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By: Anthony Tannehill

In the final days before the deadline to sign or veto legislation, Governor Gavin Newsom vetoed Assembly Bill 2182 (Haney), a measure opposed by CSDA, as well as Assembly Bill 1890 (Joe Patterson), a measure for which CSDA had previously removed opposition. A copy of CSDA’s AB 2182 veto request letter to the Governor can be viewed here.

AB 2182 (Haney) – Joint Labor Management Committee Access and Prevailing Wage

AB 2182 consisted of two primary components. First, the bill would have required public works jobsites to give reasonable access to representatives of a joint labor-management committee (JLMC) to monitor compliance with prevailing wage and apprenticeship requirements. The bill would have authorized the committee to bring an action against an awarding body (local agency), contractor, or subcontractor that willfully denies the committee’s representative reasonable access.

Second, the bill would have required changes in prevailing wage to be applied throughout the contract. The bill generally provided that a change in prevailing wage, as specified, shall apply on its effective date to any contract for which notice to bidders is published after July 1, 2026, that meets all of the following requirements: (1) the contract is not for the development of housing; (2) the contract is subject to a specified chapter of the Labor Code; (3) the awarded value of the prime contract is thirty-five million dollars ($35,000,000) or greater; and, (4) the contract is not awarded by the state or a state agency, nor is the contract awarded in furtherance of a project undertaken by the state.

CSDA sought a veto of the measure due to concerns about potential unanticipated cost pressures or increases to public works projects midstream and the costs to the contractor that would need to recoup these unexpected costs because of prevailing wages increasing during an ongoing contract. Changes to wages mid-stream will result in uncertainty in bidding and contracting and put projects in jeopardy. Further, CSDA argued that the bill’s JMLC jobsite access provisions were duplicative, as specified.

Cost considerations were a significant factor in the veto of the measure, with the Governor’s veto message providing:

While I am a steadfast supporter of prevailing wage law, the adjustments proposed by this measure would likely lead to uncertainty in the cost of public works projects, potentially creating significant cost pressures on the state budget.

Timely and efficient project delivery is of significant importance to special districts. CSDA is a leader in advocating for measures that help special districts make the best use of public dollars for public works investments, while advocating against measures, such as AB 2182, which undermine that goal.

AB 1890 (Joe Patters) Department of Industrial Relations Notification Requirements

The introduced version of AB 1890 would have mandated the awarding body of a public works contract to notify the Department of Industrial Relations (DIR) in the event of a change in contractor or subcontractor identity or if the contractor’s total amount changes by over $10,000 within 30 days. CSDA and its local government partners, removed opposition when the measure was substantially amended following earnest conversations with the author and stakeholders that resulted in language to raise the proposed reporting thresholds to a two-tiered system of those changes that resulted in the total contract exceeding $30,000 and again when exceeding $200,000. The Governor vetoed the measure, stating in his veto message:

…While I appreciate the author's efforts to provide transparency to public works contracts, this bill is unnecessary. Local agencies are already required to electronically notify DIR with a contractor's name and contract value prior to the first day that work is performed on a public works project. Additionally, existing law prohibits a general contractor from replacing or substituting a subcontractor without written request and permission from the contracting agency. The additional notification requirements proposed by this bill would create unnecessary administrative burdens and penalties on awarding agencies, without any clear benefits or added transparency….

Unfunded state mandates continue to be challenging for those local agencies that are tasked with providing essential local services. CSDA was at the table to lessen the impact of this measure prior to its veto.

Stay tuned for CSDA eNews and Advocacy News for additional public works legislative updates.