Existing law establishes the California Broadband Council in state government for the purpose of promoting broadband deployment in unserved and underserved areas of the state and broadband adoption throughout the state and imposes specified duties on the council relating to that purpose, including taking actions to ensure that state agencies are coordinating efforts and resources to promote broadband deployment and adoption. Existing law also establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of Californias workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce.

This bill would enact the Broadband Labor Standards Act. The bill would require the board, by January 1, 2026, to convene relevant stakeholders and state agencies to develop model contract terms for broadband deployment projects that are awarded grants by state agencies and to provide a recommendation on a memorandum of understanding between the board and the Public Utilities Commission to enable development of high road job creation on broadband deployment projects and expand access to those jobs, as specified. By July 1, 2026, the bill would require the board to post the model contract terms on the boards internet website and submit a report to the Legislature on specified matters, including a summary of the discussions with relevant stakeholders and state agencies to develop the model contract terms. The bill would require any model contract terms developed pursuant to the bills provisions to be applied to a contract related to a broadband deployment project or application entered into or amended by a state agency, as specified.

Existing law establishes the Department of Industrial Relations in the Labor and Workforce Development Agency to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment.

This bill would state the intent of the Legislature to enact subsequent legislation relating to broadband labor standards.

Date of Hearing: August 7, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1460

Author:(Durazo) – As Amended Ver:July 2, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill enacts the Broadband Labor Standards Act.

Specifically, this bill:

1. Requires, by January 1, 2026, the California Workforce Development Board (CWDB) to convene relevant stakeholders and state agencies, including the Public Utilities Commission (PUC) and Department of Industrial Relations (DIR), to:
2. Develop model contract terms for broadband deployment projects awarded grants by state agencies. The contract terms must increase the utilization of recognized union apprenticeships in the telecommunications sector.
3. Provide a recommendation on a memorandum of understanding (MOU) between CWDB and the PUC to enable development of high road job creation on broadband deployment projects and expand access to those jobs for priority populations.
4. Requires, by July 1, 2026, CWDB to post the model contract terms on its website and submit a report to the Legislature including:
5. A summary of discussions with relevant stakeholders and state agencies to develop the model contract terms.
6. The recommendation from relevant stakeholders and state agencies on the MOU.
7. Requires model contract terms be applied only to a contract or application entered into or amended by a state agency after the development of the model is complete.

FISCAL EFFECT:

1. Annual costs of approximately $1.1 million to CWDB to convene relevant stakeholders and state agencies to develop model contract terms, provide a recommendation on an MOU, and submit the related report (General Fund (GF)).
2. Minor and absorbable costs to DIR to engage with CWDB and other relevant stakeholders and state agencies on model contract terms and the MOU. Similarly, minor and absorbable costs to the Department of Technology (CDT).
3. Annual costs of approximately $210,000 to the PUC to participate in convenings to develop model contract terms and provide a recommendation on the MOU (PUC Utilities Reimbursement Account). The PUC notes it would also work within its current programs to implement and promote use of the model contract terms.
4. Cost pressures of an unknown, but potentially significant, amount to the extent model contract terms are adopted for state broadband projects and lead to higher project costs, potentially resulting in fewer projects completed with existing funds and increased demand to appropriate additional funds to support more projects (federal funds, GF, California Advanced Services Fund (CASF)).

According to the Legislative Analyst’s Office, the GF faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1. Purpose. According the author:

When California rolled out billions of taxpayer funded middle mile projects, labor standards requirements were not included in the statutory language…Without strong labor standards, we may end up with a network that is incomplete or cannot be kept running, and the workers who are available may come through contractors who are not providing the best health and safety training, and the technical training that is broadband specific.

This bill is sponsored by the Communications Workers of America, District 9, and supported by the California Labor Federation. Recent amendments to this bill adopted by the Assembly Communications and Conveyance Committee regarding the effective date of model contact terms removed all registered opposition.

1. State Broadband Deployment Programs. Existing state broadband program duties are generally split between the PUC and CDT. The PUC administers the CASF and the federal Broadband, Equity, Access and Deployment (BEAD) program, for which California was awarded $1.86 billion through the Infrastructure Investment and Jobs Act. CDT administers the Middle-Mile Broadband Initiative (MMBI), primarily funded by federal COVID-19 relief monies. Unlike the PUC-administered programs, MMBI is not a grant program, although the state has entered into contracts with various private companies to complete the initiative.

This bill requires CWDB, in consultation with other entities, including the PUC, to develop model contract terms for broadband deployment projects awarded grants by state agencies. As noted in Assembly Communications and Conveyance Committee’s analysis of this bill:

The term “broadband deployment projects” is not defined in this bill, which raises questions about which projects or programs would be covered. Based on the current drafting of this bill, the MMBI would arguably not be included in whatever model contract terms the CWDB and its partners adopt because the MMBI is not generally understood to be a grant program and the construction contracts to complete the project are likely not considered grants.

In October 2020, CWDB and the PUC entered into an MOU “to draw upon the expertise of the CWDB” to provide “advice and recommendations to ensure CPUC policies and regulated programs create or support high-quality jobs in the energy and transportation sectors and expand access to those jobs for priority populations.” This bill also requires CWDB to provide a recommendation on an MOU with the PUC to enable development of high road job creation on broadband deployment projects and expand access to those jobs for priority populations, thus impacting CASF and BEAD. Although this requirement does not reference “projects awarded grants,” the MMBI also would not be impacted by this provision because the MMBI is not administered by the PUC. Lastly, this bill requires model contract terms be applied only to a contract or application entered into or amended by a state agency after the development of the model is complete. However, this bill does not explicitly require agencies to apply the model contract terms or enter into an MOU.

1. Related Legislation. SB 1375 (Durazo) requires CWDB and a state or local agency administering federal jobs act funds to develop an MOU to establish poverty-reducing labor standards for investments made with such funds, with CWDB providing related technical assistance. SB 1375 is pending hearing in this committee.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: June 26, 2024

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Tasha Boerner, Chair

SBPCA Bill Id:SB 1460

Author:(Durazo) – As Amended Ver:April 25, 2024

SENATE VOTE: 30-9

SUBJECT: Broadband Labor Standards Act: broadband deployment projects: model contract terms: memorandum of understanding

SUMMARY: This bill requires, by January 1, 2026, the California Workforce Development Board (CWDB) to convene relevant stakeholders and state agencies to develop model contract terms for broadband deployment projects that are awarded state grants.

Specifically, this bill:

1. Provides that relevant stakeholders and state agencies includes, but is not limited to, recognized labor unions, the California Public Utilities Commission (CPUC), and the Department of Industrial Relations.
2. Requires the CWDB to provide a recommendation on a memorandum of understanding between the CWDB and the CPUC that would enable job creation in the broadband sector and expand access to those jobs.
3. Requires, by July 1, 2026, the CWDB to post the model contract terms on the CWDB’s website.
4. Requires, by July 1, 2026, the CWDB to submit a report to the Legislature which includes specified information, such as a summary of the discussions the led to the development of the model contract terms and the recommendation on a memorandum of understanding.
5. States that the requirement for submitting a report is inoperative on July 1, 2030.

EXISTING LAW:

1. Establishes California Workforce Development Board (CWDB) as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. (Unemp. Ins. Code § 14010 et seq.)
2. Requires the California Public Utilities Commission (CPUC) to develop, implement, and administer the California Advanced Services Fund (CASF) program to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and substantial social benefits of advanced information and communications technologies, as provided in specific decisions of the CPUC and in the CASF statute. (Public Utilities Code § 281(a))
3. Provides that projects funded pursuant to the Federal Funding Account (FFA) of the CASF shall be implemented consistent with applicable federal regulations and any condition or guidelines applicable to the one-time federal infrastructure moneys. (Public Utilities Code § 281 (n))
4. Defines “public works” to include an infrastructure project grant from the California Advanced Services Fund. (Labor Code § 1720).

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. Unknown, but likely significant costs to the CWDB for their assigned duties.
2. The CPUC estimates ongoing costs of $210,000 annually (ratepayers’ funds) to participate in meetings, develop an MOU with the CWDB, and support reporting to the Legislature.
3. The California Department of Technology anticipates any administrative costs would be minor and absorbable.
4. An unknown, potentially significant, cost pressures on state broadband projects, contingent on the adoption of the model contract terms.

COMMENTS:

1. Justification for this bill. California lacks an established outline of high road labor standards designed to uniformly apply to all state-funded broadband projects in the state. The author argues that this results in projects going forward with minimal and non-specific labor standards; a missed opportunity to establish California as a leader to ensure safe and effective broadband buildout. Absent statutorily mandated labor standards, these publicly funded projects will rely on minimal requirements for workers, and contracted workers. To remedy these deficiencies with existing requirements, the author claims that “SB 1460 will help establish standards for access to high paid jobs and safe working conditions in our broadband buildout.”
2. Overview of the state’s broadband deployment programs. Under the current administrative structure for the state’s broadband programs, duties are split primarily between the Public Utilities Commission (CPUC) and Department of Technology (CDT).

The CPUC administers at least two broadband deployment programs, the California Advanced Services Fund (CASF) and the Broadband, Equity, Access and Deployment (BEAD) program. Existing state law expressly authorizes the CPUC to develop, implement, and administer the CASF program to encourage the deployment of high-quality advanced services to all Californians in order to promote economic growth, job creation, and societal benefits. The CASF program consists of several distinct subaccounts with particular focuses, including broadband infrastructure and broadband adoption. The subaccounts of the CASF program include: the Broadband Adoption Account, Broadband Infrastructure Grant Account (IGA), Federal Funding Account (FFA), Broadband Public Housing Account, Rural and Urban Broadband Consortia Grant Account, Line Extension Pilot Program, and Tribal Technical Assistance Program. Notably, infrastructure project grants funded from the CASF are considered a “public work” under the Labor Code.

In addition to the CASF, the CPUC is also administering the federal BEAD program funds in California. BEAD is a federal program established pursuant to the Infrastructure Investment and Jobs Act, for which California has been awarded $1.86 billion dollars. Under BEAD, the CPUC will award grants for construction of broadband infrastructure networks in unserved and underserved areas of the state. As a block grants to the state, BEAD includes federal requirements, including labor standards. Although much of the program design for administration of BEAD funds has been determined by the federal government, states do have some flexibility in implementing the program within their state. As of December 2023, California has submitted its plan for administering the BEAD program in California and is currently awaiting approval of the entire plan. Once the plan is approved, the CPUC will be required to follow the plan when administering the program and awarding grant funds.

Lastly, the California Department of Technology (CDT) administers the state’s Middle-Mile Broadband Initiative (MMBI) program. The MMBI is a broadband infrastructure program for the construction of an open-access middle-mile network to bring equitable high-speed broadband service across California. As of this budget year, the state has committed about $3.75 billion to the project, most of which is coming from federal COVID-19 relief funding under the American Rescue Plan Act (ARPA). Unlike the programs administered by the CPUC, the MMBI is not a grant program, although the state has entered into an assortment of contracts with various private companies to complete the project. For example, for about half the planned miles of the network, the state has entered into contracts with telecommunications companies to lease capacity on existing infrastructure. The state is also entering into construction contracts to construct new middle-mile broadband infrastructure in partnership with CalTrans.

1. Which projects and programs will be covered by this bill? This bill requires the CWDB, in consultation with other stakeholders and state agencies, to develop model contract terms for “broadband deployment projects that are awarded grants by state agencies” by January 1, 2026. The term “broadband deployment projects” is not defined in this bill, which raises questions about which projects or programs would be covered. Based on the current drafting of this bill, the MMBI would arguably not be included in whatever model contract terms the CWDB and its partners adopt because the MMBI is not generally understood to be a grant program and the construction contracts to complete the project are likely not considered grants. Therefore, the MMBI would not be a project awarded a grant by a state agency.

The CASF and the BEAD program, however, are clearly grant programs and the grant-funded projects under those programs would clearly be covered by this bill. Nonetheless, there CASF program includes various subaccounts that fund various types of projects, not just major infrastructure projects. For example, the Broadband Adoption Account funds grants to increase publicly available or after-school broadband access and digital inclusion, such as grants for digital literacy training programs and public education to communities with limited broadband adoption. While this bill does not explicitly require that every subaccount of the CASF be included in the model contract terms, the CWDB and its partners will have the discretion to include them. If the non-infrastructure grant accounts are included in the model contracts, this may lead to significant new labor requirements on relatively small grants that typically are in the low-hundreds of thousands of dollars.

In addition to the development of model contract terms, this bill also requires the CWDB to provide a recommendation on a memorandum of understanding (MOU) with the CPUC that would enable the development of high road job creation on broadband deployment projects. Unlike the drafting of the previous section of this bill, this portion of this bill does not specify that the broadband deployment projects be grant funded by state agencies. However, because the MOU would be between the CWDB and the CPUC, the MMBI would likely not be included in the MOU because that project is under the administration of CDT. This bill does not require or suggest an MOU between the CWDB and CDT.

1. The MMBI and CASF are covered by public works law. Under existing law, an infrastructure project grant from the CASF is expressly defined as public works. The MMBI would also appear to meet the definition of a public works project. According to the Department of Industrial Relations (DIR), anyone working on a public works project must be paid prevailing wages as determined by DIR. Projects of $30,000 or more must meet DIR's apprenticeship requirements. Failure to comply with public works requirements can result in civil penalties, criminal prosecution, or both. However, despite these baseline labor standards, supporters of this bill would argue that California is still falling behind the Biden Administration on achieving job quality standards for broadband projects.

For example, the federal requirements for the BEAD program provided guidance to states and local governments on items beyond prevailing wage such as project labor agreements, local and targeted hire, community benefits agreements, and other mechanisms that combine job quality with equity in access to quality jobs. Unlike the approach to administering CASF funds, the federal government has been clear that federal investments are meant to impact jobs, the economy, and poverty and that they expect states to include strong labor standards and equity when using these funds. Accordingly, California has proposed to adopt the high-road labor standards recommended for the BEAD program by the federal government. Additionally, submitted applications will be scored in part based on a project applicant’s commitment to strong labor standards. Specifically, California has proposed in the program rules currently under evaluation by the federal government that up to 20 points out of 100 could be awarded for labor standards. If the federal government approves California’s scoring criteria for the BEAD program, it will be the strongest labor standards criteria among all of the state’s broadband infrastructure deployment programs including CASF and the MMBI. The table below summarizes some of the differences between the last-mile programs in regards to labor standards.

This bill would arguably create the conditions to help fill the gap between the strong labor standards under BEAD and the other last-mile programs administered by the CPUC. The difference among the programs in regards to the labor standards, also raises a somewhat unrelated point about the differences among the programs generally. While the labor standards are clearly different, each program also has various other differences among them that project applicants also have to be mindful. While this bill is not attempting to create alignment among the programs generally, except for the labor standards, other legislation being considered by this committee raises issues with the differing low-cost or affordable plan offerings project applicants must commit to. In the future, the Legislature may wish to consider whether aligning each of the programs to have uniform standards across the CWDB might be reasonable.

1. Being mindful of delays. This bill requires the CWDB to take the actions specified in this bill by July 1, 2026, among which is to develop model contract terms. While developing model contracts terms of broadband deployment projects in order to work towards alignment among the programs is a reasonable approach to take. However, imposing those contract terms on existing applications or previously approved project may delay projects and the CPUC administrative process. Adding additional requirements on grantees or applicants may require the CPUC to re-open regulatory processes to update their rules, or risk federal funds that have established deadlines, such as projects funded by the Federal Funding Account. This is an especially concerning potential impact of this bill because the CPUC has already been much delayed in awarding grants to begin with. For example, out of the $2 billion dollars available for the Federal Funding Account, to date the CPUC has only issued final awards totaling $16.7 million worth of projects, with $88.5 million proposed to be awarded in the near future. This total funding is only about 5% of the total funding available for the Federal Funding Account.
2. Committee amendments. The committee may wish to consider the following amendments.
   1. Expressly include internet service providers in the group of relevant stakeholders the CWDB is required to convene.
   2. Prohibit the model contract terms developed by CWDB from being imposed on pending broadband projects or applications submitted before the creation of the model contract terms.
3. Related/similar legislation.
   1. SB 424 (Durazo) of this session would the CPUC to ensure that all broadband deployment grant awardees offer affordable home internet services to households participating in certain public assistance programs. That bill is pending in this committee.
   2. SB 1375 (Durazo) of this session would create the Equity, Climate Resilience, and Quality Jobs Fund to finance workforce training and standards to meet climate resiliency workforce needs. This measure would require MOUs between public agencies administering federal infrastructure funds to ensure investments using IIJA, CHIPS Act, and IRA funds have standards, and reporting to the California Workforce Development Board to perform analysis on equity, climate resilience, and quality jobs outcomes. This measure is currently pending in the Assembly Committee on Labor and Employment.
   3. SB 150 (Durazo) Chapter 61, Statutes of 2023, requires the Labor and Workforce Development Agency, the Government Operations Agency, and the Transportation Agency to convene stakeholders and develop recommendations for procurement models to ensure that federal IIJA, IRA, and CHIPS Act investments include enforceable commitments to job quality as a material term of our public contracts with measurable results to ensure equity.
   4. AB 662 (Boerner, 2023) would have established requirements for the administration of the BEAD program, and would have prohibited the CPUC from taking any actions to administer the BEAD program that are not specified in the bill. The bill was held in the Senate Appropriations Committee.
   5. SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.
   6. SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within the CASF to fund broadband infrastructure projects using one-time funds. The bill also required the CDT to oversee the construction of a state-owned, open access middle mile broadband network.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

Calbroadband

Analysis Prepared by: Emilio Perez / C. & C. / (916) 319-2637

Date of Hearing: June 19, 2024

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Liz Ortega, Chair

SBPCA Bill Id:SB 1460

Author:(Durazo) – As Amended Ver:April 25, 2024

SENATE VOTE: 30-9

SUBJECT: Broadband Labor Standards Act: broadband deployment projects: model contract terms: memorandum of understanding

SUMMARY: Requires, by January 1, 2026, the California Workforce Development Board (CWDB) to convene relevant stakeholders and state agencies, including the California Public Utilities Commission (CPUC) and the Department of Industrial Relations (DIR), to develop model contract terms for broadband deployment projects that are awarded state grants to increase the utilization of specified apprenticeships in the telecommunications sector.

Specifically, this bill:

1. Requires, by January 1, 2026, the CWDB to convene relevant stakeholders and state agencies, including, but not limited to, recognized labor unions, the CPUC, and the DIR, to do both of the following:
   1. Develop model contract terms for broadband deployment projects that are awarded grants by state agencies. The contract terms shall serve to increase the utilization of recognized labor unions’ apprenticeships in the telecommunications sector.
   2. Provide a recommendation on a memorandum of understanding between the CWDB and the CPUC that would enable the development of high road job creation on broadband deployment projects and expand access to those jobs for priority populations through high-quality education and training.
2. Requires the recommendation specified in 1b) above to ensure that the state has the workforce and industry-based training partnerships necessary to meet its broadband goals, while building pathways into the middle class and beyond for Californians who have been historically excluded from quality jobs and economic prosperity.
3. Requires, by July 1, 2026, the CWDB to do both of the following:
   1. Post the model contract terms on the CWDB’s internet website.
   2. Submit a report to the Legislature which includes both of the following:
      1. A summary of discussions with relevant stakeholders and state agencies to develop model contract terms.
      2. The recommendation from relevant stakeholders and state agencies on a memorandum of understanding pursuant to 1b) above.
4. States that the requirement for submitting a report is inoperative on July 1, 2030.

EXISTING LAW:

1. Establishes CWDB as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. Unemp. Ins. Code § 14010 et seq.
2. Establishes the California Broadband Council within state government for the purpose of promoting broadband deployment in unserved and underserved areas of the state and broadband adoption throughout the stae for the benefit of all Californians. Gov. Code § 8885.

FISCAL EFFECT: According to the Senate Appropriations Committee,

• Unknown, likely significant costs for CWDB to lead efforts to develop model contract terms, enter into an MOU, post contract terms online, and provide the report to the Legislature, among other things.

• The California Public Utilities Commission (CPUC) estimates ongoing costs of about $210,000 annually (ratepayer funds) to participate in a series of meetings to develop model contract terms, develop a MOU with CWDB that enables high road job creation on broadband projects, and support reporting to the Legislature. In addition, the CPUC would work within its current programs to implement and promote use of the model contract term(s).

• The California Department of Technology anticipates administrative costs related to this bill would be minor and absorbable.

• Unknown, potentially significant cost pressures (General Fund, Federal Fund, California Advanced Services Fund) on state broadband projects, contingent on the adoption of the model contract terms. Given the one-time nature of existing General and Federal Funds allocated for broadband projects, to the extent the model contract terms lead to higher project costs, it could result in fewer projects completed with existing funds. The CPUC also collects up to $150 million annually from a surcharge on telephone customers used to fund broadband project grant programs. Any projects funded by these grant programs could also be impacted.

COMMENTS: This bill is double referred to the Committee on Communications and Conveyance upon passage out of this Committee.

The Bipartisan Federal Infrastructure Deal (2021)

In 2021, Congress passed the Bipartisan Infrastructure Deal to ensure, among other things, that everyone in the United States has access to affordable, reliable high-speed internet. According to the White House press release on the deal, “by one definition, more than 30 million Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speeds – a particular problem in rural communities throughout the country.” The law allocated $40 billion dollars to the states to help them create the infrastructure to guarantee across the board connectivity. Futhermore, in California, the passage of SB 156 in the same year allocated $6 billion dollars for the explicit purpose of providing equitable access to high-speed broadband.

OMB Uniform Guidance

As communicated by the author to the committee, the federal Office of Management and Budget (OMB) recently revised its guidelines for Federal agencies on government-wide policies for the award and administration of Federal financial assistance.^[1] The 2024 revisions include a number of labor standards that can be used by states, such as California, in awarding and completing key infrastructure projects, including middle mile projects. The updated language includes critical labor provisions such as encouraging targeted hire policies, project labor agreements (PLAs), community benefit agreements, and job quality scoring. Projects that incorporate these provisions are likely to create quality jobs and uplift local workforces. For example, PLAs can be used as a tool for hiring workers from underserved communities into apprenticeships which lead to stable, good-paying jobs. Additionally, for bidders on federally funded projects, job quality scoring means that bidders that offer better compensation and benefits for workers get a scoring credit. Finally, requirements for target hiring can lead to employing workers from disadvantaged communities that are historically excluded from large-scale infrastructure projects.

According to the author, “SB 1460 will help establish standards for access to high paid jobs and safe working conditions in our broadband buildout.

California has the highest supplemental poverty rate of all fifty states. The Biden Administration has been clear that federal investments are meant to impact jobs, the economy, and poverty.

They expect states to include strong labor standards and equity when using federal funds. They have issued guidance on Community Benefits Agreements and PLAs and hosted webinars on engaging communities, advancing diversity, equity, inclusion, and accessibility. 

When California rolled out billions of taxpayer funded middle mile projects, labor standards requirements were not included in the statutory language.

The agencies involved in the middle mile did not include standards that support quality job creation and access to those jobs. Instead, they referenced the basic labor laws that are generally applicable to these types of projects.

These are workers who run the fiber optic lines, who splice the lines and connect the broadband network to homes. And, this too often gets overlooked, a major part of this need is for workers who can maintain and repair the fiber optic lines and network once there is connectivity. 

If we do not take steps now to get people into this workforce, we run the risk of the network not being built out on the front end, or not having enough workers to keep it running and repaired in the long run.  Without strong labor standards, we may end up with a network that is incomplete or cannot be kept running, and the workers who are available may come through contractors who are not providing the best health and safety training, and the technical training that is broadband specific.  

Experiences in other states shows us that these contractors, often from out of state, bring workers from out of state without adequate training that threatens the safety of workers and the quality of the broadband network itself. 

And there is nothing in place to require local hires, or to pull from high unemployment areas or a diverse demographic to not only build out broadband but to build out the middle class. 

We cannot repeat the mistakes that are leading to taxpayer-funded contracts going to companies outside of California at the expense of our local communities. We need local hires, and to pull from high unemployment areas to not only build out broadband but to build out the middle class.”

The author further states that the bill promotes equity solutions because “California has the highest supplemental poverty rate of all fifty states. About a third of our state’s 40 million people live in poverty or near-poverty, child poverty is rising, a million California workers are living in poverty, and 2.3 million are near poverty. Fewer than half of California workers consider themselves in a “good job.” The problem is not that people do not have jobs, or that our historic investments will not create jobs – more people need access to high paid jobs and quality training. Equity is at the center of these efforts to include high road labor standards and access to quality training programs.”

Arguments in Support

The Communications Workers of America, AFL-CIO, District 9, sponsor of the bill, states, “when the state rolled out its multi-billion dollar middle mile broadband funding and projects, mandatory high road labor standards were not included in the statutory language. None of the state agencies or departments involved in the middle mile put forth any rule making, recommendations, or other guidelines for high road labor standards, instead only referencing whatever basic labor laws generally applicable to these types of projects.

CWA, in its 2023 report "Broadband Investments that go the distance" (https://www.house.mn.gov/comm/docs/OWhW5UTgb0WEGwrXnPRmkQ.pdf) gives an overview of the importance of state and local governments adopting high road labor standards SB 1460 is the vehicle in California to accomplish this goal and presents an opportunity to ensure that our broadband networks not only connect individuals and communities throughout California, but also to ensure workers involved in the projects are provided proper safety training and pay, and that we bring in workers from across demographics, and from local areas, to ensure that California's investment is not just in technology, but also in the people and communities that are doing the work.”

Arguments in Opposition

CalBroadBand is opposed and states, “SB 1460 would require the California Workforce Development Board, by January 1, 2026, to convene the CPUC, recognized labor unions, the Department of Industrial Relations, and other “relevant stakeholders and state agencies,” to develop model contract terms for broadband deployment projects that are awarded grants by state agencies and provide a recommendation for a memorandum of understanding between the board and the CPUC to develop “high road” jobs on deployment projects that are accessible to priority populations through education and training.

With regards to “relevant stakeholders and state agencies,” the bill calls out labor unions as suggested “stakeholders” that the board and CPUC should convene but makes no mention of potential grantees as stakeholders. We would suggest that the bill is amended to include state broadband grantees as part of the list of stakeholders.”

Prior Legislation

SB 1325 (Durazo) of 2024 creates authorizing statutes for Best Value Procurement to empower cities, states, and public agencies to use our public dollars to create quality products and good jobs while advancing racial, gender, and climate equity. This bill is currently in the Assembly Committee on Local Government.

SB 1375 (Durazo) of 2024 creates the Equity, Climate Resilience, and Quality Jobs Fund to finance workforce training and standards to meet our climate resiliency workforce needs. Projects funded by these federal investments will prioritize good jobs and equity, making California competitive for more federal funding. This measure requires MOUs between public agencies administering federal infrastructure funds to ensure investments using IIJA, CHIPS Act, and IRA funds have standards, and reporting to the California Workforce Development Board to perform analysis on equity, climate resilience, and quality jobs outcomes. This measure is currently in the Assembly Committee on Labor and Employment.

SB 150 (Durazo) Chapter 61, Statutes of 2023, requires the Labor and Workforce Development Agency, the Government Operations Agency, and the Transportation Agency to convene stakeholders and develop recommendations for procurement models to ensure that federal IIJA, IRA, and CHIPS Act investments include enforceable commitments to job quality as a material term of our public contracts with measurable results to ensure equity. These entities must consult with the Civil Rights Department, other relevant state agencies, and a UC research institution in developing these recommendations that must be finalized by March 30, 2024.

SB 822 (Durazo) of 2023 would have established agreements between state agencies to advance high road procurement, contracting, and incentive programs. These agreements would have included policies and programs to create or support high-quality jobs in the energy, resources, communications, and transportation sectors and expand access to those jobs through high-quality education and training. Governor Newsom vetoed the measure.

SB 700 (Durazo) of 2022 would have supported quality jobs and training by: implementing a High Road Employment Program; requiring that state funded contracts meet California’s high road standard; strengthening California’s existing high road statute by adding definitions for “quality job” and “economic equity”; establishing a High Road compliance unit at the Labor and Workforce Development Agency with assistance from Government Operations Agency, dedicated to assisting the implementing departments and state agencies to promote compliance with California’s high road jobs, training and procurement policies; requiring departments/agencies to report to the Legislature their plan to incorporate high road employment requirements in their procurement processes; establishing the role of the California Workforce Development Board in high road procurement and contracting. This bill was held in Assembly Appropriations Committee.

SB 674 (Durazo) Chapter 875, Statutes of 2022, established the High Road Jobs in Transportation-Related Public Contracts and Grants Pilot Program to support the creation of equitable high-quality transportation and related manufacturing and infrastructure jobs. The bill required a covered public contract for the acquisition of zero-emission transit vehicles or electric vehicle supply equipment valued at $10 million or more, to incorporate high road job standards.

AB 2095 (Kalra) of 2022 requires employers with 1,000 or more employees, on or before March 31, 2024, to report worker-related statistics on an annual basis to the Labor and Workforce Development Agency (LWDA) and requires the LWDA to publish on its internet website these statistics. The bill was held by the Assembly Appropriations Committee.

AB 680 (Burke) Chapter 746, Statutes of 2021, establishes the California Jobs Plan Act of 2021 which requires the California Air Resources Board (CARB) to work with the 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 meet fair and responsible employer standards and provide inclusive procurement policies.

AB 794 (Carrillo) Chapter 748, Statutes of 2021, attaches labor standards to eligibility for various clean vehicle incentive programs administered by the CARB for fleet purchasers of new drayage or short-haul trucks.

AB 398 (Eduardo Garcia) Chapter 135, Statutes of 2017, directed the CWDB to assess the need for increased education, job training, and workforce development resources to help workers and communities’ transition to a low carbon economy. Requires CWDB to submit a report to the Legislature by January 1, 2019, on the need for increased education, career technical education, job training, and workforce development resources or capacity to help industry, workers, and communities’ transition to economic and labor-market changes related to specified statewide greenhouse gas emissions reduction goals.

REGISTERED SUPPORT / OPPOSITION:

Support

Communications Workers of America, District 9 (Sponsor)
California Labor Federation

Opposition

CalBroadband
United States Telecom Association - the Broadband Association

Analysis Prepared by: Megan Lane / L. & E. /

1. Title 2 of the Code of Federal Regulations (CFR), Subtitle A, Chapters I and II. ↑

 THIRD READING  

Bill No: SB 1460

Author: Durazo (D)

Amended: 4/25/24

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 14-4, 4/16/24

AYES: Bradford, Ashby, Becker, Caballero, Dodd, Durazo, Eggman, Gonzalez, Limón, Min, Newman, Rubio, Skinner, Stern

NOES: Dahle, Grove, Seyarto, Wilk

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 4-1, 4/24/24

AYES: Smallwood-Cuevas, Cortese, Durazo, Laird

NOES: Wilk

SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/16/24

AYES: Caballero, Ashby, Becker, Bradford, Wahab

NOES: Jones, Seyarto

SUBJECT: Broadband Labor Standards Act: broadband deployment projects: model contract terms: memorandum of understanding

SOURCE: Communication Workers of America, District 9

DIGEST:

Requires the California Workforce Development Board (CWDB) to convene relevant agencies and stakeholders to develop model contract provisions for the use of apprenticeships in the telecommunications sector. Additionally, this bill requires CWDB to publish the resulting terms on its website and submit a report to the Legislature.

ANALYSIS:

Existing law:

1. Establishes the California Advanced Services Fund (CASF) for the purposes of providing funding for broadband infrastructure to unserved households. Existing law specifies that an “unserved household” is a home lacking broadband internet at speeds of at least 25 megabits per second (Mbps) downstream and 3 Mbps upstream. Existing law also specifies that all CASF-funded infrastructure must provide broadband internet at speeds of at least 100/20 Mbps. (Public Utilities Code §281)
2. Establishes various accounts within the CASF to fund specific broadband adoption and deployment. These funds include the Federal Funding Account (FFA), which is established to deploy broadband infrastructure to unserved and underserved communities. Existing law specifies how monies in the FFA must be allocated to rural and urban communities for broadband deployment. (Public Utilities Code §281)

This bill:

1. Requires the CWDB to convene relevant stakeholders, including recognized labor unions, the California Public Utilities Commission (CPUC), and the Department of Industrial relations by January 1, 2026, to do the following:
2. Develop model contract terms for broadband deployment projects awarded grants by state agencies. This bill specifies that these terms must be aimed at increasing the utilization of recognized labor unions’ apprenticeships in the telecommunications sector.
3. Provide a recommendation regarding the establishment of a memorandum of understanding (MOU) between the CWDB and the CPUC that would facilitate the development of high-road job creation on broadband projects and expand access to those jobs for priority populations through high quality education and training. This bill specifies that this recommendation must ensure that the state has the workforce and industry-based training partnerships necessary to meet its broadband goals while building pathways to quality jobs for historically excluded Californians.
4. Requires the CWDB to submit a report to the Legislature by July 1, 2026, regarding stakeholder engagements and the model contract terms developed pursuant to this bill. This bill also requires the CWDB to post the model terms on its website by July 1, 2026.
5. Sunsets the bill on July 1, 2030.

Background

1. Prior studies have recommended greater collaboration between workforce and climate agencies for high-road job development. In 2020, the CWDB released "Putting California on the High Road: A Jobs and Climate Action Plan for 2030” pursuant to AB 398 (E. Garcia, Chapter 135, Statutes of 2017). This report was intended to provide recommendations for integrating economic and workforce development into major climate programs to help achieve climate goals while supporting high-road job creation. The report suggests CWDB develop a technical assistance team to support agencies responsible for implementing climate policy. The report discovered that agencies administering climate investments and policies have limited experience and training in assessing when, where, and how to incorporate the tools and approaches necessary to create high quality jobs, prepare workers with appropriate skills, expand career opportunities for workers from disadvantaged communities, and assist those whose jobs may be at risk. While CWDB’s recognized certain telecommunications jobs as key occupations related to energy and climate investments, the report did not discuss the telecommunications sector or how its recommendations could be extended to investments in broadband deployment.
2. State broadband investments have varying labor requirements, across multiple programs and agencies. This bill aims to establish a set of model terms for labor standards that agencies administering broadband deployment funds may use to incorporate high-road job development into broadband programs. Historically, the state has not had substantial investments in broadband projects; however, recent one-time federal funding allocations have substantially increased the amount of funds available for broadband infrastructure projects through state agencies.

In 2021, California authorized historic new investments in broadband infrastructure across multiple programs. These investments included the passage of a package of bills that authorized the California Department of Technology (CDT) to create a new state-owned middle-mile network, the creation of new funding at the CPUC for last-mile broadband deployment using federal funds, and the extension of the existing California Advanced Services Fund (CASF), which provides up to $150 million each year in grants for broadband infrastructure and adoption projects. While a substantial portion of CDT’s funding is used for leased, purchased, and jointly-built infrastructure with certain private partners, middle-mile construction contracted through the California Department of Transportation (CalTrans) must comply with labor requirements in CalTrans job order contracting process. Projects funded through the CASF, including federal and state surcharge funds are considered “public works” for which prevailing wage requirements apply. Existing requirements may ensure that payment for broadband deployment projects complies with state wage requirements; however requirements regarding the use of apprenticed workers, restrictions on contractors with demonstrated safety issues, and other, more extensive labor requirements are not consistent across state-funded broadband projects.

To the extent that California develops new broadband projects or receives new federal funding, this bill may provide recommendations for setting new labor standards for new funding opportunities. However, without certainty about the statutory requirements associated with those funds, it is unclear whether model contract terms can be applied uniformly to any new source of broadband infrastructure funding.

1. The CPUC has adopted high labor standards for the largest portion of California’s forthcoming broadband funding. Pursuant to the federal Infrastructure Investment and Jobs Act (IIJA), California will receive approximately $1.8 billion in federal funds to deploy last mile broadband infrastructure under the Broadband Equity, Access and Deployment (BEAD) program. Rules for this program are established by the National Telecommunications and Information Administration (NTIA). NTIA has issued guidance to states regarding labor requirements for the BEAD program. This guidance specified a series of baseline requirements that every state must adopt; however, it also provided some discretion to states when adopting requirements above the baseline. NTIA’s guidance set baseline labor requirements for all BEAD applicants, and it also encouraged states to adopt program rules that would incentivize labor benefits above NTIA’s baseline requirements. As part of the CPUC proceeding (R. 23-02-016) to adopt requirements for implementing the BEAD program, the Communications Workers of America (CWA) and a coalition of labor unions and organizations filed comments in May 2023, emphasizing the need for BEAD application criteria that achieved the following goals:

• Prioritizing labor factors beyond those required by NTIA, including a directly employed workforce, in-house training, a locally-based workforce, and quality wages and benefits.
• Providing a substantial point allocation for labor factors in application scoring.
• Collecting and publishing information regarding subgrantees workforce plans, including information about subcontracting, job quality, training and safety, and local hiring.

On November 7, 2023, the CPUC issued a staff proposal for BEAD implementation rules, which adopted both mandatory labor requirements and established labor criteria for scoring applications. All applicants must certify that proposed contractors and subcontractors have certain labor practices in place, including wage scales for each class of employees. Other requirements in the staff proposal include requiring applicants to discuss workforce plans for subgrantees, plans for local hires, policies for public disclosure of workforce plans, plans for targeted hires, job quality, job safety, apprenticeship utilization, and plans to use a directly-employed workforce, in-house training, and a locally-based workforce. In addition these requirements, the CPUC also allocated a substantial amounts of points in the applications scoring criteria to labor standards. Under the staff proposals, the CPUC will award projects up to a total of 100 points across all scoring criteria. Labor commitments comprise 20 of those 100 points. Below is a description from the staff proposal regarding the point allocation for labor commitments:

Labor Standards: up to 20 points Up to 20 points will be awarded, with 10 points based on (1) a demonstrated history of compliance with federal labor laws; (2) demonstrated commitments to future compliance with federal labor laws; and (3) the quality and contents of labor practice-related items submitted during the Application Phase. Projects on Tribal lands will receive the 10 points for labor standards as long as the project complies with Tribal and applicable federal law concerning labor standards. Additionally, up to 10 points will be awarded to all projects on the basis of workforce capacity building and development commitments, especially those prioritizing equitable workforce development. New entrants without a lengthy record of labor and employment law compliance will receive points in this category based on specific, concrete commitments to strong labor and employment standards and protections and equitable workforce development commitments going forward. Up to 10 points will be deducted for official labor relations complaints or violations in the five years preceding the date of application.

On November 27, 2023, CWA and a coalition of labor organizations filed comments on the staff proposal. The comments were largely supportive, but recommended a higher number of applications scoring points for labor considerations, more detail on how each of those points would be allocated, and more detail about how certain enforcement measures will be conducted. For example, the labor coalition largely supported CPUC’s proposed enforcement measures, like site visits; however, the coalition recommended that these site visits be periodic and random, but with specific engineering information provided in advance for verification at the site. Regarding the CPUC’s proposals for enforcing workforce commitments, the labor coalition’s comments state:

“The Initial Proposal states that successful applicants will be required to submit ongoing workforce reports and that these reports will be legally binding and publicly available (p. 62-63). Respondents commend the CPUC for the model practices outlined in this section.”

Related/Prior Legislation

AB 662 (Boerner, 2023) would have established requirements for the administration of the BEAD program, and would have prohibited the CPUC from taking any actions to administer the BEAD program that are not specified in the bill. The bill was held in the Senate Appropriations Committee.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within the CASF to fund broadband infrastructure projects using one-time funds. The bill also required the CDT to oversee the construction of a state-owned, open access middle mile broadband network.

AB 398 (E. Garcia, Chapter 135, Statutes of 2017) extended and modified the authority of the California Air Resources Board (CARB) to administer the Cap-and-Trade program. Among other provisions, the bill also required the CWDB to submit a report to the Legislature on strategies to help workers and communities transition to clean economic opportunities and labor markets in alignment with the state’s climate goals.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• Unknown, likely significant costs for CWDB to lead efforts to develop model contract terms, enter into an MOU, post contract terms online, and provide the report to the Legislature, among other things.
• The California Public Utilities Commission (CPUC) estimates ongoing costs of about $210,000 annually (ratepayer funds) to participate in a series of meetings to develop model contract terms, develop a MOU with CWDB that enables high road job creation on broadband projects, and support reporting to the Legislature. In addition, the CPUC would work within its current programs to implement and promote use of the model contract term(s).
• The California Department of Technology anticipates administrative costs related to this bill would be minor and absorbable.
• Unknown, potentially significant cost pressures (General Fund, Federal Fund, California Advanced Services Fund) on state broadband projects, contingent on the adoption of the model contract terms. Given the one-time nature of existing General and Federal Funds allocated for broadband projects, to the extent the model contract terms lead to higher project costs, it could result in fewer projects completed with existing funds. The CPUC also collects up to $150 million annually from a surcharge on telephone customers used to fund broadband project grant programs. Any projects funded by these grant programs could also be impacted.

SUPPORT: (Verified 5/15/24)

Communication Workers of America, District 9, (Source)

California Labor Federation

OPPOSITION: (Verified 5/15/24)

California Broadband & Video Association
USTelecom - the Broadband Association

ARGUMENTS IN SUPPORT: According to the author:

I have worked my entire life, as a migrant farmworker and in my career, to make California more equitable. Now – in the midst of a seismic change in our economy – the greatest transformation since the Industrial Revolution – we cannot make the same mistakes of the past. A commitment to climate and digital equity means a commitment to workers.

As our state receives once-in-a-generation funding from the federal government and makes historical investments of our own, we continue to have the highest supplemental poverty rate of any state in our country. We must go beyond “job creation” – this is about access to good jobs.

As the largest recipient of federal infrastructure funds complementing what our state and local governments are spending on closing the digital divide, transportation and climate adaptation, California can lead the way for people building these projects to have access to quality jobs.

ARGUMENTS IN OPPOSITION: In opposition, a coalition of telecommunications organizations, including USTelecom – The Broadband Association and the California Broadband and Video Association (CalBroadband) state:

The CPUC submitted Volume I and Volume II of the BEAD Initial Proposal to NTIA in December of 2023. NTIA is currently reviewing the Volumes to ensure compliance with the requirements of the Notice of Funding Opportunity and NTIA program guidance.

This bill adds additional requirements on grantees that would require re-opening of the BEAD proposals that have already been sent to NTIA. This would upend California’s BEAD process with NTIA and create uncertainty for the $1.86 billion in federal funds on the table. There is too much at stake and the funding is critical to reach the last of the unserved areas of California, we cannot put that funding at risk. Thus, we must respectfully oppose SB 1460 (Durazo).

Prepared by: Sarah Smith / E., U. & C. / (916) 651-4107

5/17/24 17:19:31

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

SB 1460 (Durazo) - Broadband Labor Standards Act: broadband deployment projects: model contract terms: memorandum of understanding

Bill Summary:

This bill would enact the Broadband Labor Standards Act and require the California Workforce Development Board (CWDB) to convene relevant agencies and stakeholders to develop model contract provisions for the use of apprenticeships in the telecommunications sector. Additionally, this bill requires CWDB to publish the resulting terms on its website and submit a report to the legislature.

Fiscal Impact:

• Unknown, likely significant costs for CWDB to lead efforts to develop model contract terms, enter into an MOU, post contract terms online, and provide the report to the Legislature, among other things.
• The California Public Utilities Commission (CPUC) estimates ongoing costs of about $210,000 annually (ratepayer funds) to participate in a series of meetings to develop model contract terms, develop a MOU with CWDB that enables high road job creation on broadband projects, and support reporting to the Legislature. In addition, the CPUC would work within its current programs to implement and promote use of the model contract term(s).
• The California Department of Technology (CDT) anticipates administrative costs related to this bill would be minor and absorbable.
• Unknown, potentially significant cost pressures (General Fund, Federal Fund, California Advanced Services Fund) on state broadband projects, contingent on the adoption of the model contract terms. Given the one-time nature of existing General and Federal Funds allocated for broadband projects, to the extent the model contract terms lead to higher project costs, it could result in fewer projects completed with existing funds. The CPUC also collects up to $150 million annually from a surcharge on telephone customers used to fund broadband project grant programs. Any projects funded by these grant programs could also be impacted.

Background:

In June 2020, CWDB released "Putting California on the High Road: A Jobs and Climate Action Plan for 2030" as a vision for integrating economic and workforce development into major climate policies and programs to help achieve California's primary climate goals. The report suggests CWDB develop a technical assistance team to support agencies responsible for implementing climate policy as they strive to incorporate high road workforce interventions. The report discovered that agencies administering climate investments and policies have limited experience and training in assessing when, where, and how to incorporate the tools and approaches necessary to create high quality jobs, prepare workers with appropriate skills, expand career opportunities for workers from disadvantaged communities, and assist those whose jobs may be at risk.

According to the Senate Committee on Labor, Public Employment and Retirement, a state agency MOU between CWDB and relevant agencies could allow other agencies to draw upon the expertise of CWDB and ensure the state has the workforce and industry-based training partnerships necessary to also meet California’s broadband connectivity goals while building pathways into the middle class and beyond for Californians who have been historically excluded from opportunities.

Proposed Law:

This bill would enact the Broadband Labor Standards Act and would:

1. Require, by January 1, 2026, CWDB to convene relevant stakeholders and agencies, including but not limited to recognized employee representatives, CPUC, and DIR to:
   1. Develop model contract terms that would increase the utilization of recognized employee representative apprenticeships in the telecommunications sector, for broadband deployment projects awarded grants administered by state agencies.
   2. Ensure the state has the workforce and industry-based training partnerships necessary to meet its broadband goals, while building pathways into the middle class and beyond for Californians who have been historically excluded from quality jobs and economic prosperity. In doing so, the CPUC and CWDB shall provide a recommendation on how an MOU between the CPUC and CWDB would enable the development of high road job creation on broadband deployment projects and expand access to those jobs for priority populations through high-quality education and training.
2. Require, by July 1, 2026, CWDB to:
   1. Publish the contract terms developed by the stakeholders on its internet website.
   2. Submit a report to the Legislature summarizing the stakeholder discussions to develop model contract terms and the recommendations from the stakeholders on an MOU.

Related Legislation:

SB 1325 (Durazo, 2024) would authorize Best Value Procurement for cities, states, and public agencies to use public dollars to create quality products and good jobs while advancing racial, gender, and climate equity.

SB 1375 (Durazo, 2024) would create the Equity, Climate Resilience, and Quality Jobs Fund to finance workforce training and standards to meet our climate resiliency workforce needs. Projects funded by these federal investments will prioritize good jobs and equity, making California competitive for more federal funding. This measure would require MOUs between public agencies administering federal infrastructure funds to ensure investments using IIJA, CHIPS Act, and IRA funds have standards, and reporting to the California Workforce Development Board to perform analysis on equity, climate resilience, and quality jobs outcomes.

AB 662 (Boerner, 2023) would have established requirements for the administration of the BEAD program, and would have prohibited the CPUC from taking any actions to administer the BEAD program that are not specified in the bill. The bill was held in the Senate Committee on Appropriations.

SB 150 (Durazo et al., Chapter 61, Statutes of 2023) required the Labor and Workforce Development Agency, the Government Operations Agency, and the Transportation Agency to convene stakeholders and develop recommendations for procurement models to ensure that federal IIJA, IRA, and CHIPS Act investments include enforceable commitments to job quality as a material term of our public contracts with measurable results to ensure equity. This bill also required the entities to consult with the Civil Rights Department, other relevant state agencies, and a UC research institution in developing the recommendations.

SB 822 (Durazo, 2023) would have established agreements between state agencies to advance high road procurement, contracting, and incentive programs. These agreements would have included policies and programs to create or support high-quality jobs in the energy, resources, communications, and transportation sectors and expand access to those jobs through high-quality education and training. In his veto message, Governor Newsom stated “…I have signed several bills that ensure public contracting dollars are also investing in human infrastructure, including SB 150 that requires the Labor and Workforce Development Agency, Government Operations Agency, and the State Transportation Agency to convene relevant stakeholders and draft recommendations to ensure that investments maximize benefits to marginalized and disadvantaged communities. The recommendations are due by March 30, 2024.”

SB 674 (Durazo, Chapter 875, Statutes of 2022) established the High Road Jobs in Transportation Related Public Contracts and Grants Pilot Program to support the creation of equitable high-quality transportation and related manufacturing and infrastructure jobs. SB 674 required a covered public contract for the acquisition of zero-emission transit vehicles or electric vehicle supply equipment valued at $10 million or more, to incorporate high road job standards.

AB 2095 (Kalra, 2022) would have required employers with 1,000 or more employees to report worker-related statistics on an annual basis to the Labor and Workforce Development Agency (LWDA) and would have required LWDA to publish the statistics on its internet website. The bill was held by the Assembly Appropriations Committee.

AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) was identical to AB 14.

AB 680 (Burke, Chapter 746, Statutes of 2021) established the California Jobs Plan Act of 2021 which requires the California Air Resources Board (CARB) to work with the 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 meet fair and responsible employer standards and provide inclusive procurement policies.

AB 794 (Carrillo, Chapter 748, Statutes of 2021) attached labor standards to eligibility for various clean vehicle incentive programs administered by CARB for fleet purchasers of new drayage or short haul trucks.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act and established the FFA within the CASF to fund broadband infrastructure projects using one time funds. This bill also required Department of Transportation to oversee the construction of a state-owned, open access middle mile broadband network.

AB 398 (E. Garcia, Chapter 135, Statutes of 2017) directed CWDB to assess the need for increased education, job training, and workforce development resources to help workers and communities transition to a low carbon economy. This bill also required CWDB to submit a report to the Legislature by January 1, 2019, on the need for increased education, career technical education, job training, and workforce development resources or capacity to help industry, workers, and communities’ transition to economic and labor market changes related to specified statewide greenhouse gas emissions reduction goals.

-- END --

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2023 - 2024 Regular

Bill No: SB 1460 Hearing Date: April 24, 2024

SUBJECT: Broadband Labor Standards Act: broadband deployment projects: model contract terms: memorandum of understanding

KEY ISSUE

This bill, as proposed to be amended, enacts the Broadband Labor Standards Act and requires the California Workforce Development Board (CWDB) to convene relevant agencies and stakeholders to develop model contract provisions for the use of apprenticeships in the telecommunications sector. Additionally, this bill requires CWDB to publish the resulting terms on its website and submit a report to the legislature.

ANALYSIS

Existing law:

1. Establishes the California Advanced Services Fund (CASF) for the purposes of providing funding for broadband infrastructure to unserved households. Existing law specifies that an “unserved household” is a home lacking broadband internet at speeds of at least 25 megabits per second (Mbps) downstream and 3 Mbps upstream. Existing law also specifies that all CASF-funded infrastructure must provide broadband internet at speeds of at least 100/20 Mbps. (Public Utilities Code §281)
   
2. Establishes various accounts within the CASF to fund specific broadband adoption and deployment. These funds include the Federal Funding Account (FFA), which was established to deploy broadband infrastructure to unserved and underserved communities. Existing law specifies how monies in the FFA must be allocated to rural and urban communities for broadband deployment. (Public Utilities Code §281)
   
3. Establishes CWDB and charges it with oversight and improvement of California’s workforce system. The CWDB advances pathways to quality, high road jobs, and equity through workforce development strategies, including: the creation of a statewide strategic workforce plan; collaboration with local workforce development boards, employers, workers, and stakeholders; implementation of initiatives; and evaluation of program quality. The CWDB recognizes that a prosperous economy is one where disadvantaged Californians, who face barriers to employment, have pathways to quality jobs in key industries. (Unemployment Insurance Code §14010)
   
4. Provides that an apprenticeship program may be administered by a joint apprenticeship committee, unilateral management, or labor apprenticeship committee, or an individual employer. Programs may be approved by the chief in any trade in the state or in a city or trade area, whenever the apprentice training needs justify the establishment. Where a collective bargaining agreement exists, a program shall be jointly sponsored unless either party to the agreement waives its right to representation in writing. Joint apprenticeship committees shall be composed of an equal number of employer and employee representatives. (Labor Code §3075)
   
5. Authorizes public agencies to enter into, or require contractors to enter into, a project labor agreement for a construction project that does the following:
   1. Prohibits discrimination based on race, national origin, religion, sex, sexual orientation, political affiliation, or membership in a labor organization in hiring and dispatching workers for the project.
   2. Permits all qualified contractors and subcontractors to bid for and be awarded work on the project without regard to whether they are otherwise parties to collective bargaining agreements.
   3. Contains an agreed-upon protocol concerning drug testing for workers who will be employed on the project.
   4. Contains guarantees against work stoppages, strikes, lockouts, and similar disruptions of the project.
   5. Provides that disputes arising from the agreement shall be resolved by a neutral arbitrator. (Public Contract Code §2500)
      

This bill, as proposed to be amended:

1. Requires, by January 1, 2026, CWDB to convene relevant stakeholders and agencies, including but not limited to recognized employee representatives, CPUC, and DIR to:
   
   1. Develop model contract terms that would increase the utilization of recognized employee representative apprenticeships in the telecommunications sector, for broadband deployment projects awarded grants administered by state agencies.
   2. Ensure the state has the workforce and industry-based training partnerships necessary to meet its broadband goals, while building pathways into the middle class and beyond for Californians who have been historically excluded from quality jobs and economic prosperity. In doing so, the CPUC and CWDB shall provide a recommendation on how an MOU between the CPUC and CWDB would enable the development of high road job creation on broadband deployment projects and expand access to those jobs for priority populations through high-quality education and training.
      
2. Requires, by July 1, 2026, CWDB to:
   
   1. Publish the contract terms developed by the stakeholders on its internet website.
   2. Submit a report to the Legislature summarizing the stakeholder discussions to develop model contract terms and the recommendations from the stakeholders on an MOU.
      

COMMENTS

1. Background

In June 2020, CWDB released "Putting California on the High Road: A Jobs and Climate Action Plan for 2030" as a vision for integrating economic and workforce development into major climate policies and programs to help achieve California's primary climate goals. The report suggests CWDB develop a technical assistance team to support agencies responsible for implementing climate policy as they strive to incorporate high road workforce interventions. The report discovered that agencies administering climate investments and policies have limited experience and training in assessing when, where, and how to incorporate the tools and approaches necessary to create high quality jobs, prepare workers with appropriate skills, expand career opportunities for workers from disadvantaged communities, and assist those whose jobs may be at risk.

A state agency MOU between CWDB and relevant agencies could allow other agencies to draw upon the expertise of CWDB and ensure the state has the workforce and industry-based training partnerships necessary to also meet California’s broadband connectivity goals while building pathways into the middle class and beyond for Californians who have been historically excluded from opportunities.

Amendments

This bill was heard in the Senate Committee on Energy, Utilities and Communications (EUC) on April 16, 2024, with a motion of do pass; however, EUC and the author have agreed to the proposed amendments contained in RN 24 13332 as a condition of passage. Due to the close proximity of hearings, this committee would need to adopt the EUC amendments.

2. Need for this bill?

The author states “Fewer than half of California workers consider themselves in a ‘good job.’ We continue to have the highest supplemental poverty rate of any state, child poverty is increasing, a million California workers are living in poverty, and 2.3 million are near poverty.

California has not yet adopted labor standards on the money we have already received from the federal government or our investment of state dollars. Studies from other states have shown that without clear labor standards workers often receive little or no safety training, are subcontracted from other states, and are not provided the proper preparation for the work. This can lead to workplace injuries and sub-quality work.

The construction sector has a clear set of standards that can be used to ensure job quality and community benefits for public investments. We need a clear policy and administrative framework to apply to non-construction sectors.”

3. Proponent Arguments

According to the Communications Workers of America (CWA), “Across the country the federal government, states, local governments and community partners are increasing investment into broadband infrastructure buildout and maintenance. In the past few years the federal government has allocated billions of dollars across the United States to help with publicly funded buildout projects. Included in the federal funding guidelines are mandates for states to engage with labor unions and worker representatives. However, California lacks an established outline of high road labor standards designed to apply to broadband projects. As a result, these projects may go forward with minimal and non-specific labor standards; a missed opportunity to establish California as a leader to ensure safe and effective broadband buildout. Absent statutorily mandated labor standards, these publicly funded project will rely on minimal requirements for workers, and contracted workers.

For example, the California Public Utilities Commission is in the midst of a major funding process for ‘last-mile’ broadband network buildout. However, neither the CPUC, nor any other state entity is required to include, or has voluntarily adopted high road labor standards. Instead, CWA District 9 and allies have had to become an official party to the CPUC rule making and submitted comments to hopefully ensure adoption of some high road labor standards. CWA D9 believes that high road labor standards should be included automatically and not be left up to the discretion of an already complicated funding process.

Furthermore, when the state rolled out its multi-billion dollar middle mile broadband funding and projects, mandatory high road labor standards were not included in the statutory language. None of the state agencies or departments involved in the middle mile put forth any rule making, recommendations, or other guidelines for high road labor standards, instead only referencing whatever basic labor laws generally applicable to these types of projects. This lack of comprehensive high road labor standard plan jeopardizes the health and safety of workers brought in to build out the middle mile network, it also brings into question the quality of work that will be attained. There are examples from other states of contractors using workers who were not provided a high level of training or health and safety courses to ensure best outcomes.

CWA, in its 2023 report ‘Broadband Investments that go the distance’ (https://www.house.mn.gov/comm/docs/OWhW5UTgb0WEGwrXnPRmkQ.pdf) gives an overview of the importance of state and local governments adopting high road labor standards SB 1460 is the vehicle in California to accomplish this goal and presents an opportunity to ensure that our broadband networks not only connect individuals and communities throughout California, but also to ensure workers involved in the projects are provided proper safety training and pay, and that we bring in workers from across demographics, and from local areas, to ensure that California's investment is not just in technology, but also in the people and communities that are doing the work.”

4. Opponent Arguments

USTelecom – The Broadband Association and the California Broadband and Video Association state “SB 1460 imposes new requirements on broadband infrastructure and deployment projects that are federally funded on or after July 1, 2025. Given this deadline, the only broadband projects that would be subject to this requirement are projects within the Broadband, Equity, Access and Deployment (BEAD) Program and the California Department of Technology’s state middle mile program.

On July 17th, 2023, the CPUC issued a ruling requesting comments on the draft Five-Year Action Plan. The CPUC submitted a final Five-Year Action Plan to the National Telecommunications and Information Administration (NTIA) on August 27, 2023. NTIA is also the final approver of all projects and plans submitted by all states in the nation for BEAD funding. On November 7, 2023, the CPUC released draft versions of Volume 1 and Volume 2 of its Initial Proposal. Formal opening comments were due November 27th and reply comments were due December 7th. Any suggested requirements for grantees to the BEAD Program should have been requested within this detailed process that occurred last year.

The CPUC submitted Volume I and Volume II of the BEAD Initial Proposal to NTIA in December of 2023. NTIA is currently reviewing the Volumes to ensure compliance with the requirements of the Notice of Funding Opportunity and NTIA program guidance.”

5. Double Referral

The Senate Committee on Rules also referred this bill to the Senate Committee on Energy, Utilities, and Communications.

6. Prior Legislation

SB 1325 (Durazo, 2024) would authorize Best Value Procurement for cities, states, and public agencies to use public dollars to create quality products and good jobs while advancing racial, gender, and climate equity.

SB 1375 (Durazo, 2024) would create the Equity, Climate Resilience, and Quality Jobs Fund to finance workforce training and standards to meet our climate resiliency workforce needs. Projects funded by these federal investments will prioritize good jobs and equity, making California competitive for more federal funding. This measure would require MOUs between public agencies administering federal infrastructure funds to ensure investments using IIJA, CHIPS Act, and IRA funds have standards, and reporting to the California Workforce Development Board to perform analysis on equity, climate resilience, and quality jobs outcomes.

AB 662 (Boerner, 2023) would have established requirements for the administration of the BEAD program, and would have prohibited the CPUC from taking any actions to administer the BEAD program that are not specified in the bill. The bill was held in the Senate Committee on Appropriations.

SB 150 (Durazo et al., Chapter 61, Statutes of 2023) required the Labor and Workforce Development Agency, the Government Operations Agency, and the Transportation Agency to convene stakeholders and develop recommendations for procurement models to ensure that federal IIJA, IRA, and CHIPS Act investments include enforceable commitments to job quality as a material term of our public contracts with measurable results to ensure equity. This bill also required the entities to consult with the Civil Rights Department, other relevant state agencies, and a UC research institution in developing the recommendations.

SB 822 (Durazo, 2023) would have established agreements between state agencies to advance high road procurement, contracting, and incentive programs. These agreements would have included policies and programs to create or support high-quality jobs in the energy, resources, communications, and transportation sectors and expand access to those jobs through high-quality education and training. In his veto message, Governor Newsom stated  “…I have signed several bills that ensure public contracting dollars are also investing in human infrastructure, including SB 150 that requires the Labor and Workforce Development Agency, Government Operations Agency, and the State Transportation Agency to convene relevant stakeholders and draft recommendations to ensure that investments maximize benefits to marginalized and disadvantaged communities. The recommendations are due by March 30, 2024.”

SB 674 (Durazo, Chapter 875, Statutes of 2022) established the High Road Jobs in Transportation Related Public Contracts and Grants Pilot Program to support the creation of equitable high-quality transportation and related manufacturing and infrastructure jobs. SB 674 required a covered public contract for the acquisition of zero-emission transit vehicles or electric vehicle supply equipment valued at $10 million or more, to incorporate high road job standards.

AB 2095 (Kalra, 2022) would have required employers with 1,000 or more employees to report worker-related statistics on an annual basis to the Labor and Workforce Development Agency (LWDA) and would have required LWDA to publish the statistics on its internet website. The bill was held by the Assembly Appropriations Committee.

AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) was identical to AB 14.

AB 680 (Burke, Chapter 746, Statutes of 2021) established the California Jobs Plan Act of 2021 which requires the California Air Resources Board (CARB) to work with the 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 meet fair and responsible employer standards and provide inclusive procurement policies.

AB 794 (Carrillo, Chapter 748, Statutes of 2021) attached labor standards to eligibility for various clean vehicle incentive programs administered by CARB for fleet purchasers of new drayage or short haul trucks.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act and established the FFA within the CASF to fund broadband infrastructure projects using one time funds. This bill also required Department of Transportation to oversee the construction of a state-owned, open access middle mile broadband network.

AB 398 (E. Garcia, Chapter 135, Statutes of 2017) directed CWDB to assess the need for increased education, job training, and workforce development resources to help workers and communities transition to a low carbon economy. This bill also required CWDB to submit a report to the Legislature by January 1, 2019, on the need for increased education, career technical education, job training, and workforce development resources or capacity to help industry, workers, and communities’ transition to economic and labor market changes related to specified statewide greenhouse gas emissions reduction goals.

SUPPORT

Communication Workers of America (Sponsor)

California Labor Federation

OPPOSITION

California Broadband and Video Association

USTelecom – The Broadband Association

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SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: Hearing Date: 4/16/2024

SUBJECT:

DIGEST: This bill requires the California Public Utilities Commission (CPUC) to adopt specified labor contract provisions that must be included in every contract and subcontract for broadband deployment under the Broadband Equity Access and Deployment (BEAD) program. This bill also requires the CPUC and other state agencies to consult with recognized labor unions before adopting these contract requirements and submit a report to the Legislature summarizing these consultations.

ANALYSIS:

Existing law:

1. Establishes the California Advanced Services Fund (CASF) for the purposes of providing funding for broadband infrastructure to unserved households. Existing law specifies that an “unserved household” is a home lacking broadband internet at speeds of at least 25 megabits per second (Mbps) downstream and 3 Mbps upstream. Existing law also specifies that all CASF-funded infrastructure must provide broadband internet at speeds of at least 100/20 Mbps. (Public Utilities Code §281)
2. Establishes various accounts within the CASF to fund specific broadband adoption and deployment. These funds include the Federal Funding Account (FFA), which is established to deploy broadband infrastructure to unserved and underserved communities. Existing law specifies how monies in the FFA must be allocated to rural and urban communities for broadband deployment. (Public Utilities Code §281)

This bill:

1. Defines a “broadband project” as a middle-mile, last-mile, or other broadband project.
2. Defines a “contract” for the purposes of the bill as a state contract or subcontract related to the construction of a broadband project that is funded by federal funds received by the state on or after July 1, 2025, and allocated by the CPUC.
3. Directs the following agencies to collaboratively develop and establish specified labor contract terms and requirements, which must be included in these agencies’ contracts, subcontracts, and procurement processes:
   1. CPUC.
   2. Department of Industrial Relations (DIR).
   3. Department of Technology (CDT).
   4. Department of Transportation (CalTrans).
   5. California Workforce Development Board.
   6. Any other state agency that constructs a broadband project.
4. Specifies specific provisions that must be included in every contract and subcontract for broadband construction conducted by state agencies. This bill requires each contract and subcontractor covered by this bill to certify that they comply with certain laws, including sick leave requirements, anti-retaliation provisions related to sick leave, and the federal Americans with Disabilities Act.
5. Prohibits every contractor and subcontractor on broadband construction projects from misclassifying individuals performing work on broadband projects, as specified.
6. Requires each contractor and subcontractor to submit the following information to state agencies:
   1. A history of compliance with applicable federal, state, and local labor laws.
   2. The number of individuals the contractor or subcontractor anticipates hiring to perform work to fulfill the contract.
   3. For each job title, the minimum compensation and benefits paid to an employee who performs work to fulfill the contract.
   4. A plan to recruit, hire, and train individuals who face barriers to employment or underrepresented individuals to perform work to fulfill the contract.
   5. A plan to prioritize hiring individuals within the local community in which the project is located to perform work to fulfill the contract.
   6. A plan to hire individuals from an apprenticeship program to perform work to fulfill the contract.
7. Requires the CPUC, DIR, CDT, CalTrans, the California Workforce Development Board, and any other state agency constructing a broadband project under this bill to consult with relevant stakeholders, which much include recognized labor unions, to develop contract terms and requirements for broadband projects. This bill requires these agencies to submit a report to the Legislature by March 1, 2025, listing the stakeholders with which the agencies consulted and a summary of the consultations.
8. This bill requires these agencies to incorporate contract terms and requirements developed with stakeholders into any contracts, agency procurements, amendments to contracts, or renewals of contracts.
9. Requires the CPUC, DIR, CDT, CalTrans, the California Workforce Development Board, and any other state agency constructing a broadband project to post contract terms and requirements developed pursuant to this bill on their respective internet websites.
10. Authorizes state agencies to adopt labor standards higher than this bill.

Background

Bill includes other agencies, but only impacts contracts for BEAD deployment. This bill establishes requirements in the Public Contract Code that imply that other agencies will be responsible for adopting labor contract requirements for broadband deployment projects; however, the bill’s definition of a “contract” narrows the scope of projects covered by the bill to only those receiving a grant from the BEAD program. While this bill directs DIR, CDT, CalTrans, CPUC, California Workforce Development Board, and any other agency overseeing broadband deployment projects to develop specific labor provisions for their public contracts, the bill also defines a “contract for its purposes as a “state contract or subcontract related to the construction of a broadband project that is funded by federal funds received by the state on or after July 1, 2025, and allocated by the CPUC.” This definition of a contract currently applies only to contracts for awards issued under the BEAD program. While CDT received federal funds for the construction of a state-owned middle mile network, these funds were received before July 1, 2025, and the funds were not allocated by the CPUC. The CPUC initially received federal funds for the deployment of broadband infrastructure in the FFA; however, these funds were received before July 1, 2025, and will likely be encumbered before this bill may be enacted. It is unclear if any state agency other than the CPUC would enter into an agreement that could be construed as a “contract” for broadband construction under this bill. As a result, this bill’s provisions may only apply to contracts related broadband infrastructure deployment under BEAD. At this time, there are no new federal funds scheduled for state-level disbursement to support broadband infrastructure deployment beyond the BEAD program. This bill references procurement processes; however, the bill does not define those procurements. As a result, the scope of the bill’s impact on agencies’ procurements is unclear.

CPUC’s BEAD plan already includes extensive labor provisions. National Telecommunications and Information Administration’s (NTIA’s) guidance to states provided a series of baseline requirements that every state must adopt; however, it also provided some discretion to states when adopting requirements above the baseline. NTIA’s guidance set baseline labor requirements for all BEAD applicants, and it also encouraged states to adopt program rules that would incentivize labor benefits above NTIA’s baseline requirements. As part of the CPUC proceeding (R. 23-02-016) adopt requirements for implementing the BEAD program, the Communications Workers of America (CWA) and a coalition of labor unions and organizations filed comments in May 2023, emphasizing the need for BEAD application criteria that achieved the following goals:

• Prioritizing labor factors beyond those required by NTIA, including a directly employed workforce, in-house training, a locally-based workforce, and quality wages and benefits.
• Providing a substantial point allocation for labor factors in application scoring.
• Collecting and publishing information regarding subgrantees workforce plans, including information about subcontracting, job quality, training and safety, and local hiring.

On November 7, 2023, the CPUC issued a staff proposal for BEAD implementation rules, which adopted both mandatory labor requirements and established labor criteria for scoring applications. Several provisions of this bill are substantially similar to certain portions of the CPUC BEAD staff proposal. For example, all applicants are required to certify their compliance with relevant labor law for prior broadband deployment projects. All applicants must also certify that proposed contractors and subcontractors have certain labor practices in place, including wage scales for each class of employees. Other requirements in the staff proposal include requiring applicants to discuss workforce plans for subgrantees, including plans for local hires, policies for public disclosure of workforce plans, plans for targeted hires, job quality, job safety, apprenticeship utilization, and plans to use a directly-employed workforce, in-house training, and a locally-based workforce. In addition these requirements, the CPUC also allocated a substantial amounts of points in the applications scoring criteria to labor standards. Under the staff proposals, the CPUC will award projects up to 100 points. Labor commitments will comprise 20 of those 100 points. Only consumer affordability measures offer more points for an applicant. Below is language directly from the CPUC’s staff proposal for allocating points to BEAD proposals based on labor commitments:

Labor Standards: up to 20 points Up to 20 points will be awarded, with 10 points based on (1) a demonstrated history of compliance with federal labor laws; (2) demonstrated commitments to future compliance with federal labor laws; and (3) the quality and contents of labor practice-related items submitted during the Application Phase. Projects on Tribal lands will receive the 10 points for labor standards as long as the project complies with Tribal and applicable federal law concerning labor standards. Additionally, up to 10 points will be awarded to all projects on the basis of workforce capacity building and development commitments, especially those prioritizing equitable workforce development. New entrants without a lengthy record of labor and employment law compliance will receive points in this category based on specific, concrete commitments to strong labor and employment standards and protections and equitable workforce development commitments going forward. Up to 10 points will be deducted for official labor relations complaints or violations in the five years preceding the date of application.

On November 27, 2023, CWA and a coalition of labor organizations filed comments on the staff proposal. The comments were largely supportive, but recommended a higher number of applications scoring points for labor considerations, more detail on how each of those points would be allocated, and more detail about how certain enforcement measures will be conducted. For example, the labor coalition largely supported CPUC’s proposed enforcement measures, like site visits; however, the coalition recommended that these site visits be periodic and random, but with specific engineering information provided in advance for verification at the site. Regarding the CPUC’s proposals for enforcing workforce commitments, the labor coalition’s comments state:

“The Initial Proposal states that successful applicants will be required to submit ongoing workforce reports and that these reports will be legally binding and publicly available (p. 62-63). Respondents commend the CPUC for the model practices outlined in this section.”

Too late? Unlike other broadband infrastructure deployment programs, the BEAD program is heavily managed by the federal government through the NTIA. While NTIA has constructed the program to provide states with some flexibility to develop program administration plans that meet their states’ needs, certain aspects of the BEAD program are federal requirements that may not be modified by states. NTIA set strict deadlines for various portions of the BEAD program. In order to draw down funding, each state was required to submit a detailed proposal for how the state will administer BEAD funding. Below is a brief outline of the key dates for BEAD implementation.

Under federal BEAD requirements, each state must accept, review, and proposal approvals for BEAD applications in accordance with the criteria approved by the NTIA. Given the timelines provided by NTIA, the CPUC may be accepting and reviewing applications for BEAD funding before this bill may be enacted. To the extent that this bill would establish contract requirements that substantially impact BEAD eligibility and the application scoring process outlined in the CPUC’s BEAD implementation plan, it is not clear if NTIA will permit changes to the CPUC’s BEAD plan. To the extent that this bill changes BEAD funding eligibility or feasibility for applicants that have submitted applications, this bill may result in the withdrawal of applications or cancellations of grant awards.

Need for Amendments. As currently drafted, it is not clear that this bill will add substantially greater labor outcomes to the BEAD program above those already proposed by the CPUC. Additionally, this bill may add delays and ambiguity to the application submission and scoring process that could jeopardize applicants’ efforts to submit successful BEAD proposals under existing NTIA timelines. As a result, the author and committee may wish to amend this bill to recast the bill to require the California Workforce Development Board work with stakeholders and other agencies, including the CPUC, to develop model contract provisions that could increase the utilization of recognized labor unions’ apprenticeships in the telecommunications sector, including on broadband deployment projects awarded state grants.

Dual Referral. Should this bill be approved by this committee, it will be re-referred to the Senate Committee on Labor, Public Employment and Retirement.

Prior/Related Legislation

AB 662 (Boerner, 2023) would have established requirements for the administration of the BEAD program, and would have prohibited the CPUC from taking any actions to administer the BEAD program that are not specified in the bill. The bill was held in the Senate Appropriations Committee.

SB 4 (Gonzalez, Chapter 671, Statutes of 2021) and AB 14 (Aguiar-Curry, Chapter 658, Statutes of 2021) revised and extended the CASF by increasing speed standards for CASF-funded infrastructure to 100/20 Mbps, expanded eligibility to communities that lack broadband service meeting federal standards, expanded local governments’ eligibility for CASF grants, and extended CASF’s operation and funding until 2032.

SB 156 (Committee on Budget, Chapter 112, Statutes of 2021) implemented broadband infrastructure spending approved in the 2021 Budget Act. The bill established the FFA within the CASF to fund broadband infrastructure projects using one-time funds. The bill also required the CDT to oversee the construction of a state-owned, open access middle mile broadband network.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Communications Workers of America, District 9, Sponsor

California Labor Federation

OPPOSITION:

California Broadband & Video Association

USTelecom-The Broadband Association

ARGUMENTS IN SUPPORT: According to the author:

I have worked my entire life, as a migrant farmworker and in my career, to make California more equitable. Now – in the midst of a seismic change in our economy – the greatest transformation since the Industrial Revolution – we cannot make the same mistakes of the past. A commitment to climate and digital equity means a commitment to workers.

As our state receives once-in-a-generation funding from the federal government and makes historical investments of our own, we continue to have the highest supplemental poverty rate of any state in our country. We must go beyond “job creation” – this is about access to good jobs.

As the largest recipient of federal infrastructure funds complementing what our state and local governments are spending on closing the digital divide, transportation and climate adaptation, California can lead the way for people building these projects to have access to quality jobs.

ARGUMENTS IN OPPOSITION: Opponents argue that this bill could put BEAD funding at risk by disrupting NTIA’s review of California’s proposed BEAD implementation plan. In opposition, a coalition of telecommunications organizations, including USTelecom – The Broadband Association and the California Broadband and Video Association (CalBroadband) state:

The CPUC submitted Volume I and Volume II of the BEAD Initial Proposal to NTIA in December of 2023. NTIA is currently reviewing the Volumes to ensure compliance with the requirements of the Notice of Funding Opportunity and NTIA program guidance.

This bill adds additional requirements on grantees that would require re-opening of the BEAD proposals that have already been sent to NTIA. This would upend California’s BEAD process with NTIA and create uncertainty for the $1.86 billion in federal funds on the table. There is too much at stake and the funding is critical to reach the last of the unserved areas of California, we cannot put that funding at risk. Thus, we must respectfully oppose SB 1460 (Durazo).

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