(1)Existing law establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a risk management plan (RMP) to prevent accidental releases of certain substances. Existing law imposes criminal penalties upon a stationary source that knowingly violates the requirements of the accidental release prevention program. Existing law requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades. Existing law defines skilled and trained workforce to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate.

This bill would extend that workforce requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, the bill would impose a state-mandated local program.

(2)Existing law provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment. Existing law requires apprentice training needs in the building and construction trades to be deemed to justify a new apprentice program only if one or more specified conditions are met, including, but not limited to, there being sufficient capacity for apprentices in a geographic area.

This bill would require an above-described stationary source to be considered when determining whether an existing apprenticeship program has sufficient capacity for apprentices in a geographic area.

(3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

(1)Existing law establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a risk management plan (RMP) to prevent accidental releases of certain substances. Existing law imposes criminal penalties upon a stationary source that knowingly violates the requirements of the accidental release prevention program. Existing law requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades. Existing law defines skilled and trained workforce to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate.

This bill would extend that workforce requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, the bill would impose a state-mandated local program.

(2)Existing law provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment. Existing law requires apprentice training needs in the building and construction trades to be deemed to justify a new apprentice program only if one or more specified conditions are met, including, but not limited to, there being sufficient capacity for apprentices in a geographic area.

This bill would require an above-described stationary source to be considered when determining whether an existing apprenticeship program has sufficient capacity for apprentices in a geographic area.

(3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

(1)Existing law establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a risk management plan (RMP) to prevent accidental releases of certain substances. Existing law imposes criminal penalties upon a stationary source that knowingly violates the requirements of the accidental release prevention program. Existing law requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source source, to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades. Existing law defines skilled and trained workforce to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate.

This bill would extend that workforce requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, the bill would impose a state-mandated local program.

(2)Existing law provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment. Existing law requires apprentice training needs in the building and construction trades to be deemed to justify a new apprentice program only if one or more specified conditions are met, including, but not limited to, there being sufficient capacity for apprentices in a geographic area.

This bill would require an above-described stationary source to be considered when determining whether an existing apprenticeship program has sufficient capacity for apprentices in a geographic area.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

(1)Existing law establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a risk management plan (RMP) to prevent accidental releases of certain substances. Existing law imposes criminal penalties upon a stationary source that knowingly violates the requirements of the accidental release prevention program. Existing law requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades. Existing law defines skilled and trained workforce to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate.

This bill would extend that workforce requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, lithium batteries, or certain specified chemicals, in mining or beneficiating lithium, or in capturing, sequestering, or using carbon dioxide in specified conditions.

By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Existing law establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a risk management plan (RMP) to prevent accidental releases of certain substances. Existing law imposes criminal penalties upon a stationary source that knowingly violates the requirements of the accidental release prevention program. Existing law requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades. Existing law defines skilled and trained workforce to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate.

This bill would extend that workforce requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, lithium batteries, or certain specified chemicals, in mining or beneficiating lithium, or in capturing, sequestering, or using carbon dioxide in specified conditions.

By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

SENATE THIRD READING

STR Bill Id:SB 740

Author:(Cortese)

As Amended Ver:May 10, 2023

Majority vote

SUMMARY

Expands skilled and trained workforce (STW) requirements, currently applicable to an owner or operator of a stationary source that is engaged in certain petroleum-related activities, to also include contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

Major Provisions

1. Finds and declares, among other things, that it is the intent of this bill to expand the requirement for the use of a skilled and trained workforce to apply to additional industrial facilities regulated by the State Air Resources Board (ARB) where the use of a skilled and trained workforce to perform contracted-out onsite work will reduce risks to public health and safety and the environment.
2. Requires an owner or operator of a stationary source that is engaged in one or more activities described in 3), below, that require the preparation of a risk management plan (RMP), when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades.
3. Provides that 2), above, shall apply to the following activities when undertaken for commercial purposes:
   • 1. Hydrogen manufacturing.
     2. Biofuels manufacturing.
     3. Carbon dioxide (CO2) capture and sequestration in either saline or depleted oil and gas reservoirs, or oil and gas reservoirs used for CO2-enhanced oil recovery.
     4. Manufacturing of any of the following chemicals, whether as an intermediary or an end product: ammonia, chlorine, hydrogen fluoride, sulfur dioxide, or hydrogen chloride.
4. Provides that for purposes of existing law related to the approval of new apprenticeship programs, a stationary source covered by this section shall be considered in determining whether existing apprenticeship programs do not have the capacity, or have neglected or refused, to dispatch sufficient apprentices to qualified employers who are willing to abide by the applicable apprenticeship standards.
5. States that this bill conforms with certain provisions pertaining to the use of a STW at a covered stationary source, including exempting the owner or operator's own employees from the STW requirements, the applicability of certain labor standards under emergencies or workforce shortages, the inclusion of subcontractors, and stipulating that affected projects at a stationary source are not considered public works because they are subject to the specified STW requirements.

COMMENTS

California has recently expanded apprenticeship requirements for a subset of public works projects as well as for some private-sector construction projects through the skilled and trained workforce requirement. For construction projects where it applies, a percentage of all workers in apprenticeable occupations must be either skilled journeypersons or apprentices with a registered program.

The Center for American Progress (CAP) notes, "Registered apprenticeships are a highly effective workforce training and career pathway model. Apprenticeships include classroom instruction and structured on-the-job training from a qualified mentor, also known as a journeyworker. Industry partners provide input on the content of training, ensuring that apprentices earn skills that are in demand by employers. Apprentices earn a paycheck while they are being trained and receive wage increases commensurate with skill attainment. Ninety-three percent of apprentices retain employment after completing their program, and they earn an average salary of $77,000 per year. Sponsors of apprenticeship programs attest that apprenticeship models meet employer demand for skilled workers, improve productivity and worker safety, strengthen morale, and improve retention."^[1]

Additionally, according to the report by CAP, "Pre-apprenticeship pathways, such as HireLAX, Building Pathways, and Chicago Women in Trades, prepare individuals for apprenticeship programs and explicitly target underrepresented communities to further diversify the pipeline of new apprentices."^[2]

According to the Author

"As California and our federal government invests billions to move towards cleaner energy sources, it is important that we extend the protections provided for in SB 54 to the workforce in these new industries. [This bill] simply extends the worker and safety provisions in SB 54 provided to refineries to several other dangerous industries overseen by CARB including carbon capture, utilization and storage, chemical plants, biofuels and alternative fuels like hydrogen. [This bill] ensures that new professions in green industries are safe and have access to a high-quality skilled workforce."

In addition, the author notes that this bill will promote equity solutions and maximize benefits for underserved and marginalized communities because, "Learning a trade through a Building Trades Apprenticeship allows non-college bound Californians a path to the middle class because a tradesperson can expect to be paid the local prevailing wage and have family medical coverage and a pension. Every time a bill is signed into law that includes "skilled and trained" it means more Californians can be brought into apprenticeship. These opportunities exist around the state with specific recruitment programs to bring local people into the trades, encouraging diversity."

Arguments in Support

The State Building and Construction Trades Council of California, sponsor of the bill, states, "In 2013, this Legislature passed Senate Bill 54 (Hancock), a bill that finally ensured refineries were being maintained with a highly skilled workforce. SB 54 required the use of skilled journeypersons at California refineries and required that a certain percentage of them must be graduates of approved apprentice programs. For reference, apprenticeship programs in California are multi-year programs where apprentices split their time between classroom and job site learning. Apprenticeship in California also happens to be one of the few paths to the middle class for Californians lacking a college degree, something increasingly hard to find in communities around the state.

The skilled and trained provisions created by SB 54 drove significant expansion in California's apprenticeship programs. Apprenticeship completions nearly doubled between 2013 (when SB 54 was introduced) and 2021; this is staggering growth. A direct correlation clearly exists between the implementation of skilled and trained legislation like SB 54 and increases in apprenticeship opportunities. By continuing to promote skilled and trained language through legislation like [this bill], California can open more barrier-free pathways to the middle class for a whole new generation of workers.

By expanding the important safety protections of previous legislation to other industrial facilities overseen by the California Air Resource Board, namely carbon removal, hydrogen, biofuels, and chemical plants, [this bill] ensures that the deployment of new technologies is done safely. California's chances of meeting the climate crisis are highly dependent on our ability to do so in the safest, most productive manner. It is important that we meet the climate crisis, but it is equally important that we do so in a safe and responsible way."

Arguments in Opposition

Calpine Corporation, is opposed unless amended, and states, "Calpine has entered into over a dozen project labor and maintenance labor agreements in the state. We view the state's efforts to decarbonize sectors of the economy as good for the state's climate as well as its unionized workforce. Indeed, for its recently proposed carbon capture and sequestration (CCS) project at the Sutter Energy Center, Calpine initiated informal discussions with the California State Building Trades well in advance of any preliminary planning and we are now starting negotiations on a project labor agreement that will cover hundreds of workers across the trades. Our proposed CCS project will be the first natural gas CCS retrofit in the state and will capture 90% of the carbon emissions at the Sutter location.

Additionally, we will be negotiating a maintenance labor agreement that will include commonly accepted exclusions for specialty work that the manufacturer requires to be performed by manufacturer trained personnel in order to maintain the warranty for the capture unit. This warranty is vital to commercial viability of the project because it is required for commercial contracting and is used as an assurance to the federal government that the plant is operating sufficiently to qualify for the Federal 45Q tax credit. Existing union agreements exclude "specialty work" by manufacturers of proprietary systems and we would simply ask that this flexibility be allowed under [this bill]. Without this flexibility, manufacturers of new technology, where the skills to maintain or install have yet to be transferred to the larger unionized workforce, will refuse to warranty their systems making it impossible to build these projects."

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. Absorbable costs to Division of Apprenticeship Standards (DAS) from any increase in demand for apprenticeship participation or new apprenticeship programs. DAS notes existing programs have capacity for increased participation. Additionally, the Department of Industrial Relations estimates no costs to enforce this bill's skilled and trained workforce requirement, as there are no specified enforcement provisions.
2. Minor and absorbable costs to the State Air Resources Board.

VOTES

SENATE FLOOR: 36-2-2

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

NO: Grove, Niello

ABS, ABST OR NV: Ochoa Bogh, Seyarto

ASM LABOR AND EMPLOYMENT: 6-0-1

YES: Kalra, Chen, Haney, Ortega, Reyes, Ward

ABS, ABST OR NV: Flora

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Mathis, Papan, Pellerin, Sanchez, Soria, Weber, Wilson

ABS, ABST OR NV: McCarty

UPDATED

VERSION: May 10, 2023

CONSULTANT: Martin Vindiola / L. & E. / (916) 319-2091 FN: 0001305

1. Madland, D., Williams, M., Zhavoronkova, M. The Inflation Reduction Act Provides Pathways to High-Quality Jobs. Center For American Progress, September 2022. ↑

2. Ibid. ↑

Date of Hearing: August 23, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 740

Author:(Cortese) – As Amended Ver:May 10, 2023

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

SUMMARY:

This bill extends “skilled and trained workforce” requirements applicable to an owner or operator of a stationary source engaged in certain petroleum-related activities to such entities engaged in carbon capture and sequestration or manufacturing hydrogen, biofuels, or other specified chemicals.

This bill applies to contracts for onsite construction, alteration, demolition, installation, repair, or maintenance work awarded, extended, or renewed on or after January 1, 2024.

This bill also requires the Division of Apprenticeship Standards (DAS) chief to consider the above-described workforce need when determining whether an existing apprenticeship program has sufficient capacity for training new apprentices in a geographic area, thus justifying the approval of a new apprenticeship program.

FISCAL EFFECT:

1. Absorbable costs to DAS from any increase in demand for apprenticeship participation or new apprenticeship programs. DAS notes existing programs have capacity for increased participation. Additionally, the Department of Industrial Relations estimates no costs to enforce this bill’s skilled and trained workforce requirement, as there are no specified enforcement provisions.
2. Minor and absorbable costs to the State Air Resources Board.

COMMENTS:

1. Purpose. According to the author:

As California and our federal government invests billions to move towards cleaner energy sources, it is important that we extend the protections provided for in SB 54 to the workforce in these new industries. [This bill] simply extends the worker and safety provisions in SB 54 provided to refineries to several other dangerous industries overseen by CARB including carbon capture, utilization and storage, chemical plants, biofuels and alternative fuels like hydrogen.

1. Support and Opposition. This bill is sponsored by the State Building and Construction Trades Council of California, which argues this bill “will ensure that our skilled industrial workforce is positioned to play a role in the new technologies being deployed in California to meet the climate crisis.” This bill is also supported by other labor organizations and union electrical, mechanical, and plumbing contractor associations.

This bill is opposed by Calpine Corporation unless amended, as “Existing union agreements exclude ‘specialty work’ by manufacturers of proprietary systems and we would simply ask that this flexibility be allowed under SB 740.” This bill is also opposed by United Steelworkers District 12 unless amended, as “any worker trained via a joint labor-management should be considered to be a part of the skilled and trained workforce.”

1. Skilled and Trained Workforce. SB 54 (Hancock), Chapter 795, Statutes of 2013, required an owner or operator of a petroleum refinery or petrochemical manufacturing facility, when contracting for construction, maintenance, and related work, to require contractors and subcontractors use a skilled and trained workforce to perform all onsite work. Additionally, the state has recently required a skilled and trained workforce for a subset of public works projects, as well as for some private sector construction projects. This bill expands SB 54’s skilled and trained workforce requirements to newer types of energy production facilities.
2. Related Legislation. SB 422 (Portantino) requires certain climate projects to employ a skilled and trained workforce and pay the prevailing wage to be eligible for an expedited environmental review process. SB 422 is pending on this committee’s suspense file.

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

Date of Hearing: July 12, 2023

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Ash Kalra, Chair

SBPCA Bill Id:SB 740

Author:(Cortese) – As Amended Ver:May 10, 2023

SENATE VOTE: 36-2

SUBJECT: Hazardous materials management: stationary sources: skilled and trained workforce

SUMMARY: Expands skilled and trained workforce (STW) requirements, currently applicable to an owner or operator of a stationary source that is engaged in certain petroleum-related activities, to also include contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions. Specifically, this bill:

1. Finds and declares, among other things, that it is the intent of this bill to expand the requirement for the use of a skilled and trained workforce to apply to additional industrial facilities regulated by the State Air Resources Board (ARB) where the use of a skilled and trained workforce to perform contracted-out onsite work will reduce risks to public health and safety and the environment.
2. Requires an owner or operator of a stationary source that is engaged in one or more activities described in 3) below that require the preparation of a risk management plan (RMP), when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades.
3. Provides that 2) above shall apply to the following activities when undertaken for commercial purposes:
   • 1. Hydrogen manufacturing
     2. Biofuels manufacturing
     3. Carbon dioxide (CO2) capture and sequestration in either saline or depleted oil and gas reservoirs, or oil and gas reservoirs used for CO2-enhanced oil recovery.
     4. Manufacturing of any of the following chemicals, whether as an intermediary or an end product: ammonia, chlorine, hydrogen fluoride, sulfur dioxide, or hydrogen chloride.
4. Provides that for purposes of existing law related to the approval of new apprenticeship programs, a stationary source covered by this section shall be considered in determining whether existing apprenticeship programs do not have the capacity, or have neglected or refused, to dispatch sufficient apprentices to qualified employers who are willing to abide by the applicable apprenticeship standards.
5. States that this bill conforms with certain provisions pertaining to the use of a STW at a covered stationary source, including exempting the owner or operator’s own employees from the STW requirements, the applicability of certain labor standards under emergencies or workforce shortages, the inclusion of subcontractors, and stipulating that affected projects at a stationary source are not considered public works because they are subject to the specified STW requirements.
   

EXISTING FEDERAL LAW:

Defines a “stationary source” as unmoving structures or activities that are capable of releasing a regulated substance or other extremely hazardous substance into the ambient air, and requires specified entities to prepare a RMP. (40 CFR § 68.3)

EXISTING STATE LAW:

1. Establishes an accidental release prevention program for the state and requires specified stationary sources subject to the accidental release prevention program to prepare and submit a RMP to prevent accidental releases of specified substances. (H&S Code, § 25531 et seq.)
2. Requires an owner or operator of specified stationary sources (petroleum refineries and petrochemical manufacturing facilities), when contracting for the performance of construction, maintenance and related work, to require that its contractors and any subcontractors use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades.
   (H&S Code, § 25536.7 (a).)
   1. Specifies that this provision does not apply to oil and gas operations.
3. Provides a framework for promoting and developing apprenticeship training through the California Apprenticeship Council (CAC) and the Division of Apprenticeship Standards (DAS) within the Department of Industrial Relations (DIR). DAS enforces apprenticeship standards for, among other things, working conditions, classroom instruction and the specific skills required for state certification as a journeyperson in an apprenticeable occupation. (Labor Code, § 3075.)
4. Defines “apprenticeable occupation” as an occupation for which the Chief of DAS has approved an apprenticeship program. (H&S Code, § 25536.7 (b)(1).)
5. Defines a “skilled journeyperson” as a worker who meets the following criteria:
   1. The worker either graduated from an apprenticeship program for the applicable occupation that was approved by the Chief of DAS, or has at least as many hours of on-the-job experience in the applicable occupation that would be required to graduate from an apprenticeship program for the applicable occupation that is approved by the Chief.
   2. The worker is being paid at least a rate equivalent to the prevailing hourly wage rate for a journeyperson in the applicable occupation and geographic area.
   3. The worker has completed within the prior three calendar years at least 20 hours of approved advanced safety training for workers at high hazard facilities. This requirement applies only to work performed on or after July 1, 2018. (H&S Code, § 25536.7 (b)(10).)
6. Defines a STW as a workforce that meets the following criteria:
   1. All the workers are either registered apprentices or skilled journeypersons.
   2. As of January 1, 2014, at least 30 percent of the skilled journeypersons are graduates of an apprenticeship program for the applicable occupation.
   3. As of January 1, 2015, at least 45 percent of the skilled journeypersons are graduates of an apprenticeship program for the applicable occupation.
   4. As of January 1, 2016, at least 60 percent of the skilled journeypersons are graduates of an apprenticeship program for the applicable occupation. (H&S Code, § 25536.7 (b)(11).)

FISCAL EFFECT: According to the Senate Appropriations Committee, unknown but potentially very significant ongoing cost pressure (General Fund, Greenhouse Gas Reduction Fund [GGRF], other special funds, and bond funds) to provide funding for additional activities that could be needed as a result of SB 740 in order to meet existing climate goals. This bill would impose STW requirements on industries critical to our carbon neutrality and climate goals without putting in place any protections to ensure implementation would not delay, restrict, disrupt, or make more costly activities upon which our climate strategy relies. It is possible that the addition of STW requirements could lower outputs or reduce cost effectiveness of state climate investments, thereby requiring—if we are to achieve the same greenhouse gas (GHG) reductions by established deadlines—the state to backfill forgone GHG reductions that otherwise likely would have occurred absent this bill.

COMMENTS: California has recently expanded apprenticeship requirements for a subset of public works projects as well as for some private-sector construction projects through the skilled and trained workforce requirement. For construction projects where it applies, a percentage of all workers in apprenticeable occupations must be either skilled journeypersons or apprentices with a registered program.

According to the author, “As California and our federal government invests billions to move towards cleaner energy sources, it is important that we extend the protections provided for in SB 54 to the workforce in these new industries. [This bill] simply extends the worker and safety provisions in SB 54 provided to refineries to several other dangerous industries overseen by CARB including carbon capture, utilization and storage, chemical plants, biofuels and alternative fuels like hydrogen. [This bill] ensures that new professions in green industries are safe and have access to a high-quality skilled workforce.”

In addition, the author notes that this bill will promote equity solutions and maximize benefits for underserved and marginalized communities because, “Learning a trade through a Building Trades Apprenticeship allows non-college bound Californians a path to the middle class because a tradesperson can expect to be paid the local prevailing wage and have family medical coverage and a pension. Every time a bill is signed into law that includes “skilled and trained” it means more Californians can be brought into apprenticeship. These opportunities exist around the state with specific recruitment programs to bring local people into the trades, encouraging diversity.”

Federal Inflation Reduction Act

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 into law.^[1] According to the U.S. Department of Labor, “The Inflation Reduction Act is by far our nation’s largest investment in clean energy solutions to date. By pairing climate investment with the creation of good-paying jobs, the Inflation Reduction Act’s unparalleled investments to fight the climate crisis will help improve job quality in clean energy industries and incentivize the expansion of workforce training pathways into these jobs.”^[2]

Additionally the White House fact sheet on the Inflation Reduction Act notes, “In 2021, there were already 505,083 California workers employed in clean energy jobs. The Inflation Reduction Act will expand these opportunities, bringing an estimated $21.2 billion of investment in large-scale clean power generation and storage to California between now and 2030. It provides a historic set of tax credits that will create jobs across solar, wind, storage, and other clean energy industries. These credits include bonuses for businesses that pay a prevailing wage, so that California workers earn a good paycheck as we build the clean energy future in America.”^[3]

Registered Apprenticeships

The Center for American Progress (CAP) notes, “Registered apprenticeships are a highly effective workforce training and career pathway model. Apprenticeships include classroom instruction and structured on-the-job training from a qualified mentor, also known as a journeyworker. Industry partners provide input on the content of training, ensuring that apprentices earn skills that are in demand by employers. Apprentices earn a paycheck while they are being trained and receive wage increases commensurate with skill attainment. Ninety-three percent of apprentices retain employment after completing their program, and they earn an average salary of $77,000 per year. Sponsors of apprenticeship programs attest that apprenticeship models meet employer demand for skilled workers, improve productivity and worker safety, strengthen morale, and improve retention.”^[4]

Additionally, according to the report by CAP, “Pre-apprenticeship pathways, such as HireLAX, Building Pathways, and Chicago Women in Trades, prepare individuals for apprenticeship programs and explicitly target underrepresented communities to further diversify the pipeline of new apprentices.”^[5]

Arguments in Support

The State Building and Construction Trades Council of California, sponsor of the bill, states, “In 2013, this Legislature passed Senate Bill 54 (Hancock), a bill that finally ensured refineries were being maintained with a highly skilled workforce. SB 54 required the use of skilled journeypersons at California refineries and required that a certain percentage of them must be graduates of approved apprentice programs. For reference, apprenticeship programs in California are multi-year programs where apprentices split their time between classroom and job site learning. Apprenticeship in California also happens to be one of the few paths to the middle class for Californians lacking a college degree, something increasingly hard to find in communities around the state.

The skilled and trained provisions created by SB 54 drove significant expansion in California’s apprenticeship programs. Apprenticeship completions nearly doubled between 2013 (when SB 54 was introduced) and 2021; this is staggering growth. A direct correlation clearly exists between the implementation of skilled and trained legislation like SB 54 and increases in apprenticeship opportunities. By continuing to promote skilled and trained language through legislation like [this bill], California can open more barrier-free pathways to the middle class for a whole new generation of workers.

By expanding the important safety protections of previous legislation to other industrial facilities overseen by the California Air Resource Board, namely carbon removal, hydrogen, biofuels, and chemical plants, [this bill] ensures that the deployment of new technologies is done safely. California's chances of meeting the climate crisis are highly dependent on our ability to do so in the safest, most productive manner. It is important that we meet the climate crisis, but it is equally important that we do so in a safe and responsible way.”

Arguments in Opposition

Calpine Corporation, is opposed unless amended, and states, “Calpine has entered into over a dozen project labor and maintenance labor agreements in the state. We view the state’s efforts to decarbonize sectors of the economy as good for the state’s climate as well as its unionized workforce. Indeed, for its recently proposed carbon capture and sequestration (CCS) project at the Sutter Energy Center, Calpine initiated informal discussions with the California State Building Trades well in advance of any preliminary planning and we are now starting negotiations on a project labor agreement that will cover hundreds of workers across the trades. Our proposed CCS project will be the first natural gas CCS retrofit in the state and will capture 90% of the carbon emissions at the Sutter location.

Additionally, we will be negotiating a maintenance labor agreement that will include commonly accepted exclusions for specialty work that the manufacturer requires to be performed by manufacturer trained personnel in order to maintain the warranty for the capture unit. This warranty is vital to commercial viability of the project because it is required for commercial contracting and is used as an assurance to the federal government that the plant is operating sufficiently to qualify for the Federal 45Q tax credit. Existing union agreements exclude “specialty work” by manufacturers of proprietary systems and we would simply ask that this flexibility be allowed under [this bill]. Without this flexibility, manufacturers of new technology, where the skills to maintain or install have yet to be transferred to the larger unionized workforce, will refuse to warranty their systems making it impossible to build these projects.”

Prior Legislation

SB 422 (Portantino) of 2023 would require certain projects that support the state’s greenhouse gas emission reduction targets or that use pollution control equipment to employ a skilled and trained workforce and pay the prevailing wage to be eligible for an expedited environmental review process. This bill is currently pending a hearing in this Committee.

SB 419 (Stern) of 2021 would have required an owner or operator of a well or production facility, when contracting for the performance of certain work by a licensed contractor or subcontractor, on or after January 1, 2022, to use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades. This bill was gut and amended to remove this language and subsequently died in the Senate.

AB 680 (Burke) Chapter 746, Statutes of 2021 enacts the California Just Transition Act, which requires the Labor and Workforce Development Agency to update 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.

SB 288 (Wiener) Chapter 200, Statutes of 2020 requires, among other things, the use of a STW for certain transit-related projects conducted by public agencies.

AB 3018 (Low) Chapter 882, Statutes of 2018 enhanced compliance with STW rules by strengthening public agency reporting requirements, creating penalties for noncompliance, and providing the Labor Commissioner with the authority to issue a civil wage and penalty assessment against a contractor or subcontractor found in violation of state law.

SB 693 (Hueso) Chapter 774, Statutes of 2016 consolidated the STW requirements of various provisions of existing law related to alternative construction delivery methods, defined the terms of these requirements, and made other conforming changes.

SB 54 (Hancock) Chapter 795, Statutes of 2013 requires an owner or operator of specified stationary sources (petroleum refineries and petrochemical manufacturing facilities), when contracting for the performance of construction, maintenance and related work, to require that its contractors and any subcontractors use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades.

REGISTERED SUPPORT / OPPOSITION:

Support

State Building and Construction Trades Council of CA (Sponsor)
Bricklayers and Allied Crafts Local 3
California Labor Federation
California Legislative Conference of Plumbing, Heating & Piping Industry
California State Association of Electrical Workers
California State Pipe Trades Council
Carpet, Linoleum & Soft Tile Workers Local 12
Contra Costa Building and Construction Trades Council
District Council 16, International Union of Painters and Allied Trades
District Council 36, International Union of Painters and Allied Trades
District Council of Iron Workers of The State of California and Vicinity
Elevator Constructors Local 8
IBEW Local 302
IBEW Local 40
IBEW Local 428
IBEW Local 595
IBEW Local 617
IBEW Local Union 441
IBEW Local Union 569
IBEW Local Union 639
IBEW Local Union 952
International Brotherhood of Boilermakers Local 549
International Brotherhood of Boilermakers Local 92
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers
International Union of Operating Engineers, Cal-Nevada Conference
Iron Workers Local 118
Iron Workers Local 229
Iron Workers Local 416
Iron Workers Local 433
Los Angeles / Orange Counties Building and Construction Trades Council
Monterey/Santa Cruz Counties Building & Construction Trades Council
National Electrical Contractors Association 
Northern California Sheet Metal Workers' Local 104
OPCMIA Local 400
Painters & Drywall Finishers Local 913
Plumbers & Steamfitters, Local 342
Sacramento-sierra Building and Construction Trades Council
San Francisco Building and Construction Trades Council
Santa Clara and San Benito Counties Building and Construction Trades Council
UA Local 228
UA Local 582
United Association Local 159
United Association Local 230
United Association Local 246
United Association Local 250
United Association Local 345
United Association Local 38
United Association Local 398
United Association Local 447
United Association Local 460
United Association Local 467
United Association Local 483
United Association Local 484
United Union of Roofers, Waterproofers & Allied Workers Local 220
Western States Council Sheet Metal, Air, Rail and Transportation

Oppose Unless Amended

Calpine Corporation
United Steelworkers District 12

Analysis Prepared by: Martin Vindiola / L. & E. /

1. U.S. Department of Labor. Webpage: Prevailing Wage and the Inflation Reduction Act. https://www.dol.gov/agencies/whd/IRA ↑

2. Ibid. ↑

3. The White House. STATE FACT SHEETS: How the Inflation Reduction Act Lowers Energy Costs, Creates Jobs, and Tackles Climate Change Across America, August 2022. ↑

4. Madland, D., Williams, M., Zhavoronkova, M. The Inflation Reduction Act Provides Pathways to High-Quality Jobs. Center For American Progress, September 2022. ↑

5. Ibid. ↑

 THIRD READING  

Bill No: SB 740

Author: Cortese (D), et al.

Amended: 5/10/23

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 4/26/23

AYES: Allen, Dahle, Gonzalez, Hurtado, Jones, Menjivar, Skinner

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/18/23

AYES: Portantino, Jones, Ashby, Bradford, Wahab, Wiener

NO VOTE RECORDED: Seyarto

SUBJECT: Hazardous materials management: stationary sources: skilled and trained workforce

SOURCE: State Building and Construction Trades Council

DIGEST:

This bill expands the skilled and trained workforce (STW) requirements for contracted workers per SB 54 (Hancock, Chapter 795, Statutes of 2013) from applying solely to petroleum refineries to additionally apply to facilities engaged in manufacturing hydrogen, biofuels, or certain chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

ANALYSIS: Existing federal law defines a stationary source as unmoving structures or activities that are capable of releasing a regulated substance or other extremely hazardous substance into the ambient air, and requires specified entities to prepare a risk management plan (RMP) (Code of Federal Regulations Title 40 §68.3)

Existing state law:

1. Establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a RMP to prevent accidental releases of certain substances. (Health and Safety Code (HSC) §25531 et seq.)
2. Requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source to require that its contractors and any subcontractors use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades. (HSC § 25536.7)
3. Defines “skilled and trained workforce” to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate. (HSC § 25536.7)
4. Provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment. (Labor Code § 3075)
5. Requires apprentice training needs in the building and construction trades to be deemed to justify a new apprentice program if existing apprenticeship programs are not filling requests for apprentices in refineries subject to skilled-and-trained workforce requirements. (HSC § 25536.7)

This bill:

1. Extends that STW requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.
2. Requires an above-described stationary source to be considered when determining whether an existing apprenticeship program has sufficient capacity for apprentices in a geographic area.
3. States that this bill conforms with certain provisions from SB 54 (Hancock, Chapter 795, Statutes of 2013), including employees at the stationary source being unaffected, the applicability of certain labor standards under emergencies or workforce shortages, the inclusion of subcontractors, and stipulating that affected projects are not considered public works by being subject to this act.
4. Imposes a state-mandated local program, by expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties.

Background

1. The California Accidental Release Prevention (CalARP) program. The purpose of the CalARP program is to prevent accidental releases of substances that can cause serious harm to the public and the environment, and to minimize the damage if releases do occur. CalARP requires certain facilities (referred to as “stationary sources”) that handle, manufacture, use, or store any regulated substances above threshold quantities to take actions to proactively prevent and prepare for accidental releases. Facilities subject to CalARP requirements must submit a Risk Management Plan (RMP). A RMP is a document prepared by the owner or operator of a stationary source containing pertinent specified information about the facility.

The California Environmental Protection Agency (CalEPA) oversees the implementation of the CalARP program at the state level, while Certified Unified Program Agencies (CUPAs) and/or Participating Agencies implement the CalARP program at the local level. The CalARP program is designed for the CUPA to work directly with the regulated businesses. The CUPAs determine the level of detail in the RMPs, review the RMPs, conduct facility inspections, and provide public access to most of the information.

1. Skilled and Trained Workforce and Contractors. Over the last decade, the Legislature has passed and the Governor has signed into law numerous bills requiring the use of a STW to perform construction, alteration, demolition, installation, repair, and maintenance work on various types of public and private sector construction projects. Currently, there are over 15 STW statutes in various state codes, each of which applies to different types of projects.

For the purposes of this bill, STW requirements are applied when the owner or operator of a specified stationary source enters into a contract for the performance of construction, alteration, demolition, installation, repair, or maintenance work.

1. Impact on worker supply and ability to build. A relevant policy question pertaining to STW requirements is how such requirements affect the labor market supply of workers and the ability to build. According to an April 15, 2021, Senate Labor Committee analysis, “Impacts of STW requirements on the supply of ‘skilled and trained’ labor likely depend on the region where an affected construction project is located, the business cycle, the type of project, and how long STW requirements have been in place.

“Demand for all construction labor, not just ‘skilled and trained’ labor fluctuates cyclically and by economic region. In pro-cyclical periods the demand for construction labor may often outpace supply while in trough periods supply may exceed demand. The supply of ‘skilled and trained’ labor typically grows as demand for it grows but there may initially be a supply lag...”

The state’s apprenticeship programs play a crucial role in training and providing the supply of skilled and trained labor. They would be needed to provide the labor required for the industries included under SB 740.

1. Improving public and worker safety at oil refineries. On August 6, 2012, the Chevron refinery in Richmond experienced a catastrophic pipe failure, releasing high-temperature flammable fluid that partially vaporized into a large cloud. The vapor cloud engulfed 19 employees. All 19 employees narrowly avoided serious injury or death. The vapor cloud spread well beyond the refinery, causing 15,000 East Bay residents to seek medical attention.

Multiple agencies opened investigations in response to the incident and then-Governor Brown formed an Interagency Working Group on Refinery Safety. The Working Group concluded that refinery safety can and must be improved.

“Government agencies and industry can work together to develop and implement a culture that fosters safety, including stronger accident prevention and hazard reduction measures. Government agencies can improve interagency coordination, emergency response procedures, and communication and outreach to the public.”

1. Stationary sources: Skilled Workforce. In response to these events, the Legislature passed and the Governor signed SB 54 (Hancock, Chapter 795, Statutes of 2013) which requires owners and or operators of stationary sources of specified petroleum refineries and petrochemical manufacturing facility owners or operators contracting for construction and other related maintenance to require that their contractors and subcontractors use a STW to perform all work done within apprenticeable occupations in the building and construction trades. Additionally, the bill requires these workers must be paid at least a rate equivalent to the applicable prevailing hourly wage rate.
2. Four industries integral to the state’s climate goals. Achieving the state’s carbon neutrality goal (established by AB 1279 (Muratsuchi, Chapter 337, Statutes of 2022)) will require massive and unprecedented shifts in how the state’s economy is powered, as well as the rapid development of nascent technologies.

Looking specifically at the four industries included in SB 740, they are mostly expected to expand significantly in the coming years in the pursuit of carbon neutrality. Hydrogen and biofuels are both expected to play important and varied roles in replacing fossil fuels’ current role in powering vehicles, industrial applications, and electricity provision. Carbon dioxide capture and sequestration (CCS) is expected to serve as an emission mitigation strategy, allowing certain industries to continue using fossil fuels by capturing their emissions and storing them underground (though notably, this bill also encompasses carbon dioxide-enhanced oil recovery, which state law explicitly prohibits in California). Finally, manufacturing of the specified chemicals is not clearly linked to carbon neutrality in the state. The state’s climate goals do not explicitly require an expansion of chemical manufacturing, though it is possible other developments will induce greater demand for certain chemicals.

1. Slow progress towards state climate goals. The pace at which California has approached its existing 2030 GHG reduction goal—40% below 1990 levels—gives some cause for concern. Over the last decade, statewide GHGs have fallen at roughly 1% per year (with a few notable exceptions). To achieve our 2030 goal, each of the next seven years will need to quadruple that average rate of reductions.

Moreover, CARB’s latest Scoping Plan Update stated that to be on track for California’s 2045 climate goal—carbon neutrality and at least an 85% GHG reduction—the state would in fact need to reach a 48% reduction by 2030. To reach that 2030 target, our state’s average rate of emission reductions will need to be quintupled for the next seven years.

Needless to say, quadrupling or quintupling the speed at which California cuts its emissions will rely on massive changes across the state’s economy. Those changes will necessarily include some (or likely all) of the sectors encompassed by SB 740.

Comments

1. Purpose of bill. According to the author, “As California and our federal government invests billions to move towards cleaner energy sources, it is important that we extend the protections provided for in SB 54 to the workforce in these new industries. SB 740 simply extends the worker and safety provisions in SB 54 provided to refineries to several other dangerous industries overseen by CARB, including lithium battery manufacturing, extraction and recycling, carbon capture, utilization and storage, chemical plants, biofuels and alternative fuels like hydrogen. SB 740 ensures that new professions in green industries are safe and have access to a high-quality skilled workforce.”
2. More information needed. The sectors included in SB 740 are crucial to meeting the state's climate goals. Careful consideration is needed to ensure that in applying these labor standards, we are not inadvertently delaying progress toward those goals. There are myriad ways to address this concern, but they all rely on information that seems to be unavailable at this time.

Does a skilled and trained workforce exist today that would be able to serve in all of the roles encompassed by this bill? Do all four of these industries contract out work that gains meaningful safety benefits by being done by skilled and trained workers? Would any of the affected existing industrial facilities be disrupted by applying STW requirements?

Ultimately, the problem this bill is trying to solve and the solutions it proffers all require more information. California's climate reality means we will need to build more infrastructure across much of the economy faster than we ever have before. The state's workforce is the vital backbone for achieving that. Even still, there are real limitations to when, where, and how many workers can be brought to bear to build and operate these industries.

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

According to the Senate Appropriations Committee, unknown but potentially very significant ongoing cost pressure (General Fund, Greenhouse Gas Reduction Fund [GGRF], other special funds, and bond funds) to provide funding for additional activities that could be needed as a result of SB 740 in order to meet existing climate goals. This bill would impose STW requirements on industries critical to our carbon neutrality and climate goals without putting in place any protections to ensure implementation would not delay, restrict, disrupt, or make more costly activities upon which our climate strategy relies. It is possible that the addition of STW requirements could lower outputs or reduce cost effectiveness of state climate investments, thereby requiring—if we are to achieve the same greenhouse gas (GHG) reductions by established deadlines—the state to backfill forgone GHG reductions that otherwise likely would have occurred absent this bill.

SUPPORT: (Verified 5/18/23)

State Building and Construction Trades Council (source)

Bricklayers and Allied Crafts Local 3

California Labor Federation, AFL-CIO

California Legislative Conference of Plumbing, Heating & Piping Industry

California State Association of Electrical Workers

California State Pipe Trades Council

Contra Costa Building and Construction Trades Council

District Council 16, International Union of Painters and Allied Trades

District Council 36, International Union of Painters and Allied Trades

District Council of Iron Workers of the State of California and Vicinity

Elevator Constructors Local 8

IBEW Local 302

IBEW Local 40

IBEW Local 428

IBEW Local 595

IBEW Local 617

IBEW Local Union 441

IBEW Local Union 569

IBEW Local Union 639

IBEW Local Union 952

International Brotherhood of Boilermakers Local 549

International Brotherhood of Boilermakers Local 92

International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers

International Union of Operating Engineers, Cal-Nevada Conference

Iron Workers Local 118

Iron Workers Local 229

Iron Workers Local 416

Iron Workers Local 433

Iupat Local 12

Los Angeles / Orange Counties Building and Construction Trades Council

Monterey/Santa Cruz Counties Building & Construction Trades Council

National Electrical Contractors Association

Northern California Sheet Metal Workers' Local 104

Opcmia Local 400

Painters & Drywall Finishers Local 913

Sacramento-sierra Building and Construction Trades Council

San Francisco Building and Construction Trades Council

Santa Clara and San Benito Counties Building and Construction Trades Council

UA Local 228

UA Local 582

United Association Local 159

United Association Local 230

United Association Local 246

United Association Local 250

United Association Local 345

United Association Local 38

United Association Local 398

United Association Local 447

United Association Local 460

United Association Local 467

United Association Local 483

United Association Local 484

United Union of Roofers, Waterproofers & Allied Workers Local 220

Western States Council Sheet Metal, Air, Rail and Transportation

OPPOSITION: (Verified 5/18/23)

United Steelworkers District 12

ARGUMENTS IN SUPPORT: According to the State Building and Construction Trade Council, “SB 740 will take the requirements for the use of a skilled and trained workforce in the traditional fuel sectors from SB 54 and apply them to new and emerging technologies. In doing so, SB 740 creates a viable connection for workers in the oil and gas industry to comparable jobs in the clean energy sector. It allows the skills these workers have honed over their careers in other industries to play a role in helping California meet the climate crisis. In addition, SB 740 will result in tens of thousands of new apprenticeship opportunities throughout California thanks to an increased demand for skilled and trained workers over the next several decades.

“By expanding the important safety protections of previous legislation to other industrial facilities overseen by the California Air Resource Board, namely carbon removal, hydrogen, biofuels, lithium, and chemical plants, SB 740 ensures that the deployment of new technologies is done safely. California's chances of meeting the climate crisis are highly dependent on our ability to do so in the safest, most productive manner. It is important that we meet the climate crisis, but it is equally important that we do so in a safe and responsible way. SB 740 empowers California to do both.”

ARGUMENTS IN OPPOSITION: According to the United Steelworkers District 12, “We urge your support of our amended language, in order to be inclusive of all union members who currently work in or are trained in these existing and further evolving areas, by incorporating clauses that encompass other highly skilled labor workforces that currently pay industry standard wages, and/or wage standards significantly above the California minimum wage for work within the green sectors referenced within SB 740.

“SB 740 strongly emphasizes the need to develop and utilize a “skilled and trained workforce” in order to ensure that the availability of well-paid jobs with good benefits in the developing clean-energy economy remains a priority in California. USW shares that same priority, and further, we want to ensure that all highly skilled workforces, like those covered by a collective bargaining agreement, are included in this bill’s definition of a “skilled and trained workforce”, so as to avoid unnecessarily narrow language that excludes a population of ready, willing, and skilled workers. We support the broader goals of the legislation, and firmly believe that any worker trained via a joint labor-management program or those graduates of a California college certificate program should be considered to be a part of the skilled and trained workforce. That is how we ensure growth and inclusivity of those workforces that exist now, and those of the future, with equity for all.”

Prepared by: Gabrielle Meindl & Eric Walters / E.Q. / (916) 651-4108

5/20/23 13:05:41

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 740 (Cortese) - Hazardous materials management: stationary sources: skilled and trained workforce

Bill Summary:

This bill would expand the skilled and trained workforce (STW) requirements for contracted workers per SB 54 (Hancock, Chapter 795, Statutes of 2013) from applying solely to petroleum refineries to additionally apply to specified facilities engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

Fiscal Impact:

• Unknown but potentially very significant ongoing cost pressure (General Fund, Greenhouse Gas Reduction Fund [GGRF], other special funds, and bond funds) to provide funding for additional activities that could be needed as a result of SB 740 in order to meet existing climate goals. This bill would impose STW requirements on industries critical to our carbon neutrality and climate goals without putting in place any protections to ensure implementation would not delay, restrict, disrupt, or make more costly activities upon which our climate strategy relies. It is possible that the addition of STW requirements could lower outputs or reduce cost effectiveness of state climate investments, thereby requiring—if we are to achieve the same greenhouse gas (GHG) reductions by established deadlines—the state to backfill forgone GHG reductions that otherwise likely would have occurred absent this bill.

Background:

California is particularly susceptible to the harmful effects of climate change, including an increase in extreme heat events, drought, wildfire, sea level rise, and more. According to the Fourth California Climate Change Assessment, by 2100, the average annual maximum daily temperature is projected to increase by 5.6-8.8 °F, water supply from snowpack is projected to decline by two-thirds, the average area burned in wildfires could increase by 77%, and 31-67% of Southern California beaches may completely erode without large-scale human intervention, all under business as usual and moderate GHG reduction pathways.

California is already experiencing the effects of climate change now. For example, eight out of the past ten years have had significantly below average precipitation. As of September 2020, the state has experienced a degree of wildfire activity that California’s Fourth Climate Change Assessment initially forecasted to not occur until 2050.

Establishment of GHG emission reduction targets. In 2006, the Legislature passed the California Global Warming Solutions Act of 2006 (Health and Safety Code §38500 et seq.), which is frequently referred to as AB 32. The act required ARB to determine the 1990 statewide GHG emission level and approve a statewide GHG emissions limit that is equivalent to that level, to be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB was also authorized to adopt a system of market-based declining annual aggregate emission limits for sources or categories of sources that emit GHGs. This program is known as the cap-and-trade program.

California Climate Investments (CCI) programs. Proceeds from the cap-and-trade program support a wide range of programs and projects to reduce GHG emissions and deliver economic, environmental, and public health co-benefits, including for the most disadvantaged communities, low-income communities, and low-income households. These programs include supporting incentives for zero-emission vehicles and equipment, increasing mobility through transit projects, diverting organic waste from landfills to composting, and more. CCI has also implemented a variety of nature-based solutions to sequester carbon and prevent GHG emissions through such strategies as protecting forests from catastrophic wildfire, supporting sustainable agricultural lands, and growing urban forests.

There are 73 CCI programs across California that are administered by 22 state agencies. In 2021, CCI programs implemented $2.1 billion in funding, bringing the cumulative total to almost $10.5 billion. According to ARB, investments implemented since the inception of CCI are expected to reduce 76.0 MMTCO₂e over project lifetimes. The average cost of GHG reductions under all CCI programs in 2021 was about $125 per MTCO2. Compared to 2019, the average cost-effectiveness of CCI decreased slightly, in part due to increases in programs offering technical assistance, outreach, research, and planning rather than direct emission reductions.

Other state investments for climate resilience. In addition to CCI programs, the Legislature has provided unprecedented funding levels from multiple sources to address climate issues. For example, the 2021-22 budget provided $369 million for climate change related activities from the General Fund. Moreover, this budget agreement included a commitment for $3.7 billion General Fund over three years for climate resilience investments such as cutting carbon emissions and catalyzing innovation.

Greenhouse Gas Reduction Fund (GGRF). A substantial portion of cap-and-trade auction proceeds—about two-thirds for the February 2022 auction—go to the Greenhouse Gas Reduction Fund (GGRF). As of early 2022, about $19.2 billion in cap-and-trade auction proceeds had gone to the fund, and as of November 2021, about $10.5 billion had been used in implemented projects.

Cost of Implementation Account (COIA). AB 32 authorized ARB to adopt a schedule of fees to be paid by sources of GHG emissions. These fees are used to fund costs directly related to state agencies’ development, administration, and implementation of AB 32 programs that reduce GHG emissions.

The total implementation expenses budgeted for fiscal year 2022-2023 are approximately $99 million. The total emissions subject to the COI Fee Regulation for data year 2020 were approximately 285 million MTCO2e. Thus, 2022 fees were approximately $0.34 per MTCO2e emitted.

Existing emission targets. The state achieved its 2020 GHG emissions reductions target of returning to 1990 levels 4 years earlier than mandated by AB 32. The state is currently implementing strategies in the 2017 Scoping Plan Update to further reduce its GHG emissions by 40% below 1990 levels by 2030.

Over the last decade, statewide GHGs have fallen at roughly 1% per year (with a few notable exceptions). To achieve our 2030 goal, each of the next seven years will need to quadruple that average rate of reductions. Moreover, CARB’s latest Scoping Plan Update stated that to be on track for California’s 2045 climate goal—carbon neutrality and at least an 85% GHG reduction—the state would in fact need to reach a 48% reduction by 2030. To reach that 2030 target, our state’s average rate of emission reductions will need to be quintupled for the next seven years.

Needless to say, quadrupling or quintupling the speed at which California cuts its emissions will rely on massive changes across the state’s economy. Those changes will necessarily include some (or likely all) of the sectors encompassed by SB 740.

According to the most recent Scoping Plan, “The scale of transformation needed over this decade to avoid the worst impacts of climate change and meet our ambitious climate goals is extraordinary. This is why Governor Newsom and the Legislature invested over $15 billion in climate action through the 2021– 2022 California Comeback Plan, and why the 2022–2023 budget marks the beginning of the California Climate Commitment—the governor’s multi-year plan to invest $54 billion in climate action”

Industries integral to state climate goals. Several industries are expected to expand significantly in the coming years in the pursuit of carbon neutrality. Hydrogen and biofuels are both expected to play important and varied roles in replacing fossil fuels’ current role in powering vehicles, industrial applications, and electricity provision. Carbon dioxide capture and sequestration (CCS) is also expected to serve as an emission mitigation strategy, allowing certain industries to continue using fossil fuels by capturing their emissions and storing them underground.

Proposed Law:

This bill would expand the STW requirements for contracted workers per SB 54 from applying solely to petroleum refineries to additionally apply to specified facilities engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in certain conditions. Specifically, this bill would:

1. Extend that STW requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.
   
2. Require an above-described stationary source to be considered when determining whether an existing apprenticeship program has sufficient capacity for apprentices in a geographic area.
   
3. By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, imposes a state-mandated local program.

Related Legislation:

SB 419 (Stern, 2021) would have required the use of a skilled and trained workforce for certain work performed on the state’s oil and gas wells and related production facilities. This bill died in the Assembly Natural Resources Committee.

SB 288 (Wiener, Chapter 200, Statutes of 2020) requires the use of a skilled and trained workforce for certain transit-related projects conducted by public agencies.

AB 3018 (Low, Chapter 882, Statutes of 2018) enhances compliance with skilled and trained workforce rules.

SB 693 (Hueso, Chapter 774, Statutes of 2016) consolidates the “skilled and trained workforce” requirements of various provisions of existing law related to alternative construction delivery methods and defined the terms of those requirements.

SB 54 (Hancock, Chapter 795, Statutes of 2013) introduced the skilled and trained workforce requirement and applied it to construction and related work performed at specified petroleum refineries and petrochemical manufacturing facilities.

Staff Comments:

Ensuring that professions in green industries are safe and have access to a high-quality skilled workforce is a very laudable goal. Furthermore, the state’s workforce is essential for all our climate-related efforts. Protecting workers in these critical and rapidly expanding industries is an important Legislative priority.

Similarly, the Legislature’s ambitious goals for GHG emission reductions coupled with the unprecedented amounts of funding provided to meet them illustrate how highly the Legislature prioritizes bold and expedient climate action. Going forward, the state will need to maintain or increase funding for climate action in order to mitigate the worst climate change impacts and protect vulnerable populations disproportionately affected by climate change.

This bill would add STW requirements on industries we rely on heavily in pursuit of our climate goals. Given the import and gravity of both efforts to protect workers and to mitigate climate change, policy shifts within these areas warrant careful consideration to ensure protection of our progress. Adding STW requirements to climate activities creates the potential for any problems that arise to affect climate progress. As noted in the Senate Environmental Quality Committee analysis, “There are myriad ways to address this concern, but they all rely on information that seems to be unavailable at this time.”

The possible outcomes of applying labor standards are unknown. It is unclear how such requirements would affect the labor market supply of workers and the ability to build. No information is available on whether a skilled and trained workforce exists today that could serve in all the roles encompassed by this bill. There is significant uncertainty regarding impacts on existing industrial facilities or whether the bill could cause facility disruptions. Overall, no data is available to help understand what implementation would actually look like. For example, it is unclear to staff how the 100% skilled and trained workforce requirements would be applied without any phase-in period.

Without any information to go off of, it seems at least reasonably likely that the bill’s requirements could result in some amount of delay, disruption, unexpected issues, foregone GHG reductions, and/or limitations on when, where, and how workers would operate the affected industries. Should such limitations materialize, it could lower overall outputs—a smaller reduction of GHGs—or require additional resources for the same results we otherwise would have gotten.

This might not necessarily be the case, but it is impossible to know one way or the other without additional information. Perhaps most importantly, there is no evidence suggesting we are capable, without any available information, of thoughtfully and correctly applying STW requirements to critical components of our climate strategy in such a way that there would be no chance of inadvertently delaying progress toward California’s emission reduction, carbon neutrality, and climate change goals.

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SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2023 - 2024 Regular

Bill No: SB 740

SUBJECT: Hazardous materials management: stationary sources: skilled and trained workforce

DIGEST: This bill expands the skilled and trained workforce (STW) requirements for contracted workers per SB 54 (Hancock, Chapter 795, Statutes of 2013) from applying solely to petroleum refineries to additionally apply to specified facilities engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.

ANALYSIS:

Existing federal law:

1. Defines a stationary source as unmoving structures or activities that are capable of releasing a regulated substance or other extremely hazardous substance into the ambient air, and requires specified entities to prepare a risk management plan (RMP) (Code of Federal Regulations Title 40 §68.3)
   

Existing state law:

1. Establishes an accidental release prevention program for the state. Under that law, stationary sources subject to the accidental release prevention program may be required to prepare and submit a RMP to prevent accidental releases of certain substances. (Health and Safety Code (HSC) §25531 et seq.)
   
2. Requires an owner or operator of a stationary source that is engaged in certain petroleum-related activities, and with one or more covered processes that require the preparation and submission of an RMP, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source to require that its contractors and any subcontractors use a STW to perform all onsite work within an apprenticeable occupation in the building and construction trades. (HSC § 25536.7)
   
3. Defines “skilled and trained workforce” to include, among other criteria, skilled journeypersons who are paid at least a rate equivalent to the applicable prevailing hourly wage rate. (HSC § 25536.7)
   
4. Provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment. (Labor Code § 3075)
   
5. Requires apprentice training needs in the building and construction trades to be deemed to justify a new apprentice program if existing apprenticeship programs are not filling requests for apprentices in refineries subject to skilled-and-trained workforce requirements. (HSC § 25536.7)

This bill:

1. Extends that STW requirement to contracts awarded, extended, or renewed on or after January 1, 2024, by an owner or operator of a stationary source that is engaged in manufacturing hydrogen, biofuels, or certain specified chemicals, or in capturing, sequestering, or using carbon dioxide in specified conditions.
   
2. Requires an above-described stationary source to be considered when determining whether an existing apprenticeship program has sufficient capacity for apprentices in a geographic area.
   
3. By expanding the scope of a crime, and by extending the laws enforced by uniform program agencies to additional stationary source owners or operators and thereby imposing additional duties, imposes a state-mandated local program.

Background

1. The California Accidental Release Prevention (CalARP) program. The purpose of the CalARP program is to prevent accidental releases of substances that can cause serious harm to the public and the environment, and to minimize the damage if releases do occur. CalARP requires certain facilities (referred to as “stationary sources”) that handle, manufacture, use, or store any regulated substances above threshold quantities to take actions to proactively prevent and prepare for accidental releases. Facilities subject to CalARP requirements must submit a Risk Management Plan (RMP).

The California Environmental Protection Agency (CalEPA) oversees the implementation of the CalARP program at the state level, while Certified Unified Program Agencies (CUPAs) and/or Participating Agencies implement the CalARP program at the local level. The CalARP program is designed for the CUPA to work directly with the regulated businesses. The CUPAs determine the level of detail in the RMPs, review the RMPs, conduct facility inspections, and provide public access to most of the information.

1. What is a Risk Management Plan? A RMP is a document prepared by the owner or operator of a stationary source containing detailed information including, but not limited to:
   • Regulated substances held onsite at the stationary source;
   • Offsite consequences of an accidental release of a regulated substance;
   • The accident history at the stationary source;
   • The emergency response program for the stationary source;
   • Coordination with the local emergency responders;
   • Hazard review or process hazard analysis;
   • Operating procedures at the stationary source;
   • Training of the stationary source’s personnel;
   • Maintenance and mechanical integrity of the stationary source’s physical plant; and
   • Incident investigation.
     
2. Who is required to submit a Risk Management Plan? An owner or operator of a stationary source that has more than a threshold quantity of a regulated substance in a process is required to complete and submit an RMP.
   
3. Skilled and Trained Workforce and Contractors. Over the last decade, the Legislature has passed and the Governor has signed into law numerous bills requiring the use of a STW to perform construction, alteration, demolition, installation, repair, and maintenance work on various types of public and private sector construction projects. Currently, there are over 15 STW statutes in various state codes, each of which applies to different types of projects.
   
   For the purposes of this bill, STW requirements are applied when the owner or operator of a specified stationary source enters into a contract for the performance of construction, alteration, demolition, installation, repair, or maintenance work. As to what proportion of that work is done by contractors (as opposed to full-time employees), the author states that, “During construction, nearly all of the workers on a job are contracted out. During scheduled maintenance, the majority of workers brought in to perform the maintenance are employees of contractors rather than employees of the industrial facility. In-house employees typically handle routine maintenance procedures in the facilities, but anything significant is typically contracted out to industrial contractors.”
   
4. Impact on worker supply and ability to build. A relevant policy question pertaining to STW requirements is how such requirements affect the labor market supply of workers and the ability to build. According to an April 15, 2021, Senate Labor Committee analysis, “Impacts of STW requirements on the supply of ‘skilled and trained’ labor likely depend on the region where an affected construction project is located, the business cycle, the type of project, and how long STW requirements have been in place.

“Demand for all construction labor, not just ‘skilled and trained’ labor fluctuates cyclically and by economic region. In pro-cyclical periods the demand for construction labor may often outpace supply while in trough periods supply may exceed demand. The supply of ‘skilled and trained’ labor typically grows as demand for it grows but there may initially be a supply lag...”

The state’s apprenticeship programs play a crucial role in training and providing the supply of skilled and trained labor. They would be needed to provide the labor required for the industries included under SB 740, and according to the author, “Building Trades apprenticeship programs have the ability to ramp up training at a nearly unbridled pace. These programs already maintain waiting lists. The only thing constraining the number of apprentices starting in these programs statewide is a consistent connection to work. The Building Trades programs work hard to make sure the number of apprentices brought into their programs each year is reflective of the demands of the industry both in the short term and in the long term. Simply put, when these programs know there is a consistent connection to work for a larger pool of workers, they will start and graduate more apprentices from their programs.”

1. Improving public and worker safety at oil refineries. On August 6, 2012, the Chevron refinery in Richmond experienced a catastrophic pipe failure, releasing high-temperature flammable fluid that partially vaporized into a large cloud. The vapor cloud engulfed 19 employees. All 19 employees narrowly avoided serious injury or death. The vapor cloud spread well beyond the refinery, causing 15,000 East Bay residents to seek medical attention.
   
   Multiple agencies opened investigations in response to the incident and then-Governor Brown formed an Interagency Working Group on Refinery Safety. The Working Group concluded that refinery safety can and must be improved.
   
   “Government agencies and industry can work together to develop and implement a culture that fosters safety, including stronger accident prevention and hazard reduction measures. Government agencies can improve interagency coordination, emergency response procedures, and communication and outreach to the public.”
   
2. Stationary sources: Skilled Workforce. In response to these events, the Legislature passed and the Governor signed SB 54 (Hancock, Chapter 795, Statutes of 2013) which requires owners and or operators of stationary sources of specified petroleum refineries and petrochemical manufacturing facility owners or operators contracting for construction and other related maintenance to require that their contractors and subcontractors use a skilled and trained workforce to perform all work done within apprenticeable occupations in the building and construction trades. Additionally, the bill requires these workers must be paid at least a rate equivalent to the applicable prevailing hourly wage rate.
   
3. Four industries integral to the state’s climate goals. Under AB 1279 (Muratsuchi, Chapter 337, Statutes of 2022), it is the policy of California that the state be carbon neutral as soon as possible, but no later than 2045, by reducing its greenhouse gas (GHG) emissions by at least 85%. Achieving this goal will require massive and unprecedented shifts in how the state’s economy is powered, as well as the rapid development of nascent technologies. Moreover, “carbon neutrality” is defined as a state where carbon emissions are equal to carbon removals; although engineered carbon removal does not exist in California today, the industry is predicted to play a role in negating remaining emissions and achieving carbon neutrality.
   
   Looking specifically at the four industries included in SB 740, they are mostly expected to expand significantly in the coming years in the pursuit of carbon neutrality. Hydrogen and biofuels are both expected to play important and varied roles in replacing fossil fuels’ current role in powering vehicles, industrial applications, and electricity provision. Carbon dioxide capture and sequestration (CCS) is expected to serve as an emission mitigation strategy, allowing certain industries to continue using fossil fuels by capturing their emissions and storing them underground (though notably, this bill also encompasses carbon dioxide-enhanced oil recovery, which state law explicitly prohibits in California). Finally, manufacturing of the specified chemicals is not clearly linked to achieving carbon neutrality in the state. The state’s climate goals do not explicitly require an expansion of chemical manufacturing, though it is possible other developments will induce greater demand for certain chemicals.
   
4. Slow progress towards state climate goals. The pace at which California has approached its existing 2030 GHG reduction goal—40% below 1990 levels—gives some cause for concern. Over the last decade, statewide GHGs have fallen at roughly 1% per year (with a few notable exceptions). To achieve our 2030 goal, each of the next seven years will need to quadruple that average rate of reductions.
   
   Moreover, CARB’s latest Scoping Plan Update stated that to be on track for California’s 2045 climate goal—carbon neutrality and at least an 85% GHG reduction—the state would in fact need to reach a 48% reduction by 2030. To reach that 2030 target, our state’s average rate of emission reductions will need to be quintupled for the next seven years.
   
   Needless to say, quadrupling or quintupling the speed at which California cuts its emissions will rely on massive changes across the state’s economy. Those changes will necessarily include some (or likely all) of the sectors encompassed by SB 740.
   

Comments

1. Purpose of bill. According to the author, “As California and our federal government invests billions to move towards cleaner energy sources, it is important that we extend the protections provided for in SB 54 to the workforce in these new industries. SB 740 simply extends the worker and safety provisions in SB 54 provided to refineries to several other dangerous industries overseen by CARB, including lithium battery manufacturing, extraction and recycling, carbon capture, utilization and storage, chemical plants, biofuels and alternative fuels like hydrogen. SB 740 ensures that new professions in green industries are safe and have access to a high-quality skilled workforce.”
   
2. More information needed. The sectors included in SB 740 are crucial to meeting the state's climate goals. Careful consideration is needed to ensure that in applying these labor standards, we are not inadvertently delaying progress toward those goals. There are myriad ways to address this concern, but they all rely on information that seems to be unavailable at this time.
   
   Does a skilled and trained workforce exist today that would be able to serve in all of the roles encompassed by this bill? It is unclear.
   
   Do all four of these industries contract out work that gains meaningful safety benefits by being done by skilled and trained workers? It is unclear.
   
   Would any of the affected existing industrial facilities be disrupted by immediately applying 100% skilled and trained workforce requirements without any phase-in period? It is unclear.
   
   Ultimately, the problem this bill is trying to solve and the solutions it proffers all require more information. California's climate reality means we will need to build more infrastructure across much of the economy faster than we ever have before. The state's workforce is the vital backbone for achieving that. Even still, there are real limitations to when, where, and how many workers can be brought to bear to build and operate these industries.
   

USW requested amendments. the members of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) in District 12 have an oppose unless amended position. They are seeking amendments that they believe would make the bill more “inclusive of all union members who currently work in or are trained in these existing and further evolving areas, by incorporating clauses that encompass other highly skilled labor workforces that currently pay industry standard wages, and/or wage standards significantly above the California minimum wage for work within the green sectors referenced within SB 740.”

The proposed amendment would expand the type of workforce an owner or operator of a specified stationary source is required to use when contracting out specified work for the industries identified in the bill to include, “a workforce trained through a joint labor-management program or California community college certificate program.”

While this appears to be a commonsense solution, the complexities of apprenticeship programs and other such training programs may make this language unworkable. To be accredited by the state, an apprenticeship program must satisfy a litany of requirements for the curriculum, on-the-job training, and design of the program itself. While other training programs (such as a joint-labor management program as proposed by USW) do include many of the same considerations, it is ultimately a difficult comparison to make.

The author and sponsors contend that the safety benefits derived by employing a skilled and trained workforce in these industries are substantial. If it is true that workers trained through a joint labor-management program do not bring the same safety practices to a workplace, then adding them would be an erosion of the STW standard in the bill. However, it would still likely be a stronger standard what is in place under existing law.

Staff has not been provided the information to be able to compare the two training programs. Indeed, the Division of Apprenticeship Standards may be the most appropriate entity to determine which apprenticeship standards are best for these industries.

To address these stakeholder concerns, the committee may wish to amend the bill to:

• 1. Include a workforce trained through a joint labor-management program as suggested above; and
  2. Specify that if the Administrator of Apprenticeship determines that a joint labor-management program does not include substantially equivalent health and safety training requirements to the requirements imposed on the skilled and trained workforce, then these provisions will no longer be applicable.

Related/Prior Legislation

SB 419 (Stern, 2021) would have required the use of a skilled and trained workforce for certain work performed on the state’s oil and gas wells and related production facilities. This bill died in the Assembly Natural Resources Committee.

SB 288 (Wiener, Chapter 200, Statutes of 2020) requires the use of a skilled and trained workforce for certain transit-related projects conducted by public agencies.

AB 3018 (Low, Chapter 882, Statutes of 2018) enhances compliance with skilled and trained workforce rules.

SB 693 (Hueso, Chapter 774, Statutes of 2016) consolidates the “skilled and trained workforce” requirements of various provisions of existing law related to alternative construction delivery methods and defined the terms of those requirements.

SB 54 (Hancock, Chapter 795, Statutes of 2013) introduced the skilled and trained workforce requirement and applied it to construction and related work performed at specified petroleum refineries and petrochemical manufacturing facilities.

SOURCE:

State Building and Construction Trade Council

SUPPORT:

Bricklayers and Allied Crafts Local 3

California Labor Federation, Afl-cio

California State Association of Electrical Workers

California State Pipe Trades Council

Contra Costa Building and Construction Trades Council

District Council 16, International Union of Painters and Allied Trades

District Council 36, International Union of Painters and Allied Trades

District Council of Iron Workers of The State of California and Vicinity

Elevator Constructors Local 8

IBEW Local 302

IBEW Local 40

IBEW Local 428

IBEW Local 595

IBEW Local 617

IBEW Local Union 441

IBEW Local Union 569

IBEW Local Union 639

IBEW Local Union 952

International Brotherhood of Boilermakers Local 549

International Brotherhood of Boilermakers Local 92

International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers

International Union of Operating Engineers, Cal-nevada Conference

Iron Workers Local 229

Iron Workers Local 416

Iron Workers Local 433

Iupat Local 12

Los Angeles / Orange Counties Building and Construction Trades Council

Monterey/santa Cruz Counties Building & Construction Trades Council

Northern California Sheet Metal Workers' Local 104

Opcmia Local 400

Painters & Drywall Finishers Local 913

Sacramento-sierra Building and Construction Trades Council

San Francisco Building and Construction Trades Council

Santa Clara and San Benito Counties Building and Construction Trades Council

State Building and Construction Trades Council of Ca

Ua Local 228

Ua Local 582

United Association Local 159

United Association Local 230

United Association Local 246

United Association Local 250

United Association Local 345

United Association Local 38

United Association Local 398

United Association Local 447

United Association Local 460

United Association Local 467

United Association Local 483

United Association Local 484

United Union of Roofers, Waterproofers & Allied Workers Local 220

Western States Council Sheet Metal, Air, Rail and Transportation

OPPOSITION:

United Steelworkers District 12

ARGUMENTS IN SUPPORT:

According to the State Building and Construction Trade Council, “SB 740 will take the requirements for the use of a skilled and trained workforce in the traditional fuel sectors from SB 54 and apply them to new and emerging technologies. In doing so, SB 740 creates a viable connection for workers in the oil and gas industry to comparable jobs in the clean energy sector. It allows the skills these workers have honed over their careers in other industries to play a role in helping California meet the climate crisis. In addition, SB 740 will result in tens of thousands of new apprenticeship opportunities throughout California thanks to an increased demand for skilled and trained workers over the next several decades.

“By expanding the important safety protections of previous legislation to other industrial facilities overseen by the California Air Resource Board, namely carbon removal, hydrogen, biofuels, lithium, and chemical plants, SB 740 ensures that the deployment of new technologies is done safely. California's chances of meeting the climate crisis are highly dependent on our ability to do so in the safest, most productive manner. It is important that we meet the climate crisis, but it is equally important that we do so in a safe and responsible way. SB 740 empowers

California to do both.”

ARGUMENTS IN OPPOSITION:

According to the members of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) District 12, “We urge your support of our amended language, in order to be inclusive of all union members who currently work in or are trained in these existing and further evolving areas, by incorporating clauses that encompass other highly skilled labor workforces that currently pay industry standard wages, and/or wage standards significantly above the California minimum wage for work within the green sectors referenced within SB 740.

“SB 740 strongly emphasizes the need to develop and utilize a “skilled and trained workforce” in order to ensure that the availability of well-paid jobs with good benefits in the developing clean-energy economy remains a priority in California. USW shares that same priority, and further, we want to ensure that all highly skilled workforces, like those covered by a collective bargaining agreement, are included in this bill’s definition of a “skilled and trained workforce”, so as to avoid unnecessarily narrow language that excludes a population of ready, willing, and skilled workers. We support the broader goals of the legislation, and firmly believe that any worker trained via a joint labor-management program or those graduates of a California college certificate program should be considered to be a part of the skilled and trained workforce. That is how we ensure growth and inclusivity of those workforces that exist now, and those of the future, with equity for all.”

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