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SB-674 Public Contracts: workforce development: covered public contracts.(2021-2022)

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Date Published: 08/27/2021 09:00 PM
SB674:v94#DOCUMENT

Amended  IN  Assembly  August 30, 2021
Amended  IN  Assembly  July 07, 2021
Amended  IN  Senate  May 20, 2021
Amended  IN  Senate  April 29, 2021
Amended  IN  Senate  April 19, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 674


Introduced by Senator Durazo
(Coauthor: Senator Archuleta)

February 19, 2021


An act to add and repeal Chapter 6.8 (commencing with Section 6980) of Part 1 of Division 2 of the Public Contract Code, relating to public contracts.


LEGISLATIVE COUNSEL'S DIGEST


SB 674, as amended, Durazo. Public Contracts: workforce development: covered public contracts.
Existing law establishes the Labor and Workforce Development Agency, under the supervision of the Secretary of Labor and Workforce Development. Existing law establishes within the Labor and Workforce Development Agency, the Department of Industrial Relations, to foster, promote, and develop the welfare of the wage earners of California and to advance their opportunities for profitable employment, among other duties.
Existing law, the State Contract Act, governs contracting between state agencies and private contractors, and sets forth requirements for the bidding, awarding, and overseeing of contracts for projects. Existing law, the Local Agency Public Construction Act, establishes contracting by local agencies for the construction of public works, and requires local agencies to comply with specified procedures for contracting of public works projects, including, the use of a competitive bidding process and awarding contracts to the lowest responsible bidder, as provided.
This bill would require the Labor and Workforce Development Agency to create 2 programs, to be known as the California Jobs Plan Program and the United States Jobs Plan Program. The bill would require the programs to meet specified objectives, including supporting the creation and retention of quality, nontemporary full-time jobs, as specified, and the hiring of displaced workers and individuals facing barriers to employment. The bill would require, as a component of applications for covered public contracts, as defined, the creation of forms for each program that state the minimum numbers of proposed jobs that are projected to be retained and created if the applicant wins the covered public contract. These components of the application would be known as the California Jobs Plan and the United States Jobs Plan, which the bill would define. Pursuant to these definitions, applicants for covered public contracts would state the minimum number of jobs, proposed wages, benefits, investment in training, specific protections for worker health and safety, and targeted hiring plans for displaced workers and individuals facing barriers to jobs, as specified, in exchange for covered public contracts. The bill would require an applicant for a covered public contract that uses entirely state and local funds to complete a California Jobs Plan form, while applicants for covered public contracts that use any amount of federal funds would complete the United States Jobs Plan.
This bill would require the Labor and Workforce Development Agency, with input from the relevant public agencies, as defined, and relevant federal agencies agencies, and, if they choose to participate, local transportation agencies, to create procedures and criteria to evaluate applicants for covered public contracts. The bill would require United States Jobs Plan procedures and criteria to be sent to specified federal entities for approval prior to implementation. The bill would require the procedures and criteria to award additional consideration to applicants who do specified things. The bill would require the applicant’s California Jobs Plan or United States Jobs Plan to be scored as part of the overall application for a covered public contract, not to exceed 15% of the points of the overall contract score. The bill would also require applicants for subsidies or other covered contracts that are noncompetitive contracts to complete the forms. The bill would make the California Jobs Plan or the United States Jobs Plan submitted by a recipient of a covered public contract a material term of the contract.
This bill would require the Labor and Workforce Development Agency to develop a web-based portal to track California Jobs Plan and United States Jobs Plan commitments and compliance. The bill would require recipients of covered public contracts, beginning on January 1, 2024, and annually thereafter, to upload progress reports to the portal, as specified. The bill would require the portal to be designed to send an automatic notice to the relevant public agency if the information entered into the portal indicates a failure to comply with the commitments made in the California Jobs Plan or the United States Jobs Plan. The bill would require all compliance reporting to be accessible to the public through the web-based portal.
This bill would require that its provisions remain in effect until January 1, 2027. 2028.
By imposing new duties on local jurisdictions in administering covered public contracts, this bill would create 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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Chapter 6.8 (commencing with Section 6980) is added to Part 1 of Division 2 of the Public Contract Code, to read:
CHAPTER  6.8. California Jobs Plan Act of 2021

6980.
 This chapter shall be known, and may be cited, as the California Jobs Plan Act of 2021.

6981.
 (a) The Legislature finds and declares all of the following:
(1) In a time of uncertainty with so many Americans out of work, employment stability and equity are a primary concern.
(2) Spending on green investments creates more jobs per dollar than other infrastructure investments and these jobs are accessible and well paying. Every one million dollars ($1,000,000) in spending on renewable energy creates 7.5 full-time jobs.
(3) Historically vulnerable groups have been disproportionately impacted by economic downturns. For example, for every one percentage point increase in the overall unemployment rate, there is a 1.8-percent increase in African American unemployment.
(4) It is essential that the state, in cooperation with the federal government, use all practical and commercially feasible means to promote the prompt and efficient development of energy sources that are renewable or that more efficiently use and conserve scarce energy resources.
(5) It is in the public interest to do all of the following:
(A) Prioritize reversing factors that have resulted in disproportionate health impacts and economic suffering due to the coronavirus (COVID-19) pandemic among California’s low-income communities, communities of color, and immigrant communities that have historically faced underinvestment and discriminatory policies.
(B) Promote sustainable and renewable energy sources, implement measures that increase efficient energy use, advance transportation technologies that reduce the degradation of the environment, lessen the state’s dependence of fossil fuels, and protect the health, welfare, and safety of the people of this state.
(C) Spend resources to avoid recreating historical patterns of injustice by allocating resources in a manner that will create a just transition to a green, regenerative economy, founded on climate, racial, and economic justice, that puts an end to extreme inequality and systemic racial injustice, and ensures all Californians have a clean and safe environment in which to live, work, and play.
(D) Support a just recovery where workers from all sectors who have lost wages or jobs as a direct result of the pandemic will be prioritized for new employment opportunities that guarantee family-sustaining incomes, pensions, benefit training, retraining, and early retirement assistance.
(E) Require recovery spending to include a mandate for a robust, fully funded public sector that includes significant investments in job creation and community development with a particular focus on a just transition for affected workers.
(F) Expend resources in a broadly inclusive economic and democratic process that ensures robust, accessible opportunities for all Californians to determine the future of our government and economy.
(G) Allocate state funds to programs, businesses, organizations, agencies, and institutions that provide the greatest opportunities for good green jobs, strong labor provisions, and climate-based solutions in a manner that is consistent with the urgency of the climate crisis and the need to make rapid and sustained reductions in greenhouse gases and statewide emissions reduction targets and recommendations from the Intergovernmental Panel on Climate Change.
(H) Ensure that recovery funds reach communities most impacted by the coronavirus (COVID-19) pandemic and prioritize high road employers, as identified by the Labor and Workforce Development Agency, to enhance labor standards, workers’ rights, career pathways, and community benefits.
(I) Restore frontline communities and rapidly accelerate achievements in environmental justice and climate goals, including, but not limited to, climate, environmental, and biodiversity protection and stimulating growth.
(b) It is therefore the intent of the Legislature to support the creation of equitable high-quality transportation and related manufacturing and infrastructure jobs in California through the enactment and implementation of this chapter.

6982.
 Unless the context requires otherwise, for the purposes of this chapter, the following terms shall have the following meanings:
(a) (1) “Applicant” means a private entity that applies, bids, or seeks qualification for a covered public contract. “Applicant” may be more than a single entity.
(2) “Applicant” shall not include a firm, as defined in Section 4525 of the Government Code.
(b) (1) Except as provided in paragraph (2), “covered public contract” means, to the extent otherwise permitted by law, the base term of any public investment in transportation infrastructure, as it relates to procurement, manufacturing, installation, and maintenance of a transportation infrastructure contract with a present value of ten million dollars ($10,000,000) or more to which a California state or local relevant public agency is a party or a transportation-related subsidy, grant, or loan with a present value of ten million dollars ($10,000,000) or more that is provided, granted, or guaranteed by a state or local relevant public agency.
(2) (A) “Covered public contract” does not mean contracts for the construction or design of infrastructure, including, but not limited to, roads, bridges, or highways.
(B) “Covered public contract” does not mean a local agreement approved by the Labor and Workforce Development Agency that create high-roads jobs.
(C) “Covered public contract” does not mean a contract relating to architecture, landscape architecture, engineering, environmental services, land surveying, construction project management, technical support, sales, administration, management, or executive-level professionals.
(c) “California Jobs Plan” refers to a component of an application submitted by applicants for covered public contracts where applicants state the minimum number of jobs, proposed wages, benefits, investment in training, specific protections for worker health and safety, and targeted hiring plans for displaced workers and individuals facing barriers to jobs created or retained in California in exchange for covered public contracts covered under this chapter. This component shall not require any application minimums other than those already required by relevant federal, state, and local laws. If any amount of federal funds are used in a covered public contract, applicants shall instead use a United States Jobs Plan.
(d) “Displaced worker” means either of the following:
(1) Any employee who was employed by the employer for 6 months or more in the 12 months preceding the January 31, 2020, declaration of a national state of emergency by the President, and whose most recent separation from active service was due to a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.
(2) Any employee whose most recent separation from active service was due to lack of business, a reduction in force, or other economic, nondisciplinary reason related to the transition from the fossil fuel industry to renewable energy.
(e) “Individual facing barriers to employment” means either of the following:
(1) An individual facing barriers to employment as defined in subdivision (j) of Section 14005 of the Unemployment Insurance Code.
(2) An individual from a demographic group that represents less than 30 percent of their relevant industry workforce according to the United States Bureau of Labor Statistics.
(f) (1) “Jobs” means all jobs created or retained directly related to the procurement, manufacture, installation, and maintenance of transportation infrastructure in the state. When a California Jobs Plan is used, “jobs” refers to jobs within the state. When a United States Jobs Plan is used, “jobs” refers to jobs within the United States.
(2) “Jobs” does not mean jobs created or retained in the professions of architecture, landscape architecture, engineering, environmental services, land surveying, construction project management, tech support, sales, administration, management, or executive-level professionals.
(g) “Labor and Workforce Development Agency” or “agency” means the agency established pursuant to Part 8.5 (commencing with Section 15550) of Division 3 of Title 2 of the Government Code.
(h) “Protections for worker health and safety” means intentional action taken to protect workers from the COVID-19 pandemic, including, but not limited to, access to personal protective equipment, public health councils, workplace infection control measures, social distancing policies, paid sick leave policies, and hazard pay.
(i) “Relevant public agency” means the Department of General Services, the California Department of Transportation, and local school districts, and local transportation agencies. districts.
(j) “Temporary job” means a job for which the employee is supplied by a temporary services employer, as defined in subdivision (b) of Section 606.5 of the Unemployment Insurance Code.
(k) “United States Jobs Plan” means a component of an application submitted by an applicant for covered public contracts when any amount of federal funds are used and the applicant states the minimum number of jobs, proposed wages, benefits, investment in training, specific protections for worker health and safety, and targeted hiring plans for displaced workers and individuals facing barriers to jobs created or retained in the United States in exchange for covered public contracts covered under this chapter. This program shall not give any state or local preference and instead award preference for United States-based job creation and retention. This component shall not require any application minimums other than those already required by relevant federal, state, and local laws.

6983.
 (a) Beginning on July 1, 2022, the Labor and Workforce Development Agency shall solicit input from affected relevant public agencies and relevant federal agencies agencies, and, if they choose to participate, local transportation agencies, on the creation of the California Jobs Plan Program and the United States Jobs Plan Program and development of procedures, evaluation and scoring criteria, and all necessary forms and guidance. The Labor and Workforce Development Agency is authorized to designate its responsibilities under this chapter to one or more of the departments that it oversees.
(b) The Labor and Workforce Development Agency shall create a California Jobs Plan Program and a United States Jobs Plan Program that meets all of the following objectives:
(1) Support the creation and retention of quality, nontemporary and full-time jobs that provide high wages, including benefits and access to training.
(2) Support the hiring of displaced workers and individuals facing barriers to employment.
(3) Encourage the development of the state’s long-term, climate-sustainable transportation and related infrastructure and manufacturing sectors.
(4) Protect public health by supporting the adoption of specific protections for worker health and safety.
(c) The California Jobs Plan Program shall require applicants for covered public contracts using entirely state and local funds to complete a California Jobs Plan form. The United States Jobs Plan Program shall require applicants for covered public contracts using any amount of federal funds to complete a United States Jobs Plan form, with no state or local preference, in compliance with Sections 200.319(c) and 200.322 of Title 2 of the Code of Federal Regulations. In the event that a federal authority specifically authorizes the use of geographic preference and Section 200.319(c) of Title 2 of the Code of Federal Regulations is repealed or rescinded, the California Jobs Plan shall be used for all contracts, instead, upon approval from a federal authority. The application component shall not require any minimum commitments other than those already required by relevant federal, state, and local laws. The component shall request that the applicant state the minimum numbers of proposed jobs and other related information that are projected to be retained and created if the applicant wins the covered public contract in the following categories:
(1) The number of full-time nontemporary jobs proposed to be retained and created.
(2) The number of full-time temporary jobs proposed to be retained and created.
(3) The number of part-time temporary jobs proposed to be retained and created.
(4) The number of part-time nontemporary jobs proposed to be retained and created.
(5) The number of jobs classified as employee, as specified in Section 2750 of the Labor Code.
(6) The number of positions classified as independent contractor, as specified in Section 2750.5 of the Labor Code.
(7) The number of all jobs proposed to be retained or created for individuals facing barriers to employment.
(8) The number of all jobs proposed to be retained or created for displaced workers.
(9) The wage levels by job classification.
(10) Proposed amounts to be paid for fringe benefits by job classification.
(11) Proposed amounts to be paid for worker training by job classification.
(12) Information on training programs targeted specifically toward individuals facing barriers to employment and displaced workers.
(13) Whether the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond that which is required by state or federal law or regulation.
(d) The programs created pursuant to this chapter shall not apply to requests for proposals or contracts issued prior to December 1, 2022.

6984.
 (a) By September 1, 2022, the Labor and Workforce Development Agency, in consultation with relevant public agencies and relevant federal agencies, and, if they choose to participate, local transportation agencies, shall develop procedures and criteria for relevant public agencies to evaluate applicants for covered public contracts pursuant to this chapter. This development process shall ensure consistency with existing policies of relevant public agencies and local, state, and federal law. All final United States Jobs Plan procedures and criteria shall be sent to the federal Transportation Agency, Federal Transit Administration, the United States Department of Transportation and relevant federal agencies for approval, prior to implementation, to ensure compliance with Section 200.319(c) of Title 2 of the Code of Federal Regulations.
(b) The procedures and criteria shall award additional consideration to applicants who do any of the following:
(1) Enhance the state’s commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(2) Create the greatest number of full-time, nontemporary employees compensated at a wage rate at or above the living wage rate as established in the living wage calculator published by the Massachusetts Institute of Technology, using the living wage rate for a household of two working adults with two children.
(3) Retain the greatest number of full-time, nontemporary employees compensated at a wage rate at or above the living wage rate in the living wage calculator published by the Massachusetts Institute of Technology, using the living wage rate for a household of two working adults with two children.
(4) Make concrete commitments to maintaining at least 90 percent of the labor on a contract performed by properly classified employees pursuant to Section 2750.5 of the Labor Code.
(5) Offer targeted training and opportunities for individuals facing barriers to employment and displaced workers.
(6) Have the greatest beneficial economic impact on the state and local economies as a result of receiving the public contract, based on the priority criteria outlined in this chapter.
(c) Beginning December 1, 2022, the California Jobs Plan and the United States Jobs Plan shall be scored as a part of the overall application for the covered public contract, in an amount not to exceed more than 15 percent of the points of the overall contract score. To the extent that a subsidy or other covered public contract is noncompetitive, applicants shall still complete the California Jobs Plan or the United States Jobs Plan application form. The California Jobs Plan or the United States Jobs Plan shall be included in the awarded public contract as a material term. All job-related commitments made by companies during the application process shall be accessible to the public after the public contract is awarded through the web-based portal described in Section 6985.

6985.
 (a) The Labor and Workforce Development Agency shall develop a web-based portal to track California Jobs Plan and United States Jobs Plan commitments and compliance. The portal shall be designed to send an automatic notice to the relevant public agency if the information entered into the portal indicates a failure to comply with the commitments made in the California Jobs Plan or the United States Jobs Plan. Recipients of covered public contracts, under this chapter, beginning on January 1, 2024, and annually thereafter shall be required to upload progress reports on the commitments made in the California Jobs Plan or the United States Job Jobs Plan for the duration of the covered public contract. At a minimum, the information provided pursuant to this subdivision shall include all of the following:
(1) The number of full-time nontemporary jobs to be retained and created.
(2) The number of full-time temporary jobs to be retained and created.
(3) The number of part-time temporary jobs to be retained and created.
(4) The number of part-time nontemporary jobs to be retained and created.
(5) The number of jobs classified as employee, as specified in Section 2750 of the Labor Code.
(6) The number of positions classified as independent contractor, as specified in Section 2750 of the Labor Code.
(7) The number of all jobs to be retained or created for individuals facing barriers to employment.
(8) The number of all jobs to be retained or created for displaced workers.
(9) The wage levels by job classification.
(10) Any amounts that will be paid for fringe benefits by job classification.
(11) Any amounts that will be paid for worker training by job classification.
(12) Information on training programs targeted specifically towards individuals facing barriers to employment. employment and displaced workers.
(13)  Whether the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond that which is required by state or federal law or regulation.
(b) All California Jobs Plan and United States Jobs Plan compliance reporting shall be accessible to the public through the web-based portal.

6986.
 This chapter shall remain in effect only until January 1, 2027, 2028, and as of that date is repealed.

SEC. 2.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.