STAND. COM. REP. NO. 2172

Honolulu, Hawaii

RE:    S.B. No. 3087

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Tourism and Government Operations, to which was referred S.B. No. 3087 entitled:

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

begs leave to report as follows:

     The purpose of this measure is to allow the Department of Labor and Industrial Relations to immediately suspend and begin debarment proceedings against contractors that purposely defraud the State on a public works project or do not cooperate with the Department of Labor and Industrial Relations in determining if there has been a violation of the prevailing wage law.

     Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations; BIA-Hawaii; The Pacific Resource Partnership; Hidano Construction Inc.; and Laborers' Union Local 368.

     Currently, contractors can be suspended for failure to pay back wages and penalties, or after the third notice of violation if the second is within two years of the first and the third is within two years of the second.  There is currently no method to debar contractors who cheat and get caught unless they fail to pay back wages, which rarely happens.

     Your Committee believes that state or county government agencies should not do business with those who falsify payrolls or do not cooperate with government investigation.

     Providing for suspension as a penalty will create a clear line for those who are not willing to comply with the law.  Chapter 104, Hawaii Revised Statutes, relating to wage and hours of employees on public works, is a law imposed to even the playing field in bidding for public works jobs and pay a prevailing wage to workers.  Your Committee finds that it is not unreasonable to impose a three-year suspension for those who are not willing to comply with the law.

     Your Committee has amended this measure by making technical, nonsubstantive amendments.

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

Respectfully submitted on behalf of the members of the Committee on Tourism and Government Operations,

____________________________

CLARENCE K. NISHIHARA, Chair