SB 999 — AN ACT CONCERNING A JUST TRANSITION TO CLIMATE-PROTECTIVE ENERGY PRODUCTION AND COMMUNITY INVESTMENT.

There is a potential cost to municipalities resulting from the bill, which may increase the costs of certain covered projects that are funded by towns.

To the extent that the bill increases the total cost of covered projects by requiring that workers be paid the prevailing wage, there is a cost equal to the differential in labor-related costs between such wages and those that would otherwise apply.

This does not impact projects that currently must comply with prevailing wage laws or are covered by a project labor agreement.

There is also a potential General Fund revenue gain from penalties for noncompliance with the bill's provisions.

The amendment specifies that violations result in penalties and sanctions but does not specify further details.

As such, any potential revenue is anticipated to be sSB999 / File No.

779 sSB999 File No.

779 minimal, and enforcement by the Department of Labor is not anticipated to result in any costs to the agency.

Senate "A" redefined covered projects in the underlying bill and established penalties for false statements.

House "A" removed the penalties established in Senate "A" and eliminatesanypotentialrevenuegainandcostsresultingfromincreased penalties and incarceration related to Class D felony charges.

The Out Years The potential cost to municipalities outlined above will continue into the future subject to the number of covered projects performed that are not already subject to prevailing wage laws.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General 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.

sSB999 / File No.

779 sSB999 File No.

779 OLR Bill Analysis sSB 999 (File 404, as amended by House "A" and Senate "A")* AN ACT CONCERNING A JUST TRANSITION TO CLIMATE- PROTECTIVE ENERGY PRODUCTION AND COMMUNITY INVESTMENT.

SUMMARY Thisbillrequiresrenewableenergyprojectdeveloperstomeetcertain requirements if their project (1) begins construction after July 1, 2021;

(2) has a total nameplate (i.e., generating) capacity of at least two megawatts (MW);

and (3) meets certain other criteria.

These developers must generally (1) establish a workforce development program;

(2) enter into a community benefits agreement with a community organization representing the host community’s residents, iftheproject hasanameplate capacity ofat least five MW;and (3) ensure that the contractors and subcontractors on the project meet certain criteria.

The bill also requires that (1) construction workers on covered projects be paid wages and benefits at least equal to those required under the state’s prevailing wage law and (2) operations, maintenance, and security employees in any building or facility created in the project be paid wages and benefits that are at least equal to those required under the state’s standard wage law (see BACKGROUND).

Under the bill, however, the prevailing wage requirement does not apply if the project is covered by a project labor agreement that meets certain requirements.

*Senate Amendment “A” (1) redefines “covered projects” as renewable energy projects that begin construction on or after July 1, 2021, and have a total nameplate capacity rating of at least two MW, rather than any renewable energy project that has a total construction sSB999 / File No.

779 10 sSB999 File No.

779 cost of at least $2.5 million (§ 1);

(2) explicitly excludes certain projects from being covered projects (§ 1);

(3) applies the state debarment law to certain violations under the bill (§ 2);

(4) creates a penalty for making a false statement on a sworn certification under the bill (§ 4);

and (5) makes various minor and conforming changes (§§ 1 & 3).

*House Amendment “A” removes provisions from the underlying bill (File 404, as amended by Senate Amendment “A”) that would have made it a class D felony for contractors and subcontractors to intentionally make a false written statement on a sworn certification.

EFFECTIVE DATE:

Upon passage COVERED PROJECTS The bill’s requirements apply to “covered projects,” which under the billare renewable energy projectssituated onlandinthe state that begin construction on or after July 1, 2021, and have a total nameplate capacity rating of at least two MW.

They do not include renewable energy projects (1) selected in a competitive solicitation conducted by the Department of Energy and Environmental Protection (DEEP) or an electric distribution company (i.e., Eversource or United Illuminating) and (2) approved by the Public Utilities Regulatory Authority before January 1, 2022.

Under the bill, a “renewable energy project” is a Class I renewable energy source (e.g., solar, wind, fuel cells), but it does not include any offshore wind facility procured under certain laws that authorize DEEP to solicit proposals to procure power from these resources.

WORKFORCE DEVELOPMENT PROGRAMS The bill requires a covered project’s developer to take appropriate actions to ensure that a workforce development program is established.

Under the bill, a “workforce development program” is a program that gives newly hired and existing employees the opportunity to develop skillsthatwillenablethemtoqualifyforhigherpayingjobsonacovered project.

This includes (1) apprenticeship training through an sSB999 / File No.

779 11 sSB999 File No.

779 apprenticeship program registered with the state Department of Labor (DOL) or a federally recognized state apprenticeship agency that complies with federal regulations on apprenticeships and (2) pre- apprenticeship training that will enable students to qualify for registered apprenticeship training.

COMMUNITY BENEFITS AGREEMENTS If a covered project has a nameplate capacity of at least five MW, the bill requires the project’s developer to also take all reasonable actions to ensure that a community benefits agreement is entered into with the appropriate community organizations representing residents of the community where the project will be located (i.e., the host community).

Under the bill, a “community benefits agreement” is an agreement between the covered project’s developer and community-based organizations, or a coalition of them, that details the project’s (1) contributions to the host community and (2) aspects that will mitigate the host community’s adverse conditions and create opportunities for local business, communities, and workers.

CONTRACTOR AND SUBCONTRACTOR CERTIFICATIONS The bill requires a covered project’s developer to take all necessary actions to ensure that each contractor and subcontractor involved in building the project completes a sworn certification that:

1.

it has the necessary resources to perform its portion of the covered project, including the necessary technical, financial, and personnel resources;

2.

it has all of the contractor, specialty contractor, or trade licenses, certifications, or certificates required by the applicable state or local laws;

3.

it participates in apprenticeship training through a DOL- registered apprenticeship program or a federally recognized state apprenticeship agency that complies with federal regulations;

sSB999 / File No.

779 12 sSB999 File No.

779 4.

during the previous three years it has not (a) been debarred by a government agency;

(b) defaulted on a project;

(c) had any license, certification, or other business credential revoked or suspended;

or (d) been found in violation of any law applicable to the contractor’s or subcontractor’s business that resulted in the paymentofafine,backpaydamages,oranyothertypeofpenalty of at least $10,000;

5.

it will not pay personnel employed on the project less than the applicable wage and fringe benefit rates for the classification in which the personnel are employed and required for the project;

and 6.

it has not misclassified and will not misclassify employees as independent contractors.

The bill requires the developer to submit the sworn certifications to the labor commissioner at least 30 days before project construction begins.

Under the bill, the certifications are public documents that must be made available without redaction on DOL’s website within seven days after they were submitted.

Debarment Penalties If a certification contains false, misleading, or materially inaccurate information, the bill subjects the contractor or subcontractor that prepared it, after notice and opportunity to be heard, to debarment under the state’s debarment law, which generally makes a person or firm that disregarded its obligations under the state’s prevailing wage law ineligible to (1) contract with the state or its political subdivisions and (2) work on a public works project covered by the prevailing wage law.

The debarment law requires the labor commissioner to distribute a list of these debarred persons and firms to allstate agencies and political subdivisions.

The bill requires the commissioner to include on the list persons or firms that he found to have submitted false, misleading, or sSB999 / File No.

779 13 sSB999 File No.

779 materially inaccurate information on the sworn certifications required by the bill.

By law, (1) state agencies and political subdivisions cannot award contracts to persons and firms on the list and (2) general contractors on a prevailing wage public works project cannot award any work under the contract to a person or firm on the list.

Both bans last for a period of up to three years, as determined by the labor commissioner, after the debarred person or firm first appears on the list (CGS § 31-53a(b)).

Other Noncompliance Penalties Under the bill, a developer’s failure to take reasonable steps to ensure that the certifications are accurate and truthful is a violation of the bill subject to penalties and sanctions for noncompliance.

It requires the labor commissioner to adopt regulations that establish the applicable penalties and sanctions for this noncompliance.

PREVAILING AND STANDARD WAGES The bill requires each contractor and subcontractor on a covered project to pay each construction employee on the project at least the wages and benefits that the state’s prevailing wage law require for the employee’s corresponding job classification on a public works project.

It subjects the contractors and subcontractors to the prevailing wage law’s reporting and compliance requirements and its penalties and sanctions for violations.

Among other things, this (1) requires them to submit to the project’s developer monthly certified payroll records with certain specified information (e.g., that the wages and benefits meet prevailing wage requirements and that employees have the necessary workers’ compensation insurance coverage);

(2) subjects them to fines between $2,500 and $5,000 for willful failures to pay the required wages;

and (3) makes failing to file the certified payroll records a class D felony subject to a fine of up to $5,000, five years imprisonment, or both.

The bill also requires that each operations, maintenance, and security employee employed in a building or facility that is built in a covered sSB999 / File No.

779 14 sSB999 File No.

779 project be paid at least the prevailing wage or the “standard wage,” including benefits, for the employee’s corresponding job classification.

Exemption for Project Labor Agreements The bill exempts construction projects that are covered by a project labor agreement (PLA) from its prevailing wage requirements.

Under the bill, the PLA must:

1.

bind all contractors and subcontractors on the covered project to the PLA by including specifications in all relevant solicitation provisions and contract documents;

2.

allow all contractors and subcontractors to compete for contracts and subcontracts on the project regardless of whether they are parties to collective bargaining agreements;

3.

establish uniform terms and conditions of employment for all construction labor employed on the project;

4.

guarantee against strikes, lockouts, and similar job disruptions;

5.

have mutually binding procedures for resolving labor disputes;

and 6.

includeanyotherprovisionsnegotiatedbythepartiestopromote the covered project’s successful delivery.

BACKGROUND Prevailing Wage The state’s prevailing wage law requires employers on certain public works projects to pay their construction workers wages and benefits equal to those that are customary or prevailing for the same work, in the same trade or 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).

sSB999 / File No.

779 15 sSB999 File No.

779 Standard Wage The state’s standard wage law generally requires private contractors whodobuildingandpropertymaintenance,propertymanagement,and food service work in state buildings to pay their employees wages and benefits determined by the labor commissioner.

In general, an employee’s standard wage equals the hourly wage and benefits received by the most employees doing the same type of work under a union contract, as long as the contract covers at least 500 employees in HartfordCounty.Ifthere isnosuchcontract,thenthecommissioner sets the hourly rate based on the Federal Register of Wage Determinations, plus a 30% surcharge for health and retirement benefits (CGS § 31-57f).

COMMITTEE ACTION Labor and Public Employees Committee Joint Favorable Substitute Yea 9 Nay 4 (03/23/2021) sSB999 / File No.

779 16