STAND. COM. REP. NO.  1204-08

Honolulu, Hawaii

                , 2008

RE:   S.B. No. 3087

      S.D. 1

      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 Committee on Labor & Public Employment, to which was referred S.B. No. 3087, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONTRACTOR SUSPENSION ON PUBLIC WORKS PROJECTS,"

begs leave to report as follows:

     The purpose of this bill is to strengthen enforcement of Hawaii's Public Works Law by requiring the Director of the Department of Labor and Industrial Relations (DLIR) to immediately suspend any contractor who interferes with or delays an investigation or falsifies payroll records from working on any public works project for three years.

     DLIR, Laborers' Union Local 368, General Contractors Association of Hawaii, Ralph S. Inouye Co., Ltd., Royal Contracting Co., Ltd., Hawaii Building and Trades Council, AFL-CIO, Building Industry Association of Hawaii, Associated Builders and Contractors of Hawaii, Hidano Construction, Inc., Pacific Resources Partnership, and Hawaii AFL-CIO testified in support of this bill.  The Hawaii Island Contractors Association testified in opposition to this measure.  The Department of the Attorney General provided comments.

     Currently, employees who work on public works projects are required to be compensated in accordance with the Federal Davis-Bacon Act or Hawaii's Public Works Law (also known as the Little Davis Bacon Act).  These pieces of legislation were intended to provide a level playing field to bidders on public projects by requiring all bidders to provide the appropriate wages and benefits.

     Under current law, a contractor found to be in violation of Hawaii's Public Works Law is considered to have committed only one violation of the law, although multiple violations may be occurring or recurring simultaneously on multiple public works projects performed by the same contractor.  The lengthy process for conducting and completing investigations of possible violations is also problematic, often resulting in contractors not being properly sanctioned or restricted from obtaining contracts for additional public works projects.

     Your Committee finds that by requiring the Director of DLIR to suspend a contractor who delays or interferes with investigations conducted under Hawaii's Public Works Law or falsifies payroll records from working on any public work for three years will deter these actions and allow for better enforcement of Hawaii's Public Works Law.

     However, your Committee understands the concerns raised by the Attorney General that, as currently written, the language of this bill is ambiguous and needs clarification.  Accordingly, your Committee has amended this measure by clarifying that a contractor shall be suspended for a period of three years for a violation based on interference with or delay of an investigation pursuant to Hawaii's public works law.

     Other technical, nonsubstantive amendments were made for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3087, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3087, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,

____________________________

ALEX M. SONSON, Chair