SB1125 HD1.DOC

PART I

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

RESPONSIBLE CONSTRUCTION CONTRACTOR LAW

§ -A Applicability. (a) This chapter shall apply to public works contracts under chapter 103 and to procurements for construction under chapter 103D, if the general contract amount is $250,000 or more and to any subcontract of $50,000 or more in connection with any general contract.

(b) This chapter shall not apply to employees covered by a collective bargaining agreement under chapter 89 if the applicability of this chapter is expressly waived in the collective bargaining agreement in clear and unambiguous terms.

§ -B Definitions. As used in this chapter, the terms "contract" and "contractor" shall have the same meaning as in section 103D-104, as those terms apply to construction. The term "construction" shall have the same meaning as in section 103D-104.

§ -C Prerequisites for award of contract. (a) A contractor who submits a bid for a contract for construction shall show proof of compliance with subsection (c) to the comptroller, the comptroller's county counterpart for contracts under chapter 103, or the procurement officer for contracts under chapter 103D, as applicable, as a prerequisite to being awarded a construction contract. The requirements of this subsection shall be deemed incorporated by reference in any contract between the contractor and subcontractor.

(b) A subcontractor who subcontracts a contract for construction with a contractor under subsection (a), shall show proof of compliance with subsection (c) to the comptroller, the comptroller's county counterpart for contracts under chapter 103 or the procurement officer for contracts under chapter 103D, as a prerequisite to being awarded a subcontract; provided that the contractor shall be primarily responsible for presenting the proof required under this subsection. The requirements of this subsection shall be deemed incorporated by reference in any contract between the contractor and subcontractor.

(1) Classify all workers of the contractor and subcontractor as employees;

(2) Comply with all applicable labor laws;

(3) Comply with the requirements under section 104-2 with regard to prevailing wages;

(4) Commit to hiring Hawaii residents to compose not less than eighty per cent of the workforce on the project; provided that the department of labor and industrial relations shall determine those trades falling within a shortage category in this state, in which case this paragraph shall not apply to shortage category trades; provided further that contractors or subcontractors that satisfy the requirements of this paragraph shall be entitled to an adjustment in the bid amount by subtracting therefrom five per cent;

(5) Provide its employees with a fair and neutral process for resolving work-related issues, that does not force the employee to waive statutory remedies and rights; and

(6) Be appropriately licensed.

§ -D Compliance duration; compliance officer. Each contractor and subcontractor shall:

(1) Comply with section -C for the entire duration of the contract of construction; and

(2) Certify compliance with section ‑C, under oath, by an officer of the contractor and subcontractor, to the comptroller, comptroller's county counterpart, or procurement officer, as applicable, on a monthly basis.

§ -E Failure to comply; sanctions. A contractor or subcontractor under this chapter who fails to comply with section -C shall be subject to any of the following sanctions:

(1) Temporary suspension of work on the project until the contractor or subcontractor complies with section ‑C;

(2) Withholding of payment on the contract or subcontract, as applicable, until the contractor or subcontractor complies with section ‑C;

(3) Permanent disqualification of the contractor or subcontractor from any further work on the project;

(4) Recovery by the State or county, as applicable, of any moneys expended on the contract or subcontract, as applicable; and

(5) Proceedings for debarment or suspension of the contractor or subcontractor under section 103D-702."

PART II

SECTION 2. The purpose of this part is to provide a preference for offerors on a construction contract under chapter 103D, Hawaii Revised Statutes, if the contractor has a written agreement with an apprenticeship program that is registered with the department of labor and industrial relations at the time of the general bidding.

SECTION 3. Chapter 103, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§103‑ Public works construction; apprenticeship agreement. (a) A governmental body, as defined in section 103D‑104, that enters into a public contract under this chapter having an estimated value of not less than $250,000, shall decrease the bid amount of a bidder by five per cent if the bidder is appropriately licensed and has a written agreement with an apprenticeship program registered with the department of labor and industrial relations and in conformance with chapter 372. The lowest total bid, taking the preference into consideration, shall be awarded the contract unless the solicitation provides for additional award criteria; provided that the contract amount awarded shall be the amount of the price offered, exclusive of the preference.

(b) For purposes of subsection (a) in determining whether there is conformance with chapter 372, the procurement officer shall consider the actual number of apprentices enrolled in and the annual number of graduates of the apprenticeship program.

(c) At the time of submission by a bidder of a competitive sealed bid under section 103D-302 or by an offeror of a competitive sealed proposal under section 103D-303, a bidder or offeror, as applicable, shall furnish written proof of having a written agreement with a registered apprenticeship program and, if awarded the contract, shall continue to certify monthly in writing that the bidder has a written agreement with a registered apprenticeship program. This subsection shall be deemed to be incorporated by reference into a public works contract. A bidder who is awarded a contract shall be subject to the following sanctions if, after commencement of work, the bidder at any time during the construction no longer has a written agreement with a registered apprenticeship program:

(1) Temporary or permanent cessation of work on the project, without recourse to breach of contract claims by the bidder; provided that the governmental body shall be entitled to restitution for nonperformance or liquidated damages, as appropriate; or

(2) Proceedings to debar or suspend under section 103D‑702."

SECTION 4. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. New statutory material is underscored.

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

THE SENATE	S.B. NO.	1125
TWENTY-FIFTH LEGISLATURE, 2009		S.D. 2
STATE OF HAWAII		H.D. 1