Report Title:

Prevailing Wages; Applicability; Public Work Projects

Description:

Provides for the manner in which the prevailing wages for laborers and mechanics on public work projects are to be established. Expands the definition of public works to include certain private construction contracts. (SD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

1214

TWENTY-THIRD LEGISLATURE, 2005

H.D. 2

STATE OF HAWAII

S.D. 2


 

A BILL FOR AN ACT

 

relating to prevailing wages.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 104-2, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) This chapter shall apply to every contract in excess of $2,000 for construction of a public work project [to which] under the authority of a governmental contracting agency [is a party]; provided that this chapter shall not apply to experimental and demonstration housing developed pursuant to section 46-15 or housing developed pursuant to chapter 201G if the cost of the project is less than $500,000 and the eligible bidder or eligible developer is a private nonprofit corporation.

For the purposes of this subsection:

"Contract" includes but is not limited to any agreement, purchase order, or voucher in excess of $2,000 for construction of a public work project.

"Governmental contracting agency" includes any person or entity that causes either directly or indirectly the building or development of a public work.

"Party" includes eligible bidders for and eligible developers of any public work and any housing under chapter 201G; provided that this subsection shall not apply to any housing developed under section 46-15 or chapter 201G if the entire cost of the project is less than $500,000 and the eligible bidder or eligible developer is a private nonprofit corporation.

"Public work" means any project, including development of any housing pursuant to section 46-15 or chapter 201G, and development, construction, renovation, and maintenance related to refurbishment of any real or personal property, where the funds or resources required to undertake the project are to any extent derived either directly or indirectly from public revenues of the State or any county, or from the sale of securities or bonds whose interest or dividends are exempt from state or federal taxes[.]; including where the project is:

(1) Subsidized through the receipt of a state tax credit of more than $5,000 per tax year; provided that the director of taxation shall state in the tax code, and develop forms for a requirement that construction project owners declare an intent to claim the applicable tax credit prior to the start of construction, the project owners' understanding of the requirement to comply with the provisions of this chapter, and the project owners' understanding that claiming the tax credit shall require their certification that prevailing wages were paid as established under this chapter. The department of taxation shall notify the department of accounting and general services, which shall be responsible for receipt of certified payrolls. If it is determined that a recipient of a tax credit did not pay prevailing wages, fifty per cent of the tax credit shall be recaptured, and where the tax credit is not yet received, it shall be denied;

(2) Subsidized through the receipt of a county tax exemption; or

(3) Undertaken through the use of state or county land; provided that a lease agreement for state or county land, or for structures to be used by the State or a county, shall include provisions that require:

(A) Compliance with this chapter; and

(B) Certified payrolls to be submitted to the department of accounting and general services;

provided further that copies of the lease agreement shall be filed with the department of labor and industrial relations and the department of accounting and general services, which shall be responsible for the receipt of certified payrolls.

"Public work" shall also mean a construction contract between private persons if more than twenty-five per cent of the assignable square feet of the property is leased for use by the State, its political subdivisions, or any agency of the State or county for its use, whether or not the property is privately owned and either:

(1) The lease agreement is entered into prior to the construction contract becoming effective; or

(2) Construction work is performed according to a plan, specifications, or criteria established by the State, its political subdivisions, or any agency of the State or county.

(b) Every laborer and mechanic performing work on the job site for the construction of any public work project shall be paid no less than prevailing wages; provided that:

(1) The prevailing wages shall be [not less than the wages that the director of labor and industrial relations, under the rules, shall have determined to be the prevailing wages for corresponding classes of laborers and mechanics on projects of similar character in the State;] established by the director as the sum of the basic hourly rate and the cost to an employer of providing a laborer or mechanic with fringe benefits. In making prevailing wage determinations, the following shall apply:

(A) The director shall make separate findings of:

(i) The basic hourly rate; and

(ii) The rate of contribution or cost of fringe benefits paid by the employer when the payment of the fringe benefits by the employer constitutes a prevailing practice. The cost of fringe benefits shall be reflected in the wage rate schedule as an hourly rate; and

(B) The rates of wages that the director shall regard as prevailing in each corresponding classification of laborers and mechanics shall be the rate of wages paid to the greatest number of those employed in the State in the corresponding classes of laborers or mechanics on projects that are similar to the contract work;

(2) The prevailing wages shall be not less than the wages payable under federal law to corresponding classes of laborers and mechanics employed on public works in the State that are prosecuted under contract or agreement with the government of the United States; and

(3) Notwithstanding the provisions of the original contract, the prevailing wages shall be periodically adjusted during the performance of the contract in an amount equal to the change in the prevailing wage as periodically determined by the director."

SECTION 2. This Act does not affect public works projects, as defined in this Act, that are being or have been planned, contracted for, or otherwise commenced based on or in reliance on state law providing a tax credit, or county ordinance providing a tax exemption, or a government lease of land in existence before the effective date of this Act.

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2050.