2022 -- H 7027

========

LC003686

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

____________

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- LABOR AND PAYMENT OF DEBTS

BY CONTRACTORS

     Introduced By: Representatives Edwards, Bennett, Morales, Potter, Kennedy, Kazarian,
Kislak, and Fellela

     Date Introduced: January 10, 2022

     Referred To: House Labor

     It is enacted by the General Assembly as follows:

     SECTION 1. Findings.

     The General Assembly recognizes and declares that:

     (1) It is the intent of the General Assembly in enacting this act to protect the state's

proprietary and financial interests in major school construction projects by requiring participating

contractors and subcontractors working on such projects to maintain effective apprenticeship

training programs as a means for ensuring they will deploy properly trained craft labor required for

these projects;

     (2) New school construction is a critical and pressing need for Rhode Island. A 2017 report

commissioned by the School Building Authority, State of Rhode Island Schoolhouses, identified

more than two billion two hundred million dollars ($2,200,000,000) in deficiencies in the state's

three hundred six (306) public schools. Subsequently, state and local authorities allocated millions

of dollars to fund new school construction. It is essential that these vital resources be administered

carefully to ensure the delivery of safe, timely, high-quality construction projects. To this end,

public contracts awarded for this work must fully comply with the intent and purpose of existing

state law provisions requiring the use of qualified, responsible bidders pursuant to § 45-55-5;

     (3) School construction projects valued at five million dollars ($5,000,000) or more are

inherently complex undertakings that utilize multiple site contractors and subcontractors and

dozens or even hundreds of skilled craft personnel in various specialized trades. Errors in

construction planning on such projects can result in cost overruns, inferior quality, increased safety

risks, and schedule delays that can disrupt the timely delivery of educational services. Such effects

are especially problematic where they are caused by flaws in project staffing insofar as construction

is both a highly skilled and labor­intensive industry. While these challenges exist under virtually

any market conditions, the construction industry is currently facing acute, widespread labor

shortages that pose unprecedented risks to future project delivery. Unless effective policy responses

are developed to address this skills crisis, it is estimated there will be a national shortage of one

million five hundred thousand (1,500,000) construction workers by 2022. Consider the following

research studies: The Associated General Contractors of America, Eighty Percent of Contractors

Report Difficulty Finding Qualified Craft Workers to Hire As Association Calls for Measures to

Rebuild Workforce (August 29, 2018); Construction Labor Market Analyzer, Construction Users

RoundTable, The Long-Term Outlook for Construction 6 (2017); Petrochemical Update, Heather

Doyle, Craft Labor Shortage Seriously Affecting Mega Projects: Poll, (June 29, 2017). Given these

circumstances, Rhode Island, like virtually all other states, has been struggling for several years

with this skills gap and has been working to address the growing risks posed by this challenge.

Building Futures, Gerard M. Waites, Ahead of the Curve: Increasing Apprentice Utilization in

Rhode Island's Construction Industry, (March 2013); Building Futures, Beth Ashman-Collins,

Phase 1 - Skills Gap Analysis, RI Construction Trades. (April 25, 2008);

     (4) These construction labor shortages, which have been extensively documented in both

national and local research reports, are already causing serious disruptions to project delivery in

the form of negative effects on project cost, schedule, safety, and quality. Consider the following

research studies: Virtual Builders Exchange, Adolfo Pesquera, Labor Shortages Spur Increased

Pay/Benefits, Yet Construction Firms Bullish on 2019,(January 4, 2019); Associated Builders and

Contractors, Inc., ABC Highlights Construction Worker Shortage During National Apprenticeship

Week, (November 15, 2017); The Aspen Institute: Workforce Strategies Initiative, Maureen

Conway and Allison Gerber, Construction Pre-Apprenticeship Programs: Results from a National

Survey 6-7 (2009);

     (5) Substantial research also shows that apprenticeship training programs are one of the

most viable solutions for addressing these challenges because it has long been recognized as a

matter of public policy and industry practice that using apprenticeship training programs effectively

and reliably develops a skilled workforce to meet our nation's construction industry needs,

including critical infrastructure programs, such as educational facilities. To this end, the U.S.

Congress passed the National Apprenticeship Act, Pub. L. No. 75-308, 50 Stat. 664, in 1937 to

promote the use of structured education and training in the skilled crafts and trades through formal

LC003686 - Page 2 of 10

apprenticeship training programs;

     (6) The value, benefits, and utility of using apprenticeship-training programs in the

construction industry have been verified by numerous public and private research projects over the

past several years. Consider the following research studies: Case Western Reserve University and

U.S. Department of Commerce, The Benefits and Costs of Apprenticeship: A Business Perspective;

The Council of Economic Advisors, Addressing America's Reskilling Challenge 7-8 (2018); The

Workforce Training & Education Coordinating Board, a Washington state agency, Workforce

Training Results (2015); U.S. Departments of Labor, Commerce, Education, and Health and

Human Services, What Works in Job Training: A Synthesis of the Evidence 8 (2014); The Aspen

Institute: Workforce Strategies Initiative, Matt Helmer and Dave Altstadt, Apprenticeship:

Completion and Cancellation in the Building Trades 8-9 (2013); Mathematica Policy Research,

Debbie Reed et. al, An Effectiveness Assessment and Cost-Benefit Analysis of Registered

Apprenticeship in ten (10) States (2012); and Urban Institute, Robert Lerman et al., The Benefits

and Challenges of Registered Apprenticeship: Sponsors' Perspective ii (2009) .

     (7) Given these factors, apprenticeship programs that are operated in accordance with

federally established qualification standards under 29 C.F.R. § 29 have been relied upon for more

than eighty (80) years as the most effective and reliable method for conducting skills training in

construction, and such programs are broadly relied upon for addressing the industry's current skills

crisis. Recognizing these benefits, approximately a dozen states have enacted legislation requiring

contractors to participate in formal apprenticeship programs as a condition for performing public

works projects. Rhode Island adopted such a policy for general public works projects in 2014 by

enacting § 37-13-3.1. Private sector construction organizations, such as the Construction Users

Roundtable, support similar strategies and have recommended that those responsible for large

capital projects require site contractors to participate in credible skills training programs as a

condition of performing work on their projects. Consider the following research study:

Construction Users Roundtable, Skilled Labor Shortage Risk Mitigation (January 2015); and

     (8) Requiring contractors and subcontractors on major school construction projects to

participate in apprenticeship training programs will help ensure that craft labor personnel on such

projects are properly trained by verifying that they are either apprentices currently enrolled in bona

fide programs or graduates of such programs. These efforts will also promote needed workforce

development efforts in construction that are critical for ensuring future projects are properly staffed

with qualified construction craft personnel.

     SECTION 2. Sections 37-13-1, 37-13-3.1 and 37-13-14.1 of the General Laws in Chapter

37-13 entitled "Labor and Payment of Debts by Contractors" are hereby amended to read as

LC003686 - Page 3 of 10

follows:

     37-13-1. Definitions.

     As used in this chapter:

     (1) "Approved apprenticeship program" or "apprenticeship program" means an

apprenticeship program that has been approved by the U.S. Department of Labor, or by a

recognized state apprenticeship agency, pursuant to 29 C.F.R. Parts 29 and 30; however, such

programs shall not include those that have obtained only provisional approval status. The required

apprenticeship programs may either be programs that have specifically allocated funding and are

subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.

("ERISA"), or non-ERISA programs financed by general funds of employers.

     (1)(2) "Public works" means any public work consisting of grading, clearing, demolition,

improvement, completion, repair, alteration, or construction of any public road or any bridge, or

portion thereof, or any public building, or portion thereof, or any heavy construction, or any public

works projects of any nature or kind whatsoever.

     (3) "School construction contract" means any construction contract for a school building

or any school-related facility that is funded with public money.

     (2)(4) "School transportation services" means those transportation and related services

provided for the transportation of public and private students pursuant to §§ 16-21-1 and 16-21.1-

8.

     (5) "User agency" means the state, municipality, quasi-governmental agency, or other

entity that is responsible for management of a school construction contract.

     37-13-3.1. State public works contract apprenticeship requirements.

     Notwithstanding any laws to the contrary, all general contractors and subcontractors who

perform work on any public works contract awarded by the state after passage of this act and valued

at one million dollars ($1,000,000) or more shall employ apprentices required for the performance

of the awarded contract. The number of apprentices shall comply with the apprentice-to-

journeyman ratio for each trade approved by the apprenticeship council of the department of labor

and training. To the extent that any of the provisions contained in this section conflict with the

requirements for federal aid contracts, federal law and regulations shall control.

     The provisions of this section shall not apply to contracts for school transportation services.

     37-13-14.1. Enforcement -- Hearings.

     (a) Before issuing an order or determination, the director of labor and training shall order

a hearing thereon at a time and place to be specified, and shall give notice thereof, together with a

copy of the complaint or the purpose thereof, or a statement of the facts disclosed upon

LC003686 - Page 4 of 10

investigation, which notice shall be served personally or by mail on any person, firm, or corporation

affected thereby. The person, firm, or corporation shall have an opportunity to be heard in respect

to the matters complained of at the time and place specified in the notice, which time shall be not

less than five (5) days from the service of the notice personally or by mail. The hearing shall be

held within ten (10) thirty (30) days from the order of hearing. The hearing shall be conducted by

the director of labor and training or his or her designee. The hearing officer in the hearing shall be

deemed to be acting in a judicial capacity and shall have the right to issue subpoenas, administer

oaths, and examine witnesses. The enforcement of a subpoena issued under this section shall be

regulated by Rhode Island civil practice law and rules. The hearing shall be expeditiously

conducted, and upon such hearing, the hearing officer shall determine the issues raised thereon and

shall make a determination and enter an order within ten (10) thirty (30) days of the close of the

hearing, and forthwith serve a copy of the order, with a notice of the filing thereof, upon the parties

to the proceeding, personally or by mail. The order shall dismiss the charges or direct payment of

wages or supplements found to be due, including interest at the rate of twelve percentum (12%) per

annum from the date of the underpayment to the date of payment, and may direct payment of

reasonable attorney's fees and costs to the complaining party.

     (b) In addition to directing payment of wages or supplements including interest found to

be due, the order shall also require payment of a further sum as a civil penalty in an amount up to

three times the total amount found to be due. Further, if the amount of salary owed to an employee

pursuant to this chapter but not paid to the employee in violation of thereof exceeds five thousand

dollars ($5,000), it shall constitute a misdemeanor and shall be referred to the office of the attorney

general. The misdemeanor shall be punishable for a period of not more than one year in prison

and/or fined not more than one thousand dollars ($1,000). In assessing the amount of the penalty,

due consideration shall be given to the size of the employer's business, the good faith of the

employer, the gravity of the violation, the history of previous violations, and the failure to comply

with recordkeeping or other nonwage requirements. The surety of the person, firm, or corporation

found to be in violation of the provisions of this chapter shall be bound to pay any penalties assessed

on such person, firm, or corporation. The penalty shall be paid to the department of labor and

training for deposit in the state treasury; provided, however, it is hereby provided that the general

treasurer shall establish a dedicated "prevailing wages enforcement fund" for the purpose of

depositing the penalties paid as provided herein. There is hereby appropriated to the annual budget

of the department of labor and training the amount of the fund collected annually under this section,

to be used at the direction of the director of labor and training for the sole purpose of enforcing

prevailing wage rates as provided in this chapter.

LC003686 - Page 5 of 10

     (c) For the purposes of this chapter, each day or part thereof of violation of any provision

of this chapter by a person, firm, or corporation, whether the violation is continuous or intermittent,

shall constitute a separate and succeeding violation.

     (d) In addition to the above, any person, firm, or corporation found in violation of any of

the provisions of this chapter by the director of labor and training, an awarding authority, or the

hearing officer, shall be ineligible to bid on, or be awarded work by, an awarding authority or

perform any such work for a period of no less than eighteen (18) months and no more than thirty-

six (36) months from the date of the order entered by the hearing officer. Once a person, firm, or

corporation is found to be in violation of this chapter, all pending bids with any awarding authority

shall be revoked, and any bid awarded by an awarding authority prior to the commencement of the

work shall also be revoked.

     (e) In addition to the above, any person, firm, or corporation found to have committed two

(2) or more willful violations in any period of eighteen (18) months of any of the provisions of this

chapter by the hearing officer, which violations are not arising from the same incident, shall be

ineligible to bid on, or be awarded work by, an awarding authority or perform any work for a period

of sixty (60) months from the date of the second violation.

     (f) The order of the hearing officer shall remain in full force and effect unless stayed by

order of the superior court.

     (g) The director of labor and training, awarding authority, or hearing officer shall notify

the bonding company of any person, firm, or corporation suspected of violating any section of this

chapter. The notice shall be mailed certified mail and shall enumerate the alleged violations being

investigated.

     (h) In addition to the above, any person, firm, or corporation found to have willfully made

a false or fraudulent representation on certified payroll records or in reporting their apprenticeship

information to any government agency shall be referred to the office of the attorney general. A first

violation of this section shall be considered a misdemeanor and shall be punishable for a period of

not more than one year in prison and/or fined one thousand dollars ($1,000). A second or

subsequent violation of this section shall be considered a felony and shall be punishable for a period

of not more than three (3) years imprisonment, a fine of three thousand dollars ($3,000), or both.

Further, any person, firm, or corporation found to have willfully made a false or fraudulent

representation on certified payroll records or in reporting their apprenticeship information to any

government agency shall be required to pay a civil penalty to the department of labor and training

in an amount of no less than two thousand dollars ($2,000) and not greater than fifteen thousand

dollars ($15,000) per representation.

LC003686 - Page 6 of 10

     SECTION 3. Chapter 37-13 of the General Laws entitled "Labor and Payment of Debts by

Contractors" is hereby amended by adding thereto the following section:

     37-13-3.3. Public school construction contract apprenticeship requirements.

     (a) Notwithstanding any laws to the contrary, all specifications in any invitations to bid on

any school construction contract valued at five million dollars ($5,000,000) or more shall include

a requirement that all bidders responding to an invitation to bid on a school construction contract

shall have an approved apprenticeship program for all apprenticable crafts or trades that will be

employed on the project at the time of bid. All bidders responding to such invitation to bid shall

also provide proof in the bid package of the existence of an approved apprenticeship program for

all crafts or trades that will be employed on the project by all contractors and subcontractors needed

for the project. All general contractors and subcontractors who perform work on any school

construction contract valued at five million dollars ($5,000,000) or more that is awarded after the

effective date of this chapter shall ensure that no less than ten percent (10%), but with a goal of at

least fifteen percent (15%), of the labor hours worked on the project shall be performed by

apprentices for all apprenticable crafts or trades that will be employed on the project. The provisions

of the section shall only apply to contractors and subcontractors with five (5) or more employees.

     (b) The ten percent (10%) apprenticeship requirement shall be applied per month.

     (c) All bids for such school construction contracts valued at five million dollars

($5,000,000) or more must fully comply with the intent and purpose of existing state law provisions

requiring the use of qualified, responsible bidders pursuant to § 45-55-5, including the criteria that

invitation for such bids shall reference this chapter when enumerating the objective measurable

criteria that will be used to make awards, as required by§ 45-55-5 (b).

     (d) Upon petition by a contractor in writing, a user agency may lower the ten percent (10%)

apprenticeship requirement of this section for a specific project for one or more crafts or trades for

the following reasons:

     (1) The demonstrated lack of availability of apprentices and/or lack of apprentice programs

in specific geographic areas; or

     (2) Participating contractors have demonstrated a good faith effort to comply with the

requirements of this section but have not been able to attain the ten percent (10%) requirement.

     (e) Any determination by a user agency to lower the apprenticeship requirements according

to this subsection shall be provided in writing, to the contractor and to the state department of labor

and training.

     (f) The state department of labor and training shall provide information and technical

assistance to any affected user agencies and contractors awarded any school construction contracts

LC003686 - Page 7 of 10

relative to their obligations under this chapter.

     (g) Any contractor or subcontractor awarded a school construction contract shall collect

and submit the following data for each project covered by this section to the user agency on certified

payroll forms, as required by § 37-13-13:

     (1) The name and dollar value of the project being worked on;

     (2) The name of each apprentice, categorized by trade or craft; each apprentice's

registration number; the name and address of each apprentice's approved apprenticeship program;

and the number of hours each apprentice has worked on the project for each month being reported;

     (3) The name of each journey level worker, categorized by trade or craft, and the number

of hours each has worked on the project for each month being reported; and

     (4) If applicable, the number, type, and rationale for the exceptions granted.

     (h) Upon receiving the data from any contractor or subcontractor awarded a school

construction contract, the user agency shall provide the department of administration with said data.

The department of administration shall develop procedures for using and comparing said data and

shall annually publish a report with aggregate data related to apprenticeships.

     (i) Upon receiving the data from any contractor or subcontractor awarded a school

construction project, the user agency shall provide the department of administration and the

department of labor and training with said data. The department of administration shall develop

procedures for using and comparing said data and shall annually publish a report with aggregate

data related to apprenticeships.

     (j) The user agency shall withhold the next scheduled payment to any contractor or

subcontractor who does not submit the information required by the provisions of this section and

shall also notify the director of labor and training of the contractor's noncompliance. The user

agency shall withhold final payment until all of the information requested by the provisions of this

section have been provided.

     (k) The department of labor and training may also impose a penalty of up to five hundred

dollars ($500) for each calendar day that any contractor or subcontractor does not comply with the

requirement to submit data pursuant to the provisions of this section, as determined by the director

of the department of labor and training. Such penalty shall be paid by the contractor or

subcontractor to the department of labor and training. Mere errors and inadvertent omissions shall

not be grounds for imposing a penalty under this section. The severity of any penalties shall be

based on the facts and circumstances involved in the violation including whether there are reports

or multiple violations and/or willful conduct.

     (l) All penalties assessed pursuant to the provisions of this section shall be paid to the

LC003686 - Page 8 of 10

department of labor and training's dedicated "prevailing wage enforcement fund" and be deposited

in a restricted receipt account.

     (m) Failure of the contractors and subcontractors required to utilize apprentices or be

exempted shall be considered a material breach of their school construction contract, and they shall

be subject to any and all applicable penalties under their contract with the user agency.

     (n) Any contractor or subcontractor aggrieved by any action taken by the director of the

department of labor and training or the director's designated hearing officer, pursuant to the

provisions of chapter 13 of title 37, may obtain a review thereof for the purpose of obtaining relief

from the action or lack of action pursuant to§ 37-13-15.

     (o) To the extent that any of the provisions contained in this chapter conflict with the

requirements for federal aid contracts, federal law and regulations shall control.

     SECTION 4. This act shall take effect upon passage and shall be effective for all contracts

entered into on and after July 1, 2022.

========

LC003686

========

LC003686 - Page 9 of 10

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS -- LABOR AND PAYMENT OF DEBTS

BY CONTRACTORS

***

     This act would require that bidders on public school construction contracts valued at five

million dollars ($5,000,000) or more must have an apprenticeship program that complies with the

provisions of this act. This act would also provide that any entity with an apprenticeship program

shall truthfully report information regarding the program to the department of labor and training

(DLT).

     This act would take effect upon passage and would be effective for all contracts entered

into on and after July 1, 2022.

========

LC003686

========

LC003686 - Page 10 of 10