H.B. 245 Construction Wage Standard Act: transcript

Well, thank, thank you so much, Mr. Chair and Committee. I, I commit to you that I will only bring good and exciting legislation to this committee. Won't be as exciting as non-compete reform. But You heard, you heard what Representative Thurston said about giving too much authority to the executive branch, right? This Is, this is true. This is true. Um, and Alyssa, is it okay if I share my, uh, screen here? Thank you. Um, so, uh, I'll be speaking to substitute Juab. We got some feedback from A, B, C and U-H-P-C-A, um, that, uh, we just some, some minor technical cleanup, uh, amendments that are reflected in substitute one, which I'll be speaking to. We, and we have to adopt that, right? Yes, sir. Okay, Go ahead. Um, so HB 2 45 is a simple but important concept when the government is using taxpayer dollars to invest in public infrastructure, whether you're building a road, building a new courthouse, what we wanna do is make sure we're not undercutting the existing labor, uh, uh, excuse me, the existing wage standards in that area. Um, so Utah is one of the largest investors in infrastructure in the entire state. Probably the, uh, biggest investor. We invest billions of dollars annually in everything from transportation infrastructure. And so we wanna make sure that we're judicious and we put some, uh, four corners, if you will, on that public contract process. So, HP 2 45 uses the existing framework for an area wage standard. This is, I think, a very important point. So an area wage standard is a survey that's done every single year that, uh, checks on each individual job. And you have some of those numbers in front of you. Um, each individual, uh, type of work. And then looking at what is the wage being paid for that job currently in the private sector. So, uh, we, we've been working really hard on this bill for over a year, um, taking on different iterations, working with people, getting feedback. Um, one thing that I think is also important to note about the numbers that are in front of you. So this is from President Trump's Department of Labor. This is the area wage standard. So, uh, A GC told us on Friday that 97% of, uh, 95 to 97% of contractors in Utah are non-union. So I think this bill somehow gets conflated into the union versus non-union debate. But what the numbers that are in front of you, 90, like the vast, vast majority of those numbers are from non-union contractors. So this isn't about non-union or union, rather, it's saying that when the state of Utah is going to build a road in southern Utah, it would make sense that we would make sure that in our contracts, we wouldn't undercut the area wage standard that's already existing in Southern Utah. So why is this important? If you look at this map and you look at how we're kind of boxed in here in Utah, um, I would say this is more than anything, this is a preventative measure, an important preventative measure. So if you look at the states surrounding us, with the exception of Idaho and Arizona, these are states that have adopted similar policies, essentially making sure that we don't do that undercutting method. So why is that important? Well, if these states are adopting these frameworks and they're pushing these contractors that come in and heavily undercut the area wage standard, we have a risk of being a green light for those bad actors in other states to come to Utah. Um, this is one of my favorite quotes from Senator Marco Rubio. Now, secretary of State says, America needs less welder, or excuse me, we need more welders and less philosophers. And so by, by establishing this area standard, we're making sure that we're investing in Utah workers. Once again, I want to emphasize this is not a minimum wage, uh, where we're setting the wage for across the board. This is not a living wage. Just to give you an example, um, in Utah County, the area wage standard from the Department of Labor for a, for a general labor. So essentially just your, you know, no experienced construction worker, $14 an hour. So once again, we're not, it's not based on the cost of living. It's not a, you know, this kind of living wage, this nebulous thing that's been thrown around. This is simply saying Utah should be a good actor when we're investing our sacred taxpayer dollars into public infrastructure projects. Um, you also have some data in front of you. We, uh, like I said, this has been a a multi-year, multi-month effort. We did some polling on this type of, uh, of legislation here. Uh, se 79% of of utahns prioritize awarding publicly funded construction to the contractor with the highest quality work over the lowest cost bid. One thing I'll say is that this bill also doesn't dissuade, uh, UO or DFCM from taking the lowest bid. Rather, what we're saying is making sure that that lowest bid is still not undercutting the local jobs in that area. So, once again, I want to just frame for you, this is not a question of should the government be involved or shouldn't the government be involved? By definition, we are involved because the state of Utah is building the infrastructure and building the contracts. Finally, just wanna close with, uh, one of my favorite guys in the business right now. Uh, Mike Rowe from Dirty Jobs says, happiness does not come from a job. It comes from knowing what you truly value and behaving in a way that's consistent with those beliefs. And this is an opportunity for us to do just that. We can make sure that we're setting some guardrails, setting some basic, basic, basic standards, um, on when we invest sacred taxpayer dollars and make sure that we are, uh, being responsible with that money. Finally, I would just say that we've been, we've been working with, with everyone in the space. We have, uh, uh, earlier in the summer we talked to a GC, they, they identified certified payroll as a huge administrative burden that would be a non-starter for them. We've also removed that from the bill. So we are trying to work hard and, and just, uh, follow through on that court message. So with that, Mr. Chair, happy to answer any questions.

Thank you, Mr. Chair. I want to, uh, thank the sponsor for bringing this bill forward. Selfishly, um, my husband is in the trades. My husband's a pipe fitter. And, um, even though the state of Utah does have some very large state funded projects, um, going, there was, um, there was a point in time for about two years straight where my husband was working in Arizona, Montana, Washington, Oregon, basically everywhere except Utah. Um, we had big projects going on, but, um, but those, those, um, projects were all awarded to out-of-state contractors. So, um, selfishly, like I said, I would love for my husband to stay home and, and stay busy and, and the hundreds of other, you know, workers in, in, in the trades to make sure that our tax dollars are staying here to support taxpayers to that we're, that we're investing in, in Utahans and keeping Utahans busy and keep a roof over my kids' head, keep food on my table. So thank you very much.

Question for the sponsor. I'm looking at your area wage standard chart on the right hand column. Uh, it looks like in Beaver County or thereabouts, you can get carpenters for about 18 bucks an hour, and laborers for about $11 an hour. So, but your bill would say that if that employer bid a job in Salt Lake County, he could not compete on wages, he would have to bid as if those were Salt Lake County workers. Is that right?

Uh, so it's wherever the project is being built.

Yeah. So the project's built in Salt Lake County, he couldn't say, well, I can get these guys to work me for 18 and $12 an hour, but now I gotta jack up my bid and I'm not gonna be able to compete because I've gotta pay my workers this higher Salt Lake County wage. And so that would preclude the rural guys from taking advantage of this opportunity to get a little bit more money. Is that how I'm seeing this?

The, the biggest piece is that that number is based on the projects that are being built in that area. Right. And so that, that, I, I, I can't speak to the, to that situation in particular.

So, so you would tell the contractor, since this a Salt Lake County project, you have to pay your carpenters at least $32 an hour, and your labor's at least 25. And he's got people who are willing to work for significantly less than that, do a good job, willing to drive up here and do the job for significantly less than that. But we would preclude those rural guys from having an opportunity to come up and bid on Salt Lake County Project because they would have to be, they'd be priced out.

Well, the, our, our intent, and as we've worked with, uh, once again udot, DFCM, the Labor Commission, different pieces, we would want to build that in on the front end. And so there's clarity and expectation in terms of that. Um, and, and I think too, that would be probably more of a, a discussion of who are, who's getting that in the first place. And, and I think too, uh, the numbers that you mentioned as well, that, that I think that's important to recognize that it wouldn't make sense for the state of Utah in my, once again, this is my, my opinion wouldn't make sense for the state of Utah to build a construction project that's under the existing wage, uh, standards that you identified. That, that, that's what I'm hoping to, to get at the heart of that.

That's, that's, maybe that's part of my confusion, Mr. Mr. Chair. So if we could build a Salt Lake County project for 30% labor costs using rural Utah labor, why wouldn't we do that? That seems better. Like it's better for everybody. It provides rural guys jobs, gets the job done, good quality workers. Why would we prevent that project from happening other than to protect the Salt Lake County workers and getting a higher wage?

Well, uh, it's a good question. Representative Thurston. And, and that's definitely not my intent to, for rural versus urban, rather just making sure that, that the state of Utah is being a good actor in this space and not, uh, undercutting those local, local, uh, jobs there. Okay.

Thank you, Mr. Chair. Thank you.

Yeah, thank you Mr. Chair. And, uh, you know, thanks for bringing this bill. Um, there's a, there are a lot of challenges in projects at the state level, so I appreciate you bringing the bill Representative Clancy. The question I have on the back page of your, uh, construction wage standard sheet, there's a statement there does not raise the cost of construction. Is that to mean that, uh, the bottom line price of the construction's not going to go up? It'll just be the construction company that will absorb that additional cost

So that, that, uh, piece there is coming from? Uh, we've looked at about, uh, 85 peer reviewed studies that show that these types of, um, uh, laws do not increase the cost of construction. Once again, I think the biggest piece too is building in clarity in contracts. So what kind of, going back to what Representative Thurston mentioned is DFCM, udot or other per, uh, purveyors of this public investment, they would build that in on the front end of the contract. So there's that expectation put into place there. The other piece about, particularly with this legislation, in terms of other state's legislation, this legislation, I would say almost by definition we're not raising the price of construction because what we're measuring is from the Department of Labor, the price of construction in that area. So I think what you'll find too in, in, uh, public testimony as well is I would say our legacy Utah companies, they're well above, uh, the area wage standard. Um, and so that's where I think too, as a preventative measure, making sure that we don't essentially, uh, invest in companies that are coming from outstate, kicking our good Utah companies to the curb and, uh, taking that public, public money.

Thanks, Mr. Chair. Thanks, Mr. Chair. Uh, couple questions. Are there contractors right now that come from outta state, who've got mobile labor, they bring it in, you know, guys that are making much less than the prevailing wage? Can you just speak to that?

That's right there. There's definitely been a couple, uh, projects that come to mind. I would say that by and large, we're in a good spot right now, and I think you're gonna hear that with public comment where the, our leg, like I said, our legacy Utah companies are heads and shoulders above this piece. One project that comes to mind is the, the Flatiron Project. I know Representative Dunnigan and I have talked about this. Um, those are the kinds of things that we're trying to prevent. I think you'll hear in public comment, um, individuals share those stories and feedback. Um, but, but ultimately, uh, it's di minimis right now, but it does, it does happen.

Do do we have any sense on data for, let's say a UDOT project and they, they hire a contractor, how many contractors they hire or laborers are getting paid less than the prevailing wage?

Uh, that, that's, that's a, a tough data point to get because a lot of it is aggregate data on the, uh, surveys. And so you're, the, the top line number that we'll see is the aggregate number. Um, but, uh, we could certainly request see if UDOT would be willing to, to give us that data. My sense is that they would probably give us more of an aggregate, uh, data than a, than an exact number. Um, but in, in our, in our conversations with UDOT and DFCM, a lot of the discussion, and you'll see this reflected in substitute one of the bill, their concern was more about the administrative burden and reporting requirements, and those are stripped out of the bill. And so, um, that was, that was essentially their top level, uh, concern.

Uh, one more Mr. Chair, if you're, if that's okay. Um, and I just wanna be clear, like you, you get, you get the prevailing wage, which is basically a survey of what the market rate is. It's not the government setting the rate, it's a market rate. That's a survey. And you're just saying that public projects cannot hire contractors who are gonna be pricing below that market rate. And, and, and I think what you're really trying to get at is, you know, and it could be in-state, but a lot of out-of-state folks coming in who are trying to undercut local utahns on what the market rate rate is. That's, am I getting

That's exactly right. Representative Roberts, and then the, I would even say the market rate, once again, when we spoke again with a GC on Friday, they shared that in that survey, uh, in Utah, 97%, 95 to 97% of the members are non-union. So that's where I want to make a clear distinction that the numbers that you're seeing in front of you are the vast, vast majority is, is not a union rate. So not trying to, to play favorites, trying to hit that, what you said, that market rate, what already exists in the market. Let's be smart about our public investment there.

Thank you, Mr. Chair. I'm having a hard time seeing how this isn't just, uh, uh, Davis Bacon by a different name and, and the challenges that we have, you know, Utah County, we did an entire road project and said, we'll just do it with state dollars and did it. I mean, speaker Lockhart used to, used to use that as a great example. We did it like in, I can't remember the number half the time for, you know, three-fourths, the cost, something like that. But why, why wouldn't we just do a local bid preference if we're concerned about out of state companies and, and with this, the, you know, the, all of the different levers that I'm seeing here, potential for litigation, you, you didn't pay that person the right thing, and this person came from a different county and the administration costs. I mean, I guess help me understand how this is not just importing all of the problems that we've bemoaned with Davis Bacon for quite some time.

It is a great question. Representative Ivory, and that, that's where I, I was, uh, through my presentation trying to show the iterations that this legislation has been through. So little, little Davis Bacon is often referred to as like the state of what you're describing, where we're importing, you know, copy and paste the Davis Bacon. So for, for committee members, Davis Bacon being, if there's a federal procurement, if there's federal investment that to follow the Davis Bacon Act, so little Davis Bacon, um, there's a significant amount of more reporting guidelines and, uh, I would say ticky tag things where, uh, certified payroll, different things like that, this bill is different where it's only focusing on the heart of that issue by just saying, let's set the standard when we're investing taxpayer dollars. Let's not undercut the local jobs that are already in that area. Let's make sure the state of Utah is a good positive actor in that space. So, so on that piece, on the regulatory side, if you look through this bill, I would say it's significantly, uh, scaled significantly down than a quote unquote little Davis Bacon legislation, which says, let's copy and paste all the rules and regulations. This is solely trying to hit on that, that one piece about the, uh, area standard wage.

So then, if I may, why, why wouldn't a simple local bid preference solve the problem?

I would, I would definitely support legislation on a, on a local, uh, local bid process. This is just, I, I think when you get down to the nuts and bolts, this is what we've, uh, you know, been working on with, with different stakeholders and such to get to. Because ultimately, I think that's what, that's what the heart of the issue is, is making sure that when we're investing those taxpayer dollars, let's not go under what that standard is already set by the private market.

Okay, Great. Thank

Perfect, Mr. Chair. Appreciate it. Gavin Gilbert, on behalf of the Associated General Contractors of Utah, we represent the vast majority of commercial contractors for the state with over 600 member firms. We do have firms that are both, um, union and non non-union contractors. I, I need to start, I, I, I can't express enough. All the thanks to, to Representative Clancy for bringing this bill and for involving industries, but nothing but fantastic to work with. That said, we, we are asking for a no vote on this today. Um, again, it, it, it, it walks that line. We, we can't find non-union contractors or private industry that is in support of this bill. Candidly, um, when we do surveys across the states, and we can throw that map back up, majority of the states that have similar policies are not typical states that we wanna model our economic policies off of. And of the states that have had, um, similar regulations on public contracts, a handful over the past five years, uh, conservative states are rolling those off of their books. They're not working. And really, the the biggest point that that we have is, is construction is the original way to, to achieve the American dream. And we're going back to our roots. And it's kind of the new age way to achieve the American dream. Construction wages in the state of Utah are doing fantastic and are paying extremely high. And again, we don't see the need to regulate what the, what the private industry and commercial industry is, is again, solving it's, it's one of the highest paying industries in the state. And with that, it sounds like I'm at time.

Did you have a question for him? Go ahead. Thank you, Mr. Chair. So Gavin, can you, um, help me understand, um, this issue of if there was a floor on wages, would that make your businesses more competitive or less competitive?

Um, I don't know if it'd make it more or less competitive, but the surveys are, so there's a national survey that we go off of on this. And by the way, we, we haven't, uh, a wages and benefits surveys we do with our members of the general contractors. We do it annually. We'd be happy to talk to any of you individually and, and share that data. Um, all the way from unskilled labor all the way up to executive teams to figure out what actually is being paid in the state. That said, um, when we look at the national data, about half of the surveys out there and studies done on these policies show that there was zero impact on, um, pay increases and there weren't. So it didn't increase wages, but it also didn't increase projects, um, all the way up to 10 to 15% increase in projects. About 40% of a project's cost 40 to 50% is labor. Um,

So, so there is a potential that it has no impact, but there's also potential that it would increase

Cost. I, I think that's an accurate way to to, to put it, yes. Great.

Just wanna make sure I understand that. If, if there's no potential to increase the wage, then why would you care? 'cause the wages Aren't coming up. Sorry, adding 'cause

there's a potent no, 'cause the, no, sorry. The, the wage wouldn't go up, but it can create a, a, a cat and mouse game wherein, well, there's two parts to that. If it won't increase wages, then why have government policy that's involving wage? If there's not an issue, then why have a solution to something that's not a problem. That's the first part to that question. The second part to that question though, is if it does increase wage, then it creates this cap mouse game between public and private contracts that in other states that have rolled these off, their books can increase just the cost. Ultimately, the taxpayer's gonna be left on the hook for that financial cost. And where state projects are already under scrutiny from the legislature, that's a concern. But again, we'd, we'd purport, there's not an issue with, with wages. It's a very competitive market right now. In fact, skilled labor is one of the most sought after i i, I guess, professions or crafts that we can have in the state.

And I, I just say, we can have the debate about whether or not the policy is needed. Maybe it's not needed, but if, if, if there's no evidence that the wages actually go up, then it seems to me like you wouldn't, you know, you wouldn't care. But thanks anyways. Appreciate it, Mr. Chair.

Mr. Chair members of the committee. My name is Kevin Connor. I'm a labor economist and post-op,

Go. Sorry about that. I am a labor economist and postdoctoral researcher at the University of Utah, but I speak on my own behalf and do not represent the views of the university. I've published several reports and academic articles on the construction industry, including work, examining some of the impacts of policies like House Bill 2 45. I'm also the son and grandson of carpenters. I spent many summers working with my father and grandfather and saw firsthand how difficult a life in construction can be. But I also saw the pride they took in their work. Construction is different from other industries. It's project based. And contractors and workers have to weather feast and famine. Firms are often small worker attachment is low and employment can be intermittent, intermittent, and all of those things make it more difficult to invest in a highly trained, more productive construction workforce. As a result, much of the burden of training falls on workers themselves. Apprentices must make a sustained commitment to an industry that is beset by uncertainty area. Wage standards help make that investment more worthwhile by ensuring that public projects reflect wages and benefits already established by local labor markets. Existing research suggests that states with these kinds of wage standards have six to 8% higher enrollment in apprenticeship programs and higher completion rates. These standards also help contractors compete for work in their own backyards with less fear of being undercut by outside firms in some wage standards and area. In some area, wage standards are an investment in local constr, local contractors, and Utah's construction workforce.

My name's Jason Encino. I am the owner of Denali Energy. I am a small contractor in Utah. I have less than 10 employees. Uh, I am in favor of 2 45 just for the fence. Uh, just for the fact that for me to be able to go out and bid against some of these other contractors by having this prevailing wage, it does level that field. My wages are already up at a certain point. If I have somebody from outta state that is a lower portion, trying to come in to some other bid against me and their way under me, by having that prevailing wage, it levels that field. It allows me to be able to bid against some of these contractors. They're a lot larger, have a bigger bank rolls, whatever it is. It levels that field for me. But it also allows for quality and safety. Um, I feel that those that may come in, they're just trying to throw it in, get it in, get it done as fast as they can to make the highest profit. By having that accountability of, uh, prevailing wage, I think that they would have to have that accountability for the quality and that safety. And like this gentleman, uh, mentioned that, um, craftsmanship behind them. Um, that is something I have been a part of. I've been a member of the electrical, you know, industry for 28 years. And I pride myself in that craftsmanship that I can provide, that it is worth and a great install for the state or for whatever our customer may be. Um, I also feel that it would be, uh, the availability for, um, the retainage of a, of a young apprentice or whatever that we put into it. If they don't have that, you know, commitment, like he was saying that we lose that retention very well and we put a lot of money towards our employees.

Representative Thurston. Thank you, Mr. Chair. I just wanna make sure I understand what you just said. So are you saying that if a contractor from Kane or Piute or Wayne County came in a bit on a project lower than you because they have lower labor costs, that their, that there's a necessary assumption that their quality and safety would be lower just because they're from rural Utah?

To the sense that I feel that they would be, if they bid it as my wage versus their wage and there wasn't a prevailing wage, then yeah, they're gonna come in and just try and slam it as fast as they can. Beg. Pardon? Um, they're not here to do a great job. I mean, they're here to do a job, but I don't feel that their quality is up to that par. I go in and walk several projects that have been done that were just recently bid, and they don't put that craftsmanship into it. They don't put the, the quality into their workers that just get it in, get it done as fast as they can.

Okay. Um, think I, I think that would be surprising to our rural Utah contractors to hear that, that they are not quality and not safe.

Thank you, Mr. Chair. I believe I heard that the gentleman from the association, the, uh, construction Association, said that the trades is a highly sought after industry, highly sought after job with you owning a construction company. Have that, have you found that it's been easy or hard to find skilled labor in the trades?

Extremely difficult. Thank you.

Uh, uh, thank you, Mr. Chair and committee. My name is Bronson Thackery. Um, I represent a plumbing company that's located in West Valley City. My parents have ran that for 30 years, and I'm transitioning to take it over as a small family business. We're a small business. There's 12 of us on the team. We do a lot of state funded work, particularly plumbing at the University of Utah. We do a lot of service and repair work there on some of these low bid contracts. And we would like to, uh, get in the door first and do the job right and reduce the, uh, amount of money spent on repairs for state built projects. I don't really have any other details to add or welcome your questions.

Am I there? Yep, go ahead. Okay. Sorry. I was, uh, actually there today. Um, but I had to run and pick up my kid 'cause this Fran's super long. Uh, so this is exciting. This is my first time in participating in government and all this. And it's, uh, I'm gonna try to rapid fire through this 'cause I know I have like 90 seconds. So I'm Paul Armstrong. I live in Salt Lake City. I started a small landscaping excavation company six years ago. I don't have a lifetime of experience in the trades. So I can speak from my experience relative to, you know, my limited time. Uh, it's not always true that spending more on a project guarantees higher quality. But in general, if you wanna survive in business, you have to stand out somehow. I think it's shortsighted to always assume the cheapest option is the best. There's an old saying, buy cheap, buy twice. I've certainly bought plenty of tools. I mean, Harbor Freight, for example, I wish I hadn't bought 'em. Um, it's the same idea applies to companies in labor, not with every job, but a lot of 'em. It's pretty rare to find someone who has strong work ethic, loyalty, does physically demanding work for low wages. And honestly, I don't think that should ever be the goal as an employer. The goal should be to provide a safe, dignified job that more than covers the basic cost of living. The work we do is physically demanding and often dangerous. And I've dealt with a lot of turnover because of that. The hardest part is constantly having to retrain people. Um, because of that, I made the decision to start employees at 25 to 30 bucks an hour. That has helped me to retain quality employees, but it has made it very difficult to just bid on these jobs that we're talking about. I wish I had so much more time, but I got crushed. And, um, I I'm not gonna be able to finish my, my, I thought I had at least two minutes, but it's not gonna happen. Yeah,

Yeah, I feel you. But thanks for letting me speak and this is really fun to be part of the whole, uh, the experience.

I am brushed and I have questions for Thursday and a few other things If you guys wanna ask me any

Okay. Is it fixed now? Yeah. There you go. Okay. Uh, uh, my name is Evan Wright. I'm from Cache Valley. Uh, a a few interesting things, uh, about this bill that stand out to me, especially, uh, I'm, I'm a senior in high school, and pretty soon I'm gonna try and be an apprentice and the trades. So, uh, as it pertains to the bill, uh, it kind of guarantees a decent pay for, um, apprentices according to the market, which would be extremely helpful. Um, I, I know a lot of guys who are apprentices who just aren't getting paid, uh, the worth of their labor and they can barely afford to live. And I, I think this is a really good bill.

Thank you Mr. Chair. I was trying to look up, there's a substitute, correct? Yep. Huh? Is there a substitute to be conducted? Yeah, we need to run a sub. I, yes, that is my motion that we adopt the substitute.

Clancy, I'll waive. Thank you. Okay, great. Thank you.

Uh, I'm gonna hold my, I have a question, sorry. I'm sorry. What? I have a question once the motion's discussion, so sorry.

Thank you Mr. Chairman and I move that we recommend favorably for substitute house bill 2 45.

Uh, so Representative Clancy, I appreciate your work on this and trying to get the stakeholders together. You know, a couple of comments. It was mentioned that this prevailing wage might kind of seesaw as I, if I understood the comment from the witness, the public sector versus the private, but as private. But as I read the bill, it just says that the commission shall survey the county for the prevailing. It doesn't distinguish that I read in the language between public and private. It's just whatever the prevailing wage is. So I don't see that that's gonna drive one up or not. It's also brought up by, uh, a colleague correctly that Speaker Lockhart kind of pointed to Utah County and that's good, but I'll point to Utah County. When we went with the low bidder for the Flat Iron project on the freeway to tip tip in August to the mountain, and they did just horrible work. Horrible, horrible. And we had to redo that. We had to redo that. And so I obviously that I've never forgotten that. And so from the testimony, it doesn't seem like, I mean, this may increase cost, but it just is likely that the witness says it may not increase the costs. And to the comment that people from rural Utah won't come here, they can come here, they just make more money. You know, the cost of living's gonna be higher here. What we're trying to avoid, I'm trying to avoid, is people that come from out of state, and we have a problem going back years. They come, they Loa by the wage. They, they don't, uh, pay workers comp for them. They don't collect payroll taxes. It's an ongoing whack-a-mole problem. And so I appreciate your bringing this before us.

Thank you, Mr. Chairman, I just, this applies only to state jobs, state construction projects. Yes, sir. Is that correct? Yes, sir. And has DFCM and UDOT weighed in on their opinion on how they feel about what this will do to state projects? I know the legislature has been fairly critical of project costs lately, and I just don't want to put, uh, statute in place that will cause us to be even higher in our construction projects.

Yes, sir. If I may, Mr. Chair, uh, speaking with DFCM and Udo over the interim, they're, uh, we gave them some draft language. They gave their feedback. Um, they ha I don't, I don't believe they've taken a position of support or oppose on this bill, but we have worked with them to get the language to where on the survey, uh, as Representative Dunnigan mentioned, that it would be very, uh, easy for them to, to do that survey. So that that was their back and forth with, with the FCM and, and udot. But, uh, once again, if, if you wanna hard and fast, uh, answer, I can try and get that from them. But they gave us, uh, feedback on the language and we, we have applied that in the original bill and then substitute one.

Thanks, Mr. Chair. I'll be quick. I mean, um, I've done some research of late, uh, in this field and to what, uh, representative Dun said, I want to just add my 2 cents. Uh, the state contracting office hires the low bid, the construction company comes in, they bring people from another state, maybe not even from this country. And what we find is those laborers are exploited and they aren't even, uh, covered for, uh, workers' compensation if they get injured. This bill will go a long way to fixing that. I I am usually a non-regulatory guy, but in this case on state projects, I'm gonna vote for this bill. Thank you, Mr. Chair.

Uh, Representative Thurston. Thank you, Mr. Chair. Sounds like that there's a problem and that we're just rushing to any solution, even if this solution won't work. So if the problem is they're not paying workers' comp, put that in the contract. Sue 'em, take 'em to jail. Whatever you gotta do. Uh, if the problem is, is that they do crappy work, put that in the contract. Have your inspectors go out and inspect the job and say, this is crappy work. You gotta redo it. Have them post a bond. Have them, there's all sorts of things you can do to address the problems, but the assumption that just making them pay their workers more is going to solve any of these problems, just doesn't follow. If you say, well, you have to pay your workers more, and somehow those workers, same workers being paid more, they're gonna do better job. It doesn't make any sense. They don't have any different training, they don't have any different supervisors, they don't have any different blueprints. They don't have any different management. It's the exact same process if you're just raising the cost of the project. And I just don't see how this is going to generate any solution to the purported underlying problem. So I, I'm, I'm thinking we've got the wrong solution. There is a real problem, but this is not the solution that's gonna work to solve that problem.

Thank you, Mr. Chair. I, I Agree with, uh, what Representative Thurston has said that. And then beyond that, I think this is a lawyer retirement program. The civil penalties, the criminal penalties, and the definitions that are there. This is gonna create an entire industry of employment law, I'm afraid in the state that, uh, would just add more cost to it. So I, I can't support this.

Thank you, Mr. Chair. And thank you for the consideration committee. Everyone's bringing forth really, really good insight here. And, uh, to Representative Burton's point about talking about those different challenges, all that this bill, uh, ensures is that when the state is, we are investing taxpayer dollars that we're gonna be judicious with that investment. And that's, that's, I think, the heart of the issue. The only other piece I would say to Representative Thurston's point, because Representative Thurston makes a, a lot of good points per usual. Um, when we, when Utah changed our area wage, uh, on our, our public contracts process in about 1981, our number of skilled labor went, uh, way, way down over the years. And so that's where I would say that I'm, I'm hoping that we can reverse that trend with this. But once again, happy to continue to work with anyone. We've, we've tried to work with anyone and everyone to get to a, a, a decent spot on this. Um, but I appreciate the committee's, uh, consideration. Mr. Chair.

Thank, thank you, Mr. Chairman. I appreciate the work and, and the comments here. Employers coming in and not doing pain workers' comp or the payroll taxes, paying under the table, paying in cash, doing shoddy work has been worked on by this committee for many, many years. And it's, it is an ongoing problem. I don't think this is the solution, but I think it will help. And to use the technical term, crappy work. Well, I, I don't know if, if we do pay more, I think we stand a better chance of getting quality and better trained workers. And look at the Flat Iron Project. Okay? You had inspectors, whatever, they didn't catch it, that cost us millions of dollars to redo as well as others. And this, but the testimony generally to me has been, we don't think this will raise costs. It's a prevailing wage. Just pay that. Thank you, Mr. Chairman.

Thank you Mr. Speaker. There once was a conservative philosopher who said that the best social program is a job. And Mr. Speaker, I have to admit, that is actually President Bill Clinton. When we talk about affordability in our state colleagues, the most important thing we can do is make sure that we are facilitating the creation of good, good jobs that pay a good wage, that people have benefits so that families aren't put in the position where they're working 40 hours a week, but at the same time they're, they're scraping to make ends meet where one surprise medical bill or a car accident could put them behind the eight ball. HB 2 45 was an idea that we had to, to deal with the affordability issues, particularly when we're talking about public construction projects. And I want to emphasize that to my colleagues to recognize that the government doesn't have a choice to be involved or not with government contracts. The choice that we have is what kind of contracts do we want to create and what outcomes do we want to produce? So HB 2 45 makes sure that when we, as the state of Utah are investing in public infrastructure projects, that we're paying the area standard wage for the workers who are working on those projects. Now, I want to explain what the area standard wage means. This is not a minimum wage, it's not a living wage. Um, rather what it is is President Trump's Department of Labor sends out a survey every, every year to get information from contractors who are working in Utah in different zip codes in different areas, and they create an aggregate rate for each specific area where they're building. So, just for reference, about 97% of all, uh, contractors in Utah are non-union contractors. So this has been asserted that this is a, this is a union bill, but the numbers that we're getting here in Utah are non-union rates. And so when we put out a bid for a contract, all that we would be doing with HB 2 45 is ensuring we're not undercutting the existing jobs in the construction sector in the area where we're financing these infrastructure projects. As I've worked with, uh, Mr. Speaker, it's almost been a little bit like Dr. Seuss with, uh, one contractor, two contractor, red contractor, blue contractor. As we've talked with many, many people over the past o over a year talking about this piece, um, we have made change after change to make sure that there's very, very limited, if any administrative burden there, there's no new, uh, full-time employees at the state. And that the oversight is quite limited to make sure that we're getting at the heart of the issue. So much shown in fact that we've actually made changes in the first substitute of this bill that's in front of you today that was actually suggested by some of the individuals who signed a letter of opposition that's on your desk as well. And you can see colleagues that with no ongoing, with no fiscal note on this bill. I think that speaks to the work that we've done to try to get this into a good place. I've met with many groups and organizations, everyone from U-D-F-C-M and the Labor Commission to hear their concerns Mr. Speaker, but I've also talked with folks who have sweatshirts that have holes in them from welding projects that are building our state. I've shaken hands that are weathered from hammering, drywall, building the projects, building the infrastructure that our state relies on. And I've spent a lot of time with people with dirty boots who are out there working hard to make sure that our state is running 24 7, that the lights are on when we flip the switch, and that our roads are safe and our buildings are secure. Finally, I would just con uh, uh, I would just say Mr. Speaker, that we have a responsibility to our taxpayers that when we are using taxpayer money that comes from individuals hard earned paychecks, that when we're investing that taxpayer money into public infrastructure projects, that we're make sure we're not undercutting the local workers that are already doing the hard work. So, Mr. Speaker, I'm happy to answer questions and colleagues, I would ask for your Yes, vote on this bill.

Thank you, Mr. Speaker. I, I rise in opposition to this bill. I, I understand that affordability and is a, is a very intense topic right now, is something that everybody across our state is dealing with. Unfortunately, this is not the way that we, we, uh, address that. This is classic interference in the free market. Uh, it represents government overreach and it, it, it, what it does is it distorts labor markets. Um, this creates unneeded bureaucracy and, uh, and that these comp that these, uh, companies will have to be looking over their shoulders all the time at which enterprising lawyer or attorney is, is, is gonna come after them, uh, because they did something wrong. This will also increase our costs, uh, to the state. Um, uh, it, when, when you, when you're increasing the, the cost that you have to pay, that that'll increase, that'll pass on the cost to the taxpayers. Um, so it also, um, there's no correlation that says that forcing a company to pay more will improve, improve quality as well. So I I just rise in strong opposition to this. This is a, this will be a, a tax increase. Uh, or will taxpayers will get less for their money. It distorts labor markets. It will allow, um, it will also hurt, uh, companies that are smaller on the, on the, on the smaller end when they're trying to get in. Um, I, the real minimum wage is zero if you're not. Uh, there are a lot of people that are learning that are coming up and learning a trade or a, a skill. And if they don't, if they, if they're not worth what, what this bill says that they have to pay them, they just won't be paid if they won't be able to break into the market. This will also, uh, help a lot of the larger companies that are already have an in on the market, that have a, uh, an in, they've, they've figured it out. But for an entrepreneur trying to get in that this will be disproportionately, uh, uh, bad for them. So I encourage no support. This is, uh, not what Utah does. Utah should not be modeling what it does after the federal government. We do things better here and we need to, we need, i, I can encourage us a no and and encourage us to, to keep doing things the way we do in Utah, not, not the way that the federal government does it. Thank you.

Thank you, Mr. Speaker. Uh, our rise in opposition to the bill. I think this will raise the cost of construction and housing in the state. Thank you, Mr. Speaker.

Thank you, Mr. Speaker. I wanna have a little bit better balance here. I rise in support of the bill. Uh, I've been here for a while and I remember several years ago we built a Alpine highway and our state awarded the bid to an out-of-state contractor. That was the low bid. It was a nightmare. The bid was for 139 million. Poor workmanship, even with inspections, it got constructed and significant amounts had to be redone. It ended up costing over 170 million instead of 139. And it still has problems today. I like this bill 'cause it's not grasping some artificial wage or nebulous from the federal government or whatever. It goes into the county where the work's being done. And it's a prevailing wage. This is the common wage that's already being paid. We, in my opinion, we want Utahans to get a fair wage for the work that they're doing. And we don't want to track that low ball out of state employers that come in, make some money, and then leave and leave us with their problems. I strongly support this. Thank you, Mr. Speaker.

Thank you, Mr. Speaker. I want to give you a very short math and econ lesson 'cause I know that's why you came today. Um, so think about this. This doesn't necessarily have anything to do with out of state or remote or whatever. Suppose that you have a market, a count county where there's five contractors that could bid on a government project. Those five will have different cost structures. Some of them have more overhead, some of 'em have more labor. They have different structures by setting a minimum wage only on the labor component. What you're saying is that if a company has high overhead, but low weight labor, they can't compete. So you're preferencing companies that have low overhead and high labor costs. So all of those companies that have the low labor costs will have to raise because they don't meet the minimum wage. They will have to raise their labor costs up to the minimum. And in other words, they won't get the bid. So this essentially disqualifies companies that have a different cost structure that favors lower cost of labor. They will not be able to win bids because that's not their cost structure. 'cause they have a different way of doing business. So with that, what you're going to do is we're you're gonna stick in something that you think is supposed to help certain people, but as my colleague from Weber County said, the actual result is those companies won't get any bids. They won't get any jobs, and those workers won't get paid at all. So rather than enforcing a minimum wage on them, the actual payment to them is gonna be zero because they will not be able to compete in that marketplace. So that has nothing to do with in-state versus out-of-state. And the same argument as well, if they just paid them more, we'd get a better result. Uh, I don't see how that works. If you've got a successful contracting company and you're building projects that are doing, uh, a great job and you pay your workers more, you don't, you have the same workers, you have the same supervisors, the same business practices, the same management, you're just paying more for the same thing. It doesn't make sense to pay more for the same thing. But then again, doesn't matter because they're not gonna get the bid anyway. 'cause their cost structure doesn't meet this paradigm. So I would oppose the bill because it interferes with markets in an inappropriate way.

Thank you, Mr. Speaker. I rise in opposition to this bill also, and it's probably for a little bit more of a personal reason. My husband actually is a plumber and a contractor. And as I look at this bill, I'm like, this is designed to make it so that his prices are gonna have to go up and he's not gonna be able to compete because he's gonna have to pay a government set wage. This seems to be, I know it said that it's not a union bill, but it does seem to be really favoring the unions being able to monopolize a market or bigger corporations. And I think we have to watch out for our small businesses. So I encourage my colleagues to oppose, even though I know that the sponsor is trying to do something good here. This is, I, the intention is good, but I think our method's off.

Thank you, Mr. Speaker. Um, many of you know I'm just a guy who sells shelving. Um, but with that we, we hire a lot of these kind of people. Um, I was just looking at a, a page that I got on this bill. They're suggesting that a common laborer would make 1269 an hour with zero credit for benefits. My son is a common laborer. He just got home from a mission. He's working for a general contractor up in Hebrew on a large project. He started at $23 an hour, I believe, and he's now making $26 an hour plus they're paying him some mileage to drive out of town, so to speak. Uh, you know, up the canyon a little ways. Um, I I just can't see how someone would be be paying less than that. So what is the point here to, to set a minimum? Uh, we have a young man that works for us at our company, and I'm so proud of him. He installs doors for us. Um, common laborer, you might call him, but he works very hard. He comes in under budget on all my projects. And I was talking to him the other day and I, I said, uh, uh, it's a while back. I said, uh, he just had a second child. And I said, do you want a home? He goes, I do. And I said, does your wife work? He says, no, she doesn't. He's a common laborer working for our company, and he doesn't, his wife doesn't have to work, and he's able to provide on our wage. Now I know that that's not necessarily the case all the way around, but he's one of our high compensated guys because he works hard. If you have somebody that's not performing well for you, but you just need to put a body on a job and you're required to pay one of these wages, then you might be paying somebody above what you feel they're worth. One final thing in my company, we're, we're not a huge company. And a few years ago when we were even smaller, we used to have to pay Davis Bacon wages. So when you work for the federal government, you have to pay a minimum wage. And it was much more than what my guys were making at the time. And the owner of our company had to spend his own time. We didn't have enough accounting staff to do all the paperwork that was required to cover that. So it's extra burden on the company. It doesn't reward necessarily the great workers. And, um, I, I think this is poor policy and it just sets us down a road to even worse policy, like what the federal government's doing. Thank you.

Thank you, Mr. Speaker. This is a tough discussion and a difficult space. I am not, uh, normally into, uh, regulation, but, uh, I would say that we need to get our act together with regard to state construction projects, having seen some, some, uh, things going on that need to be fixed, uh, that auditors are aware of. And so I'm gonna vote for this bill today reluctantly, uh, because I think it will, uh, standardize at least state construction projects, uh, in a better way and make sure that we're paying proper workers' compensation and all those things that need to be done so it doesn't, uh, end up getting, being ta passed onto the taxpayer. So, uh, I, I appreciate, uh, what the, uh, sponsor's trying to do here. I know this is a very difficult space, but, but I will vote for this bill today. Thanks speaker.

It's a, he's a great colleague too, so I'm not a, not in in the least bit offended. Um, thank you Mr. Speaker. And, um, glad Mr. Speaker. I only bring exciting bills to this body where we can have good discussion and, and I think the discussion that we've had today is really important and we need to have more of them because I can tell you that, um, some, and, and, and when we've been working on this legislation, we've been caught in this catch 22 where on one hand, critics of the bill will say that this will increase the cost of construction. But I would as a conjecture to say, if it's increasing the cost of construction, then what are the, what are the current rates that we're paying? You can see in one of the opposition letters that are con there are very competitive construction wages right now, and that's a really good thing. And because of that, I would, I would say, and the fiscal note would reflect that this would not increase the price, the price of construction dramatically. But what happens when that trend goes the other way? And we make sure that we are setting a standard across the board. The free market has also been mentioned, but recognize that this is, we're not telling McDonald's what to do with their cooks and their servers and their service staff. This is solely when the government is leading the contract. And so we don't have a, we don't have an option to be involved or to not be involved. I would venture to say that we need to set a standard. And so what is the standard? A minimum wage? Once again, using the restaurant example to set a minimum wage would to say that in St. George, Logan Provo and Salt Lake City, that a cook working at a restaurant has to make x amount of money. But once again, using private sector data, what we would be doing here is the government saying that we're gonna be responsible stewards of taxpayer investment. That when we are investing in a project in Logan or in Provo, we make sure that we're not building a contract that undercuts the local jobs that are in that area right now. And, and I think that's an important distinction. Um, Davis Bacon was also mentioned, and I would say Mr. Speaker Davis and Bacon were, were two Republicans. I know, uh, maybe not everyone's favorite Republicans, but this is not a Davis Bacon bill. And I'll tell you why. As we met with contractor, after contractor, after contractor, they highlighted the challenges of working on federal projects. And so because of that, particularly if you look at the first substitute of the bill, we have paired back the reporting requirements, certified payroll and different things like that significantly. So really what this is about is setting the standard when we are building it. Finally, I just wanna talk about the dignity of work and what that means to our state. The dignity of work that's been mentioned from, uh, Dr. Martin Luther King to Senator Corinne, Maine, to many of us on this floor, it's something that is so important to us and that dignity of work is not just about hammering a nail or welding a pipe or putting together, uh, wires when you're an electrician, but it's about when you know, when you do a hard day's work, that you can come home to your family, proud of the work that you did, and pr and make sure that you have that stability and that safety, that one car accident or one surprise medical bill won't put you behind the eight ball to now you're struggling to make ends meet. And so once again, I would say that remember what we're talking about with HB 2 45 with government contracts, government investment, if, uh, that I think that is a really key distinction here. But more than anything, I think this is shows that our construction workers across the state, that we've got their back, that we want to enhance the dignity of work and continue to build a better Utah for everyone. Thank you, Mr. Speaker.