SB 137 — AN ACT CONCERNING GAS, ELECTRIC, SEWER AND WATER DELIVERY WORK.

(NEW)Subsection (Effective(f) Octoberof 1, 2024) (a) Each contractor who has entered into a contract for a public utility project shall (1) pay each construction employee on the project wages and benefits that are not less than the prevailing wage and fringe benefit rates prescribed in section 31-53 of the general2024 statutessupplement forto the correspondinggeneral classificationstatutes in which the employee is employed,repealed and (2)the befollowing subjectis tosubstituted all reporting and compliance requirements in accordancelieu withthereof section(Effective 31-53October of1, the2024): general statutes.

(b)(f) AnyEach contractoremployer thatsubject violatesto the provisions of this section, section 31- 53c, subsection (f) of section 31-53d, [or] section 31-54 or section 2 of this act shall be(1) subjectkeep, maintain and preserve such records relating to penaltiesthe wages and sanctionshours worked by each person performing the work of any mechanic, laborer and worker and a schedule of the occupation or work classification at which each person performing the work of any mechanic, laborer or worker on the project is employed during each work day and week in accordancesuch withmanner and form as the Labor Commissioner establishes to assure the proper payments due to such persons or employee welfare funds under this section, section 31-5331-53c, subsection (f) of section 31-53d, [or] section 31-54 or section 2 of this act, regardless of any contractual relationship alleged to exist between the generalcontractor statutes.and such person, provided such employer shall have the sSB137 / File No.

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303 option of keeping, maintaining and preserving such records in an electronic format, and (2) submit monthly to the contracting agency or the Department of Economic and Community Development pursuant to section 31-53c or to the developer of a covered project, as defined in section 31-53d, or to the public utility, as defined in section 1 of this act, as applicable, by mail, electronic mail or other method accepted by such agency, the Department of Economic and Community Development or such developer or to such public utility, a certified payroll that shall consist of a complete copy of such records accompanied by a statement signed by the employer that indicates (A) such records are correct;

(B) the rate of wages paid to each person performing the work of any mechanic, laborer or worker and the amount of payment or contributions paid or payable on behalf of each such person to any employee welfare fund, as defined in subsection (i) of this section, are not less than the prevailing rate of wages and the amount of payment or contributions paid or payable on behalf of each such person to any employee welfare fund, as determined by the Labor Commissioner pursuant to subsection (d) of this section, and not less than those required by the contract to be paid;

(C) the employer has complied with the applicable provisions of this section, section 31-53c, subsection (f) of section31-53d, [and] section31-54and section 2ofthisact;(D)eachsuch person is covered by a workers' compensation insurance policy for the duration of such person's employment, which shall be demonstrated by submitting to the contracting agency the name of the workers' compensation insurance carrier covering each such person, the effective and expiration dates of each policy and each policy number;

(E) the employer does not receive kickbacks, as defined in 41 USC 52, from any employee or employee welfare fund;

and (F) pursuant to the provisions of section 53a-157a, the employer is aware that filing a certified payroll which the employer knows to be false is a class D felony for which the employer may be fined up to five thousand dollars, imprisoned for up to five years, or both.

This subsection shall not be construed to prohibit a general contractor from relying on the certification of a lower tier subcontractor, provided the general contractor shall not be exempted from the provisions of section 53a-157a if the general contractor sSB137 / File No.

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303 knowingly relies upon a subcontractor's false certification.

Notwithstanding the provisions of section 1-210, the certified payroll shallbe considered a publicrecordandevery personshallhave theright to inspect and copy such records in accordance with the provisions of section 1-212.

The provisions of subsections (a) and (b) of section 31-59 and sections 31-66 and 31-69 that are not inconsistent with the provisions of this section, section 31-53c, [or] 31-54 or section 2 of this act apply to this section.

Failing to file a certified payroll pursuant to subdivision (2) of this subsection is a class D felony for which the employer may be fined up to five thousand dollars, imprisoned for up to five years, or both.

3 October 1, 2024 New31-53(f) sectionStatement Sec.of Legislative Commissioners:

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sSB137 / File No.

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303 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 25 $ FY 26 $ Labor Dept.

GF - Cost 126,426 159,235 State Comptroller - Fringe GF - Cost 44,313 59,084 Benefits1 Labor Dept.

GF - Potential See Below See Below Revenue Gain Judicial Dept.

(Probation);

GF - Potential Minimal Minimal Correction, Dept.

Cost Resources of the General Fund GF - Potential Minimal Minimal Revenue Gain Note:

GF=General Fund Municipal Impact:

Municipalities Effect FY 25 $ FY 26 $ All Municipalities STATE Potential Potential MANDATE 2 - Cost Explanation Section 1 requires any contractor who enters into a contract for a public utility project to provide (1) apprenticeship training through an apprenticeship program registered with the Department of Labor (DOL), or (2) a preapprenticeship training program.

This does not result in any fiscal impact to DOL as its Office of Apprenticeship Training 1The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 41.25% of payroll in FY 25.

2State mandate is defined in Sec.

2-32b(2) of the Connecticut General Statutes, "state mandate" means any state initiated constitutional, statutory or executive action that requires a local government to establish, expand or modify its activities in such a way as to necessitate additional expenditures from local revenues.

sSB137 / File No.

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303 (OAT) currently has capacity to accommodate the higher employer participation that may result.

Section 2 requires DOL to predetermine the prevailing wage and enforce that contractors pay said wage to any person performing work for public utility projects by issuing citations and fines in the amount of $5,000 per offense.

This resultsinapotentialrevenue gainfor theagency to the extent penalties are issued and paid.

Since the bill generally applies to these public utility projects the same enforcement and record keeping requirements as the public works prevailing wage law, this would result in a workload increase to DOL's Wage and Workplace StandardsDivision(WWSD).Suchworkloadincreasewouldrequire the division to hire (a) one wage enforcement agent ($91,634 salary, $37,799 fringe benefits, $9,500 overhead) and (b) one clerical staff ($51,600 salary, $21,285 fringe benefits, $9,500 overhead).

Section 3 expands an existing class D felony related to filing certified payroll,whichresultsinapotentialcosttotheDepartmentofCorrection and the Judicial Department for incarceration or probation and a potential revenue gain to the General Fund from fines.

On average, the marginal cost to the state for incarcerating an offender for the year is $3,300 4 while the average marginal cost for supervision in the community is less than $800 each year for adults and $1,000 each year for juveniles.

Since FY 14, 90 offenses have been recorded for similar violations and no revenue has been collected for fines.

Few, if any, violations are anticipated in the future.

Additionally, there is a potential cost to municipalities beginning in FY 25 associated with an increased cost of projects.

The prevailing wage 4There are currently over 1,700 employer sponsors registered with the OAT.

Inmate marginal cost is based on increased consumables (e.g., food, clothing, water, sewage, living supplies, etc.).

This does not include a change in staffing costs or utility expenses because these would only be realized if a unit or facility opened.

Probation marginal cost is based on services provided by private providers and only includes costs that increase with each additional participant.

This does not include a cost for additional supervision by a probation officer unless a new offense is anticipated to result in enough additional offenders to require additional probation officers.

sSB137 / File No.

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303 provision may result in a potential cost to municipalities (for the municipalshare oftheproject cost)asthere willbeincreasedcontractual costs for these projects beginning in 25.

Ratepayer Impact Statement :

5 The bill requires the payment of prevailing wage for public utility projects resulting in a potential rate increase.

This provision will increase some costs for public utilities that will be passed on to ratepayers through the normal rate recovery process.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation, number of violations and applicable projects.

5The above ratepayer impact will apply to the state and municipalities individually increasing or decreasing cost in line with rates as a whole.

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303 OLR Bill Analysis sSB 137 AN ACT CONCERNING GAS, ELECTRIC, SEWER AND WATER DELIVERY WORK.

SUMMARY This bill requires contractors on certain public utility projects to pay their employees on the project the same prevailing wages and benefits that would be required on public works projects.

The requirement applies to new construction projects with a total cost of at least $1 million and renovation projects with a total cost of at least $100,000.

The bill generally applies to these public utility projects the same enforcement and record keeping requirements as the public works prevailing wage law (see “BACKGROUND”).

Under the bill, a “public utility project” is a project for which one party is a gas company, pipeline company, water company, sewage company,orelectricdistributioncompany(generally,anyofthosetypes of companies that are regulated by the Public Utilities Regulatory Authority (PURA), see BACKGROUND).

The bill requires a public utility that must pay the prevailing wage to recover its costs for doing so through either its base rates or a PURA- approvedraterecovery mechanism,aslong asPURA findsthatthecosts were prudent and reasonably incurred and recoverable under state utility ratemaking laws.

The bill also requires any contractor who enters into a contract for a public utility project, regardless of cost, to offer (1) apprenticeship training through an apprenticeship program registered with the Department of Labor or (2) a pre-apprenticeship training program approved under the apprenticeship laws.

It requires the contractor to sSB137 / File No.

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303 certify, in a way set by the labor commissioner, that it currently meets this requirement.

EFFECTIVE DATE:

October 1, 2024 PREVAILING WAGES Under the state’s prevailing wage law for public works projects, contracts for covered projects must require contractors and subcontractors to pay their construction workers the prevailing wage and benefits.

Contractors who do not provide benefits at the rate required must make up the difference in hourly wages.

The bill requires a contract for certain public utility projects entered into on or after October 1, 2024, to include the same prevailing wage provision.

As under the public works law, the requirement applies to new construction projects with a combined total cost or total bond authorization of at least $1 million and renovation projects with a combined total cost of at least $100,000.

The labor commissioner must determine the prevailing wage and benefit for each trade or occupation and location in the same way that she does under the public works law.

Enforcement The bill imposes the same enforcement provisions as provided under the public works prevailing wage law.

If the labor commissioner, upon inspection or investigation of a complaint, believes that a contractor or subcontractor on a covered public utility project knowingly or willfully failedto pay their employeestheprevailing wage andbenefits,shemust issue a citation to the contractor or subcontractor and may impose a fine of $5,000 per offense.

The commissioner must maintain a list of any contractor or subcontractor that, over the previous three years, violated the public utility prevailing wage requirement or entered into a settlement with the commissioner to resolve a public utility prevailing wage claim.

For those on the list, the commissioner must record the (1) violation’s nature, (2) total amount of wages and benefits in violation or agreed upon in the settlement, and (3) total amount of civil penalties and fines sSB137 / File No.

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303 agreed upon by the commissioner.

The commissioner must review the list each May 1, for the preceding rolling three-year period.

She may refer for debarment (i.e., prohibit from working on state or municipal projects) any contractor or subcontractor that violated the public utility prevailing wage law during that period.

And she must do so for any contractor or subcontractor with whom she entered into one or more settlements totaling over the period more than $50,000 in (1) back wages or fringe benefits or (2) civil penalties or fines.

Any contractor or subcontractor referred for debarment may request a hearing with the commissioner under the Uniform Administrative Procedure Act.

In addition, if a public utility’s contracting officer finds that a contractor or subcontractor on its covered project is not paying the required prevailing wages and benefits, the utility may (1) terminate the contractor’s right to proceed with the work for which there was a failure to pay, with written or electronic notice;

(2) prosecute the work to completion by contract or otherwise;

and (3) hold the contractor and subcontractor’s sureties liable for any excess costs to complete the work.

In the alternative, the utility may withhold payments to the contractor or subcontractor.

Iftheutilitytakeseitherofthesesteps,withintwodaysitscontracting officer must notify the labor commissioner with the contractor’s or subcontractor’s name;

the project and its location;

the violations involved;

the date the contract was terminated, if applicable;

and steps taken to collect the required wages.

The labor commissioner may file a complaint with the proper prosecuting authorities for violations.

Record Keeping Requirement The bill expands the public works prevailing wage law’s record keeping requirements to include covered public utility prevailing wage projects.

Among other things, this requires contractors and subcontractors on a project to submit monthly certified payroll records to the utility.

The records must contain the same information required sSB137 / File No.

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303 under the public works prevailing wage law, including:

1.

detailed payroll records for each employee and 2.

a signed statement that, among other things, (a) the records are correct, (b) the employer met the law’s requirements, and (c) the employer understands the penalties for knowingly filing false payroll records.

The penalties for failing to comply with the certified payroll records requirement or knowingly filing false payroll records are the same as under the public works prevailing wage law (class D felonies with a fine of up to $5,000, up to five years imprisonment, or both).

BACKGROUND Public Works Prevailing Wage Law The state’s prevailing wage law requires contracts on certain public works projects to require that contractors and subcontractors pay their construction workers wages and benefits equal to those that are customary or prevailing for the same work, in the same occupation, in the same town.

The requirement applies to new construction projects of $1 million or more and renovation projects of $100,000 or more (CGS § 31-53).

PURA-Regulated Utility Companies Under the public utility law (CGS § 16-1) and the bill, an “electric distribution company” is generally any person providing electric transmission or distribution services in the state.

It does not include, among other things, a private power producer, a municipal electric utility, or a municipal electric energy cooperative.

A “gas company” is generally any person owning, maintaining, operating, or controlling mains, pipes, or other fixtures in public highways or streets to transmit or distribute gas for sale for heat or power in the state.

It does not include, among other things, (1) a person manufacturing gas through a biomass gasification plant under certain conditions or (2) municipal gas utilities.

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303 A “pipeline company” is generally any person owning, maintaining, operating, or controlling mains, pipes, or other fixtures through, over, or under any public land, water, parkways, highways, parks or public groundstotransport,transmit, or distribute petroleumproductsforhire in the state.

A “sewage company” is generally any person owning, maintaining, operating, or controlling, for general use in any town, city, or borough, or portion of them, in this state, sewage disposal facilities that discharge treated effluent into any waterway in the state.

A “water company” is generally any person owning, maintaining, operating, or controlling any pond, lake, reservoir, stream, well, or distributing plant or system to supply water to at least 50 consumers.

It does not include, among other things, homeowners, condominium associations providing water only to their members;

municipal waterworks systems;

or a district, metropolitan district, municipal district or special services district authorized to supply water.

COMMITTEE ACTION Labor and Public Employees Committee Joint Favorable Substitute Yea 8 Nay 4 (03/19/2024) sSB137 / File No.

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