STAND. COM. REP. NO.  1303-08

Honolulu, Hawaii

                , 2008

RE:   S.B. No. 2780

      S.D. 2

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Sir:

     Your Committees on Labor & Public Employment and Economic Development & Business Concerns, to which was referred S.B. No. 2780, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC WORKS,"

beg leave to report as follows:

     The purpose of this bill is to further clarify requirements for the payment of prevailing wages on public works projects by including, as a public work, construction contracts valued at $500,000 or more between private persons using state or county land for commercial, profit-making activity.

     The Hawaii Carpenters Union testified in support of this bill.  The Department of Land and Natural Resources, Department of Accounting and General Services, Department of Labor and Industrial Relations, and a concerned individual testified in opposition to this measure.

     Chapter 104, Hawaii Revised Statutes (HRS) establishes that prevailing wages be paid on projects meeting criteria that define it as a public work.  However, some confusion remains on whether the payment of prevailing wages are required under construction contracts between private persons using state or county land.  This measure attempts to clarify this ambiguity by specifying that prevailing wages be paid on these construction contracts if the state or county land is used for commercial, profit-making activity.

     Nevertheless, your Committees understand the issue raised that this may have an adverse impact on certain smaller businesses but that further discussion on this issue is warranted.

     Accordingly, your Committees have amended this measure by:

     (1)  Changing its effective date to July 1, 2059, to                    encourage further discussion; and

     (2)  Making technical, nonsubstantive amendments for clarity,      consistency, and style.

     As affirmed by the records of votes of the members of your Committees on Labor & Public Employment and Economic Development & Business Concerns that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2780, S.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2780, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Labor & Public Employment and Economic Development & Business Concerns,

____________________________ KYLE T. YAMASHITA, Chair

____________________________ ALEX M. SONSON, Chair