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| Montana Administrative Register Notice 24-17-320 | No. 21 11/10/2016 | |
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BEFORE THE DEPARTMENT OF LABOR AND INDUSTRY OF THE STATE OF MONTANA
TO: All Concerned Persons
1. On December 2, 2016, at 10:00 a.m., the Department of Labor and Industry (department) will hold a public hearing in the second floor conference room (conference rooms A and B), 1805 Prospect Avenue, Helena, Montana, to consider the proposed amendment of the above-stated rules.
2. The department will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the department no later than 5:00 p.m., on November 29, 2016, to advise us of the nature of the accommodation that you need. Please contact the Labor Standards Bureau, Employment Relations Division, Department of Labor and Industry, Attn: Mike Smith, P.O. Box 201503, Helena, MT 59620-1503; telephone (406) 444-1741; fax (406) 444-7071; TDD (406) 444-0532; or e-mail [email protected].
3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
24.17.127 ADOPTION OF STANDARD PREVAILING RATE OF WAGES (1) through (1)(d) remain the same. (e) The current building construction services rates are contained in the (f) The current nonconstruction services rates are contained in the (g) The current heavy construction services rates are contained in the (h) The current highway construction services rates are contained in the (2) and (3) remain the same.
AUTH: 2-4-307, 18-2-409, 18-2-431, MCA IMP: 18-2-401, 18-2-402, 18-2-403, 18-2-406, 18-2-411, 18-2-412, 18-2-413, 18-2-414, 18-2-415, 18-2-422, 18-2-431, MCA
REASON: There is reasonable necessity to update the prevailing wage rates for building construction services, heavy construction services, highway construction services, and nonconstruction services following the annual survey of wages that is provided for in 18-2-413, 18-2-414, and 18-2-415, MCA, respectively. The department surveys employers and applies the methodologies provided by ARM 24.17.119 through 24.17.122 to determine those prevailing wage rates.
24.17.501 PUBLIC WORKS CONTRACTS FOR CONSTRUCTION SERVICES SUBJECT TO PREVAILING RATES (1) remains the same. (2) Building construction projects generally are the constructions of sheltered enclosures with walk-in access for housing persons, machinery, equipment, or supplies. It includes all construction of such structures, incidental installation of utilities and equipment, both above and below grade level, as well as incidental grading, utilities and paving. (a) Work performed in new or reopened pits that produce aggregate, asphalt, concrete or backfill when the pit does not normally sell to the general public that is incidental to the project is considered part of the construction phase. (a) and (b) remain the same but are renumbered (b) and (c). (3) Highway construction projects include, but are not limited to, the construction, alteration, or repair of roads, streets, highways, runways, taxiways, alleys, trails, paths, and parking areas, bridges constructed or repaired in conjunction with highway work, and other similar projects not incidental to building construction or heavy construction. (a) Work performed in new or reopened pits that produce aggregate, asphalt, concrete or backfill when the pit does not normally sell to the general public that is incidental to the project is considered part of the construction phase. (4) Heavy construction projects include, but are not limited to, those projects that are not properly classified as either "building construction" (a) Work performed in new or reopened pits that produce aggregate, asphalt, concrete or backfill when the pit does not normally sell to the general public that is incidental to the project is considered part of the construction phase.
AUTH: 18-2-431, MCA IMP: 18-2-401,
REASON: There is reasonable necessity to amend ARM 24.17.501 to clarify when work in pits is considered to be part of a construction project, in order to address recent questions on the issue. In addition, there is reasonable necessity to update the list of examples to provide additional guidance to contracting agencies and to vendors. There also is reasonable necessity to update the implementing citations to reflect the 2013 statutory revisions that moved the certain provisions regarding construction services to new sections of the MCA, while the rule was otherwise being amended.
4. Copies of the proposed 2017 publications, identified as "preliminary building construction rates," "preliminary highway construction rates," "preliminary heavy construction rates," and "preliminary nonconstruction rates" are available and can be accessed online at: http://erd.dli.mt.gov/labor-standards.
5. A printed version of the proposed 2017 publications is also available by contacting Mike Smith at the address and e-mail listed in paragraph 2 of this notice.
6. Concerned persons may present their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Labor Standards Bureau, Employment Relations Division, Department of Labor and Industry, Attn: Mike Smith, P.O. Box 1503, Helena, MT 59620-1503; fax (406) 444-7071; or e-mailed to [email protected], and must be received no later than 5:00 p.m., December 9, 2016.
7. An electronic copy of this notice of public hearing is available through the department's web site at http://dli.mt.gov/events/calendar.asp, under the Calendar of Events, Administrative Rules Hearings Section. The department strives to make the electronic copy of this notice of public hearing conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems, and that a person's difficulties in sending an e-mail do not excuse late submission of comments.
8. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program or areas of law the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the Department of Labor and Industry, attention: Mark Cadwallader, 1315 E. Lockey Avenue, P.O. Box 1728, Helena, Montana 59624-1728, faxed to the department at (406) 444-1394, e-mailed to [email protected], or may be made by completing a request form at any rules hearing held by the agency.
9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
10. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rules may significantly and directly impact small businesses. The proposed amendments will have an impact on some, but not all, small businesses (those with less than 50 full-time employees). The proposed amendments directly affect the wages that must be paid for work on Montana public works contracts. The types of businesses affected are primarily those in the construction industry, but only affect those businesses that perform (or seek to perform) work on public works projects. In addition, there are businesses that provide certain types of nonconstruction services to state and local government agencies that are subject to payment of the prevailing wage rate. The types of nonconstruction service businesses that potentially are subject to the award of a public works contract are listed in 18-2-401(9), MCA.
There is no single effect on small businesses as a result of the proposed amendments. Some employers may have to pay higher wages as a result of changes to the prevailing wage rates; other employers may have a wage structure that is the same as or higher than the prevailing wage rate. Historically, some employers have stated that the prevailing wage rates are set too high, while other employers have stated that the rates are too low. In certain cases the difference between the established prevailing wage rate and the employer's customary wage rate may be significant, but it is unclear whether that difference will result in a significant change to the profitability of any given small business, as there are many other economic factors at play.
Montana law requires that prevailing wage rates be set following an annual survey of wages. There is an established statutory and administrative formula that establishes the prevailing wage rate for each work classification, based on the data and information gathered. The alternative to amending the wage rates is to not amend the rate, thus freezing the wage rate at the last-adopted level. Some employers would probably be adversely affected by the failure to adopt new prevailing wage rates. The department believes that under either alternative, some small businesses will be adversely affected by the selected alternative. The small businesses likely to be adversely affected by adoption of new rates are probably not the same as those that are likely to be adversely affected by not adopting new rates.
11. The department's Hearings Bureau has been designated to preside over and conduct this hearing.
/s/ Mark Cadwallader /s/ Pam Bucy Mark Cadwallader Pam Bucy, Commissioner Alternate Rule Reviewer DEPARTMENT OF LABOR AND INDUSTRY
Certified to the Secretary of State October 31, 2016.
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For questions about the organization of the ARM or this web site, contact [email protected].
