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WECA Political Update July 7, 2022

Thursday, July 7, 2022

A Troubling Trend for Public Works in California Until recently, the State Building and Construction Trades Council required authors of prevailing wage legislation to incorporate one or more of the following “boilerplate” provisions:

·        A mandate for a Skilled and Trained Workforce. But if a PLA is in place, the contractor is not required to report monthly of its compliance, and instead of the $10,000 per month penalties levied by DLSE, an arbitration alternative to solve the issue,
·        A waiver for contractors to keep and submit certified payroll records,
·        A prohibition of DLSE enforcement wage and hour violations on PLA projects,
·        A definition of “safe contractor” that includes all union contractors, regardless of their experience or safety record,
·        And a general requirement to pay prevailing wages, even on 100% private work.

However, in 2021, Assembly Member Burke – who authored AB 680 – started a trend when she renounced her elected position and abruptly quit her job on January 31, citing the “challenges of a post-COVID-19 landscape and wanting to spend more time with her family” and become a lobbyist. Burke announced via Twitter that she joined Axiom Advisors, “a full-service government affairs firm that provides strategic consulting to clients in Sacramento and throughout California, as a principal consultant.” Axiom is the brainchild of Jason Kinney. CalMatters noted after the 2018 election, referring to Kinney, “As the revolving door turns, a Capitol fixer is poised to ascend with Gavin Newsom—and legal weed.”

But back to the trend. AB 680 was the first bill to link State funds to a PLA. AB 680 established the California Jobs Plan Act of 2021, which requires the State Air Resources Board (CARB) to work with the Labor and Workforce Development Agency (LWDA) to update, by July 1, 2025, the funding guidelines for administering agencies to ensure that all applicants to grant programs funded by the Greenhouse Gas Reduction Fund (GGRF) meet fair and responsible employer standards and provide inclusive procurement policies. So, what did the State Legislature and Gavin Newsom define as “inclusive?” First, proponents shall provide evidence of a community workforce agreement for construction projects over one million dollars ($1,000,000) in funding. The bill defines a “community workforce agreement” as a project labor agreement that includes a targeted hire plan.

The passage of AB 680 and its enactment established that the Democratic leadership in California had zero concern about linking PLAs to state funding. As a result, in 2022, language similar to that in AB 680 is showing up in many bills:

·        AB 1161 (Garcia, Eduardo-D) Electricity: eligible renewable energy and zero-carbon resources: state agencies: procurement. Requires the Department of Water Resources to only purchase power from projects constructed using project labor agreements.
·        AB 2419 (Bryan-D) Environmental justice: federal Infrastructure Investment and Jobs Act: Justice40 Advisory Committee. For a construction project that will cost $5,000,000 or more, IIJA funds may be allocated only if the construction project will be performed under a PLA.
·        SB 22 (Glazer-D) Education finance: school facilities: Public Preschool, K–12, and College Health and Safety Bond Act of 2022. It requires the Department of General Services to prioritize projects for funding, including using a project labor agreement (PLA).
·        SB 162 Committee on Budget and Fiscal Review establishes the Community Economic Resilience Fund Program, administered by the Workforce Services Branch at the Employment Development Department. The program shall be overseen by the Labor and Workforce Development Agency, Office of Planning and Research, and the Governor’s Office of Business and Economic Development referred to as the Inter-Agency Leadership Team. Projects funded by CERF must “support labor standards where applicable, such as prevailing wage, project labor agreements, or community workforce agreements.”
·        SB 1020 (Laird-D) Clean Energy, Jobs, and Affordability Act of 2022. This bill establishes interim targets to reach SB 100 clean energy goals and requires state agencies to purchase 100 percent zero-carbon electricity by 2030 to serve their load. Requires new procurement commitments made on behalf of a state agency to be constructed with contractors using multi-craft project labor agreements. Requires new procurements made for the State Water Project after February 1, 2022, to use multi-craft project labor agreements for construction.
·        SB 1105 (Hueso-D) San Diego Regional Equitable and Environmentally Friendly Affordable Housing Agency. Creates the San Diego Regional Equitable and Environmentally Friendly Affordable Housing Finance Agency and grants it the authority to impose taxes and fees. The bill would also require the agency to execute a PLA with the San Diego County Building and Construction Trades Council and the San Diego Housing Federation before placing a measure on the ballot to raise revenue for the agency.

From one bill in 2021 to six in 2022 is a troubling trend!
Why Does IBEW Hate Rooftop Solar? Our brothers and sisters at the IBEW are trying their best to put proverbial nails into the coffin of rooftop solar. Why and how?

First is their long-term effort to prohibit C-46 solar contractors from installing anything bigger than the rough equivalent of a “D cell” battery in any rooftop PV they install. They want all C-46 to become C-10 and hire only certified electricians. While many of you C-10s will agree this idea makes sense, it is another example of how the IBEW controls the industry – and how the government is a willing contributor. CSLB recently decided to open the regulatory process to cap the size of BESS a C-46 can install.

Second, for years IBEW has led an effort to revise the tariff for net-energy metering (NEM), which would drastically cut the payments rooftop solar owners receive from utilities for the energy they feed back into the system.

Third, and perhaps best is AB 2143 (Carrillo), which will require that prevailing wage be paid on renewable energy installation projects with a generating capacity of more than 15 kilowatts (kWs) and which receive service under an electric utility’s NEM tariff. The bill's sponsors, the California State Association of Electrical Workers and the Coalition of California Utility Employees, explained in their support letter that “AB 2143 addresses two critical issues surrounding the rooftop solar. First, it addresses the exclusion of lower-income communities from participating in rooftop solar.” (So, assuming a PW requirement raises the cost of rooftop solar, higher costs improve things for “lower-income communities”!) Second, “AB 2143 would require the Public Utilities Commission (PUC) to submit an annual report to the Legislature documenting the progress of rooftop solar deployment by zip code and census track to fix rooftop solar inequities in communities facing the largest cost shifts.” Ah, that explains it!

Now, the why. IBEW represents both the employee electricians of signatory C-10 contractors AND utility employees! The union C-10s will, arguably, already be paying PW as part of the CBA, so it won’t make them any less competitive (and perhaps more competitive if every installer is now paying PW) and, more importantly, if this makes rooftop PV unaffordable, utilities will be left as the only supplier of solar power – a double win for IBEW.

Concerns about the impact on clean energy didn’t stop Democrats Dave Cortese, Maria Elena Durazo, and Josh Newman from passing the bill out of committee but Democrat (and frequent target of construction union animosity Scott Wiener) joined the only Republican on the Labor Committee, Rosilicie Ochoa Bogh, in voting no. After that, the bill goes to the Appropriations Committee, then to the floor in August.
U.I. Loan California will pay down a fraction of its U.I. debt - only $1 billion over two years – toward the $17.8-billion federal loan that the state used to fill a hole left by a surge in unemployment claims during the worst of the pandemic. This is despite an almost $100 billion windfall budget surplus in 2021-22! “Why so little when the State could have paid all the debt it incurred with the budget surplus?”, you ask. A power play of public employee unions. They want to blow open the Jarvis-Gann Limit (Prop 13) and expect influential (and wealthy) groups, the realtors, the apartment owners, and other business groups to oppose it. Unions will bargain with these groups to remove or soften their opposition, or the unions will prohibit (through their control of Democrats) the State from repaying the loan, which will trigger massive increases in U.I. premiums on California employers. These premium jumps are required when a state borrows money but chooses not to repay it.
City of Phoenix forgoes more water from Lake Mead due to declining levels. The city of Phoenix said Friday that it would forfeit delivery of an additional 14,000 acre-feet, or 4.5 billion gallons, of Colorado River water to shore up Lake Mead. Story
Fresno lawmakers back off hefty pay raises: This proposal would reorient how Fresno's City Council is paid, tying their salaries to the hefty compensation offered to Fresno County Superior Court judges and Fresno County Supervisors isn't going to happen. Instead, lawmakers agreed to a more modest, scaled pay bump over the next three years to bring their pay closer to the city councils of the state's largest cities. The pay proposal, introduced amid Fresno's oft-contentious budget process, overshadowed record-spending for the fiscal year 2022-2023.
How many U.S. House incumbents lost re-election on June 28?

Election season is in full swing, and three U.S. House primaries incumbents — one Democrat and two Republicans — lost. Research suggests that the total number of incumbents defeated so far in 2022 is above the average decade. How many U.S. House incumbents lost in primaries, on average, between 2012 and 2020? 7? 14? 9? 4? I'll discuss the answer in a future bulletin.

And if things were not bad enough, Scientists predict a ketchup shortage by 2050. Scientists have a new concern about climate change... running out of ketchup. Story

Fifth Circuit Rules that COVID-19 Pandemic Did Not Trigger the “Natural Disaster” Exception to WARN Notice Requirements In the first such decision from a federal appellate court, the U.S. Court of Appeals for the Fifth Circuit has ruled the COVID-19 pandemic is not a “natural disaster” that exempts employers from providing advance notice of mass layoffs and plant closures under the WARN Act. The court also opined that the natural-disaster exception requires proof of proximate causation, not but-for causation. Story

Unions protest $600M De Niro NYC Studio Project New York City union chapters took a united stance against Robert De Niro’s $600 million movie studio project on the Astoria waterfront that has broken ground and will primarily use non-union labor. The unions — including Sheet Metal Workers Local 28, Steamfitters Local 638, and Laborers’ Local 79 — protested the project on June 17, criticizing the actor for making outspoken pro-union comments publicly, but choosing to use non-union labor to build his Wildflower Studios building. Story

Transportation, Labor, Business, Environmental Groups Object to Biden Gas Tax Holiday Proposal; But At-Risk Democratic Members of Congress Applaud. Biden’s “gimmick” (Mitch McConnell’s words, not mine) has already received pushback from both sides of the aisle and prominent non-governmental organizations. In a letter sent to the White House, the Americans for Transportation Mobility Coalition and the Transportation Construction Coalition expressed their opposition as well. “Suspending the gas tax will not provide meaningful relief for consumers — it will instead subsidize the largest and most profitable industry on the planet,” the National Association of City Transportation Officials said in an emailed statement. Okay, I don’t have any photo of at-risk Democrats (or anyone, for that matter) applauding. Story

House Appropriations Subcommittee Advances Labor Spending Bill The House Appropriations Labor-HHS-Education Subcommittee approved a bill funding the Labor Department for fiscal year 2023. Some of the labor policy provisions include a prohibition on the privatization of job search functions offered through the employment service system and a block on Trump-era apprenticeship programs overseen by the private sector. In addition, the measure would appropriate $319 million to the National Labor Relations Board — including $1 million to create a system for the agency to hold union elections electronically, a years-long push by Democrats. It would also spend $3.2 billion on unemployment insurance, which matches the White House’s request of $334 million more than fiscal year 2022. That does not include additional contingency funding to states if benefit claims spike. Lawmakers advanced the legislation by voice vote. But Republicans made clear they did not support the measure, which subcommittee ranking member Tom Cole (R-Okla.) said contained “poison-pill policy riders” that move the U.S. “toward a leftist agenda that is out of step with the American people.” Packaged alongside spending for the Education and Health and Human Services departments, the legislation proposes $15 billion in discretionary funds for DOL — a boost of $1.9 billion above what it had in fiscal year 2022 and $125 million more than President Joe Biden requested. That’s enough for sizable increases for the Employment and Training Administration ($1.3 billion more than fiscal year 2022) and OSHA ($100 million more than fiscal year 2022), among other agencies.

November Ballot

The Secretary of State's Office certified five initiatives for the November ballot recently, in addition to SCA 10, the Legislature's abortion constitutional amendment, which will appear on the ballot as Proposition 1 (specified by the passage of the SB 131 budget trailer bill), and the flavored tobacco referendum.

Californians will not vote in November on raising the state's minimum wage to $18 an hour after a proposed ballot initiative fell just short of the ballot. Counties did not finish certifying that the measure had enough signatures before a June 30 deadline. The miss removes a high-profile — and likely expensive – fight from the ballot chessboard.

Legislative Calendar:

·        July 1 Summer Recess begins upon adjournment, provided Budget Bill has been passed
·        July 4 Independence Day / State holiday
·        Aug. 1 Legislature reconvenes from Summer Recess
·        Aug. 12 Last Day for fiscal committees to meet and report bills to the Floor
·        Aug. 15 - 31 Floor Session only. No committees, other than conference and Rules, may meet for any purpose
·        Aug. 25 Last Day to amend bills on the Floor
·        Aug. 31 Last Day for each house to pass bills
·        Final Recess begins at end of this day's session

And finally, a note from our friend and frequent collaborator, Eric Christen at CFEC.

Much is happening on the CEQA reform front:

ICON Lawsuit Against Union Extortion Notches Another Victory! In April, the ICON Company in Los Angeles had an appeals court unanimously reverse a lower court's decision on their project. Labor unions had used greenmail on the project to force ICON into “agreeing” to a Project Labor Agreement (PLA). This was great news as ICON was now back to being fully entitled. BUT, then the unions filed a petition for review with the State Supreme Court. Ten amicus briefs were filed on the unions’ behalf requesting the review, including one from California’s Attorney General Rob Bonta! Well, the Supreme Court just denied their petition for review, which means that the published opinion is now and forever citable. ICON’s entitlements have been fully reinstated, and they should have smooth sailing in federal court with their antitrust case. Great news!

San Francisco Chronicle Opinion Piece Regarding Union CEQA Abuse: If you have not had a chance to read this op-ed by Robert Selna that ran in the San Francisco Chronicle Sunday regarding CEQA abuse by big labor special interests, here it is: Union CEQA Abuse Must Stop. Mr. Selna does an excellent job highlighting what we have been discussing and how reform is needed – now.
California Court Decries CEQA Abuse: In its stunning opinion delivered on May 12 in Tiburon Open Space Committee v. County of Marin, the First District of the California Court of Appeal upheld Marin County's approval of a 43-unit residential project following decades of "not in my backyard" (NIMBY) obstruction, governmental recalcitrance, and multiple court challenges. In so holding, the Court zealously denounced "official hostility" from "two levels of local government" and NIMBY litigation tactics aimed at preventing the construction of much-needed housing during a statewide housing crisis. The ultimate impact of the Tiburon Open Space Committee remains to be seen, but it has the potential to cast a long shadow. As acknowledged by the Court, "CEQA lawsuit abuse is worsening California's housing crisis. … Something is very wrong with this picture." Hopefully, the Court's forceful affirmation that CEQA is subordinate to state laws limiting the discretionary authority of local agencies to deny or pare the density of compliant housing projects will reduce opportunities to leverage CEQA as an "instrument for the oppression and delay" that has "become its own reward for project opponents." After all, as this important case makes clear, "CEQA is not meant to cause paralysis." Read the story here
Next Steps:
If your company is interested in CEQA reform and you want to join the next Zoom meeting, contact Eric Christen, Executive Director, Coalition for Fair Employment in Construction.