Provides for the manner in which the prevailing wages for laborers and mechanics on public work projects is to be established. (SB962 HD2)

A BILL FOR AN ACT

SECTION 1. Chapter 104, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§104- Indirect public works project; prevailing wages certification; compliance. (a) Prior to the start of construction, a construction project owner shall file with the department of taxation or county department on forms prepared by the department of taxation or county department, the type and amount of subsidy claimed or expected to be claimed by the owner of the project from the use of a tax credit or exemption, acknowledging that the project owner understands that claiming the tax credit or exemption requires:

The department of taxation or applicable county department 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, the department of taxation shall recapture one hundred per cent of the tax credit that was claimed, and deny the tax credit not yet received. The department of taxation may waive the recapture or denial if it determines that the failure to pay prevailing wages was unintentional and not wilful.

(b) A construction project owner who undertakes a construction project on state or county land, or for structures to be used by the State or a county, shall sign a lease agreement that includes provisions that require:

(c) The department of labor and industrial relations shall monitor every indirect public works project to ensure compliance with this chapter. If the department finds that any laborer or mechanic employed on a job site of an indirect public works project is being paid wages at a rate less than the rate required by the contract or the specifications, or has not received the laborer's or mechanic's full overtime compensation, the department may, by written notice to the contractor, terminate the contractor's right, or the right of any subcontractor, to proceed with the work or part of the work in which the required wages or overtime compensation have not been paid and may complete such work or part of the work by contract or otherwise, and the contractor and the contractor's sureties shall be liable to the department for any excess costs occasioned thereby.

(d) If the department of labor and industrial relations finds that any laborer or mechanic employed on the job site by the contractor or any subcontractor has been or is being paid wages at a rate less than the required rate by the contract or the specifications, or has not received the laborer's or mechanic's full overtime compensation, the department may, by written notice to the contractor, terminate the contractor's right, or the right of any subcontractor, to proceed with the work or part of the work in which the required wages or overtime compensation have not been paid and may complete such work or part of the work by contract or otherwise, and the contractor and the contractor's sureties shall be liable to the governmental contracting agency for any excess costs occasioned thereby."

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;] works and indirect public works projects; 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.]

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

(c) No laborer or mechanic employed on the job site of any public [work] works project of the State or any political subdivision thereof or indirect public works project 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) The contractor or the contractor's subcontractor shall pay all mechanics and laborers employed on the job site[,] of every public works or indirect public works project, 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) 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) Every contract in excess of $2,000 for construction of a public [work] works or indirect public works project and the specifications for such contract shall include provisions that set forth the requirements of subsections (a) to [(e);](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.

(g) For the purposes of this section:

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

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

"Indirect public works project" 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 that has received a government benefit from:

"Party" includes eligible bidders for and eligible developers of any public works project 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 works project" means any project to which a governmental contracting agency is a party, 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."

SECTION 3. 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 exemption, or county ordinance providing a tax exemption, or a government lease of land in existence before the effective date of this Act.

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.