Report Title:

Public Works; Wages and Hours

Description:

Adds projects funded by special purpose revenue bonds to public work projects that are required to pay prevailing wages according to the Little Davis Bacon Act. Specifies that the prevailing wage requirement shall only apply to projects funded by special purpose revenue bonds authorized by the legislature after 1/1/06. (SB935 CD1)

THE SENATE

S.B. NO.

935

TWENTY-THIRD LEGISLATURE, 2005

S.D. 1

STATE OF HAWAII

H.D. 1


C.D. 1

A BILL FOR AN ACT

 

Relating to public works.

 

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

SECTION 1. Section 104-1, Hawaii Revised Statutes, is amended to read as follows:

"§104-1 Definitions. As used in this chapter, the following words and phrases shall have the following meanings:

[(1)] "Basic hourly rate" means the hourly wage paid to a laborer or mechanic for work performed during nonovertime hours, but shall not include the cost to an employer of furnishing fringe benefits whether paid directly or indirectly to the laborer or mechanic as provided in [paragraph (7);] the definition of "wages", "rate of wages", "wage rates", "minimum wages" and "prevailing wages".

[(2)] "Construction" includes alteration, repair, painting and decorating[;].

"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.

[(3)] "Department" means the department of labor and industrial relations[;].

[(4)] "Director" means the director of labor and industrial relations of the State[;].

[(5)] "Governmental contracting agency" means the State, any county and any officer, bureau, board, commission, or other agency or instrumentality thereof; includes any person or entity that causes either directly or indirectly the building or development of a public work. For the purposes of special purpose revenue bond funded projects entered into under chapter 39A, the department of accounting and general services shall be the governmental entity responsible for the collection and maintenance of the certified copies of all payrolls for a special purpose revenue bond funded project.

[(6)] "Overtime compensation" means compensation based on one and one-half times the laborers or mechanics basic hourly rate of pay plus the cost to an employer of furnishing a laborer or mechanic with fringe benefits as described [paragraph (7);] in the definition of "wages", "rate of wages", "wage rates", "minimum wages" and "prevailing wages".

"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.

"Special purpose revenue bonds" shall have the same meaning as defined in chapter 39A.

[(7)] "Wages", "rate of wages", "wage rates", "minimum wages" and "prevailing wages" mean the basic hourly rate and the cost to an employer of furnishing a laborer or mechanic with fringe benefits, including but not limited to health and welfare benefits, vacation benefits, and pension benefits, whether paid directly or indirectly to the laborer or mechanic."

SECTION 2. Section 104-2, Hawaii Revised Statutes, is amended to read as follows:

"§104-2 Applicability; wages, hours, and other requirements. (a) This chapter shall apply to every contract in excess of $2,000 for construction of a public work project [to which a governmental contracting agency is a party]; provided that this chapter shall not apply to [experimental]:

(1) 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[.]; and

(2) Improvements made by an individual homeowner to the homeowner's existing residence.

(b) This chapter shall also apply to every contract in excess of $2,000 for construction of a public work project where the funds utilized by the project party can be traced to the proceeds of special purpose revenue bonds authorized for issuance by the legislature after January 1, 2006, and issued as provided under chapter 39A. The department of budget and finance shall inform project parties, and be responsible for the inclusion of language in the project agreement to be executed under chapter 39A, of the necessity for the payment of prevailing wages to the laborers and mechanics working on the construction project to be executed by the project party under chapter 39A.

For the purposes of subsection (a) and 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.

"Project agreement" shall have the same meaning as defined under chapter 39A.

"Project party" shall have the same meaning as defined under chapter 39A.

"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, with the exception of improvements made by an individual homeowner to the homeowner's existing residence, 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[.] or from special purpose revenue bonds."

[(b)] (c) 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;

(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.

[(c)] (d) No laborer or mechanic employed on the job site of any public work of the State or any political subdivision thereof shall be permitted or required to work on Saturday, Sunday, or a legal holiday of the State or in excess of eight hours on any other day unless the laborer or mechanic receives overtime compensation for all hours worked on Saturday, Sunday, and a legal holiday of the State or in excess of eight hours on any other day. For purposes of determining overtime compensation under this subsection, the basic hourly rate of any laborer or mechanic shall not be less than the basic hourly rate determined by the director to be the prevailing basic hourly rate for corresponding classes of laborers and mechanics on projects of similar character in the State.

[(d)] (e) The contractor or the contractor's subcontractor shall pay all mechanics and laborers employed on the job site, unconditionally and not less often than once a week, and without deduction or rebate on any account, except as allowed by law, the full amounts of their wages including overtime, accrued to not more than five working days prior to the time of payment, at wage rates not less than those deemed to be prevailing, regardless of any contractual relationship which may be alleged to exist between the contractor or subcontractor and the laborers and mechanics. The rates of wages to be paid shall be posted by the contractor in a prominent and easily accessible place at the job site, and a copy of the rates of wages required to be posted shall be given to each laborer and mechanic employed under the contract by the contractor at the time each laborer and mechanic is employed, except that where there is a collective bargaining agreement the contractor does not have to provide the contractor's employees the wage rate schedules.

[(e)] (f) The governmental contracting agency may withhold from the contractor so much of the accrued payments as the governmental contracting agency may consider necessary to pay to the laborers and mechanics employed by the contractor or any subcontractor on the job site the difference between the prevailing wages and the wages received and not refunded by the laborers and mechanics.

[(f)] (g) Every contract in excess of $2,000 for construction of a public work project and the specifications for such contract shall include provisions that set forth the requirements of subsections (a) to (e); provided that failure by the contracting agency to include those provisions in the contract or specifications shall not be a defense of the contractor or subcontractor for noncompliance with the requirements of this chapter."

SECTION 3. Section 444-16.5, Hawaii Revised Statutes, is amended to read as follows:

"§444-16.5 Bond. The contractors license board may require each licensee, applicant, individual or corporate, who is a specialty contractor to put up bond in the sum of not less than $5,000 executed by the licensee or applicant as principal and by a surety company authorized to do business in the State as surety.

The board may require each licensee, applicant, individual or corporate, who is a general contractor to put up a bond in the sum of not less than $5,000 executed by the licensee or applicant as principal and by a surety company authorized to do business in the State as surety.

The board, in exercising its discretion shall take into consideration the licensee's or applicant's financial condition and experience in the field.

The bond shall be in such form as the board may prescribe, conditioned upon the payment of wages, as defined in section [104-1(6),] 104-1, to the employees of the contractor or any other person or entity entitled to such wages when due, and giving employees or any other person or entity entitled to such wages who have not been paid a right of action on the bond in their own names; and upon the honest conduct of the business of the licensee, and upon the right of any person injured or damaged by any wrongful act of the licensee to bring an action on the bond; provided that any claim for wages shall have priority over all other claims."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2005.