissioner is one of the most effective tools to combat retaliation and mitigate against its chilling effect on the rights of workers. I urge the Legislature to consider an approach that is consistent with other anti-retaliation statute of limitations in the Labor Code which are set to one year. Sincerely, Gavin Newsom
AB 673 (Carrillo D) Failure to pay wages: penalties. Provides that penalties for late payment of wages shall be recovered by the Labor Commissioner (LC) as civil penalties, payable to the affected employee, or by the employee as statutory penalties in a hearing pursuant to the LC's authority under the Labor Code. The affected employee may also enforce civil penalties for late payment of wages through the Private Attorneys General Act (PAGA) but cannot also recover statutory penalties for the same violation. Chapter 716, Statutes of 2019.
AB 1076 (Ting D) Criminal records: automatic relief. Would require the Department of Justice to automatically seal eligible arrest and conviction records without requiring any action from a petitioner. Would preclude CSLB from reviewing all misdemeanors that meet certain restrictions within a year of conviction and certain felonies that meet certain restrictions within three years of conviction. CSLB Position was to OPPOSE but staff was directed to not send a veto request to Governor. There is also language within the bill that conflicts with last year’s AB 2138. A continuation of “ban the box.” Chapter 578, Statutes of 2019.
SB 530 (Galgiani D) Construction industry: discrimination and harassment prevention. Provides that construction industry employers that employ workers pursuant to a multiemployer collective bargaining agreement can satisfy sexual harassment training and education requirements by verifying completion of the training by a state-approved apprenticeship program, labor management training trust, or labor management cooperation committee, and for cases where verification cannot be obtained, by providing it themselves. Chapter 722, Statutes of 2019. SB 688 (Monning D) Failure to pay wages: penalties. SB 688 expands existing provisions for failure to pay minimum wages to wages or compensation that is due under a contract. Specifically, this bill authorizes the Labor Commissioner to issue a citation to an employer to recover restitution of amounts owed, if, upon inspection or investigation, it is determined that the employer has paid or caused to be paid a wage less than the wage set by contract in excess of the applicable minimum wage. Chapter 723, Statutes of 2019.
Licensure SB 610 (Glazer D) Contractors: licensing and regulation. extends the operation of the CSLB to January 1, 2024 requires the board to study and report to the Legislature if the current amount of the contractors’ bond requirement is sufficient would require the board to charge C-10 contractors a $20 fee for enforcement Existing law requires, as a condition precedent to the board accepting an application for licensure, renewal, reinstatement, or to change officers or other personnel of record, that an applicant, previously found to have failed or refused to pay a contractor, subcontractor, consumer, materials supplier, or employee based on an unsatisfied final judgment, file or have on file with the board a bond sufficient to guarantee payment of an amount equal to the unsatisfied final judgment or judgments. Under existing law, if a judgment is entered against a licensee, then a qualifying person or personnel of record is prohibited from serving as a qualifying individual or other personnel of record on any license until the judgment is satisfied. This bill would extend that prohibition to when a judgment is entered against any personnel of record. Chapter 378, Statutes of 2019.
Public Works
AB 520 (Kalra D) Public works: public subsidy. This bill defines a public subsidy as “de minimis” for the purpose of paying the prevailing wage in public works projects if the subsidy is both less than $500,000 and less than 2% of the total project cost. The bill would specifically provide a public subsidy for a project that consists entirely of single-family dwellings is de minimis if it is less than 2% of the total project cost. Vetoed. To the Members of the California State Assembly: I am returning Assembly Bill 520 without my signature. This measure seeks to codify a definition of the term "de minimis" to define the level of public subsidy that would trigger prevailing wage requirements on an otherwise private project. While I steadfastly support prevailing wage law, I am concerned that the restrictive nature of this law may have unintended consequences. Further, there is nothing to suggest that the longstanding administrative practice of considering the public subsidy in the context of the project and using two percent as a general threshold is insufficient. For these reasons, I am returning this bill without my signature. Sincerely, Gavin Newsom
AB 1736 (Daly D) Notification requirements. This bill would require departments and state agencies with an internet website, to post within 24 hours of awarding a construction contract, the name of the successful bidder, the amount of the successful bidder’s bid, and the name of listed subcontractors and their subcontract amounts. Vetoed
To the Members of the California State Assembly: I am returning Assembly Bill 1736 without my signature. This bill would require local government agencies to adopt a policy for notifying the apparent low bidder, and their listed subcontractors, for a public works contract. I appreciate the author's intent to provide timely notice to the winning bidders of public works contracts. However, I am not prepared to mandate this measure's notification requirement on all cities and counties and incur associated costs, particularly when bidders have the option of simply contacting a local government agency to inquire as to the status of a contract award. Sincerely, Gavin Newsom
STEM SB 716 (Mitchell D) Juveniles: delinquency: postsecondary academic and career technical education. This bill requires each county probation department as well as the California Department of Corrections and Rehabilitation, and the Department of Juvenile Justice (DJJ) to ensure that youths with a high school diploma or California high school equivalency certificate who are detained in, or committed to, their respective facilities, have access to various public postsecondary academic and career technical courses and programs. Chapter 857, Statutes of 2019.
STWF AB 1413 (Gloria D) Transportation: transactions and use taxes. This bill authorizes local transportation authorities in Placer and San Diego Counties, which have existing transactions and use tax (TUT) authority, to levy a TUT in any portion of its jurisdiction, with voter approval. Chapter 758, Statutes of 2019.
SB 5 (Beall D) Affordable Housing and Community Development Investment Program. This bill allows local agencies to reduce contributions of local property tax revenue to schools to build affordable housing and related infrastructure. Vetoed.
To the Members of the California State Senate: I am returning Senate Bill 5 without my signature. This bill would establish the Affordable Housing and Community Development Investment Program through which local agencies may redirect property tax revenue for schools to fund affordable housing and related infrastructure. California is in a housing crisis, and I have consistently maintained we need to use all the tools in our toolbox to address it. However, this bill would increase costs by $2 billion annually once fully implemented. Legislation with such a significant fiscal impact needs to be part of budget deliberations so that it can be considered in light of other priorities. I will continue to work collaboratively with the Legislature next year to continue to support increased housing production at all income levels across our state. Sincerely, Gavin Newsom.
