Current law requires that at least prevailing wages be paid to all workers employed on “public works” projects. The prevailing wage is higher than the minimum wage and varies by region and craft. AB 2765 expands the definition of “public works,” for the purposes of payment of the prevailing wage, to include work on charter schools, paid for using proceeds from a conduit revenue bond. For this purpose, “public works” is expanded to also mean “any construction, alteration, demolition, installation, or repair work done under private contract on a project for a charter school, when the project is paid for, in whole or in part, with the proceeds of conduit revenue bonds, as defined in Section 5870 of the Government Code, issued on or after January 1, 2021, by a public agency.”
According to the authors of the bill, conduit financing is a mechanism of borrowing whereby a conduit issuer, typically a governmental agency, acts as a bridge between investors and the borrower. Where a government agency acts as the bridge, the project is effectively subsidized by public funds and, therefore, qualifies as a “public works” for this purpose.
(AB 2765 adds Section 1720.8 to the Labor Code.)