Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Labor and Transportation and Government Operations, to which was referred H.B. No. 2692, H.D. 1, entitled:

beg leave to report as follows:

The purpose of this measure is to require the Department of Labor and Industrial Relations to be responsible for enforcing the provision of and ensuring compliance with chapter 104, Hawaii Revised Statutes (HRS), for public work projects that are not directly caused by a governmental contracting agency.

Additionally, this measure:

Testimony in support of this measure was submitted by the IBEW Local 1186, the Hawaii State AFL-CIO, and the Hawaii Building and Construction Trades Council, AFL-CIO. Testimony in opposition to this measure was submitted by the Department of Labor and Industrial Relations (DLIR), the Hawaii Island Contractors' Association, and the Hawaii Chapter of Associated Builders and Contractors, Inc.

Your Committees find that under the current law a contractor who is found to be in violation of chapter 104, HRS, is considered to have committed only one violation of the law, although multiple violative acts may be occurring or recurring simultaneously on multiple public work projects performed by the same contractor. Your Committees further find that due to the lengthy process for conducting and completing investigations of possible violations, contractors who do not comply with the prevailing wages laws are not properly sanctioned or restricted from obtaining contracts for additional public work projects. Your Committees are concerned, particularly during the current construction industry boom, that contractors be carefully monitored and sanctioned as necessary to provide a level playing field for all contractors and to ensure the payment of prevailing wages to all eligible workers.

Furthermore, your Committees determine that other legislative vehicles are progressing throughout the session that address the same or similar issues as contained in this measure. However, your Committees further find that the issue of preventing contractors who continually violate the law on multiple occasions and on multiple public work projects from circumventing the law and gaining an unfair advantage over complying contractors is not addressed by any other measure in the Senate at this time.

Accordingly, your Committees have amended this measure by deleting its contents and inserting the language of S.B. 3008. As amended, this measure, upon its approval, will clarify that a single violation refers to each separate project where DLIR finds a contractor has failed to comply with chapter 104, HRS.

As affirmed by the records of votes of the members of your Committees on Labor and Transportation and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2692, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2692, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.