AB 852 requires health facility construction projects that use tax-exempt public financing to pay the prevailing wage.
SACRAMENTO – Today, Assemblywoman Autumn R. Burke (D-Los Angeles) introduced AB 852 to ensure construction workers are paid the prevailing wage on publicly-subsidized private development projects. The bill expands the definition of “public works” to include hospital or health care facility construction projects using a tax-exempt conduit revenue bond.
“If you’re going to use tax-exempt financing, you need to pay the prevailing wage,” said Assemblymember Burke. “We have high standards for the construction of health facilities in California, and we all expect that the work will be done by skilled and qualified workers that are paid a living wage.”
"This legislation closes a loophole in state law by requiring healthcare companies electing to receive tax-exempt, low interest rate conduit bond financing from a public agency to pay construction workers the prevailing wage and therefore attract the most competent and skilled local workforce to build these complex medical facilities,” said Robbie Hunter, President of State Building and Construction Trades Council of California. “We thank Assemblywoman Burke for introducing this important legislation that will enhance quality construction of medical facilities throughout California."
Conduit revenue bond financing is a method by which the public subsidizes a private development project, with the public entity acting as the “issuer” of the bonds. The process allows the interest payments to be tax-exempt to the bondholder, resulting in a lower cost of borrowing. Under existing law, workers employed on most public works projects in California must be paid the applicable prevailing wage.
AB 852 is sponsored by the State Building and Construction Trades Council of California. If passed by the legislature and signed into law by Governor Brown, the provisions of the bill go into effect on January 1st, 2016.