BEFORE THE DEPARTMENT OF LABOR AND INDUSTRY
OF THE STATE OF MONTANA
In the matter of the amendment of ARM 24.17.103, 24.17.127, and 24.17.501, and the repeal of ARM 24.17.526, pertaining to prevailing wage rates for public works projects
NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL
TO: All Concerned Persons
1. On November 20, 2015, 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 and repeal 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 16, 2015, 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@example.com.
3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
24.17.103 DEFINITIONS As used in this subchapter, the following definitions apply, unless the context of the rule clearly indicates otherwise:
(1) through (10) remain the same.
(11) "Dispatch city" is the courthouse in the city from the following list which is closest to the center of the job and within the same prevailing wage district, if any: Billings, Bozeman, Butte, Great Falls, Helena, Kalispell, and Missoula.
(12) through (24) remain the same.
AUTH: 18-2-409, 18-2-431, 39-3-202, MCA
IMP: 18-2-402, 18-2-403, 18-2-411, 18-2-422, 39-3-201, 39-3-202, 39-3-203, 39-3-204, 39-3-205, 39-3-206, 39-3-207, 39-3-208, 39-3-209, 39-3-210, 39-3-211, 39-3-212, 39-3-213, 39-3-214, 39-3-215, 39-3-216, MCA
REASON: Reasonable necessity exists to modify this section to clarify that, for those prevailing wage rates which use prevailing wage districts, as created by 18-2-411, MCA, the dispatch city is the one listed which is within the same prevailing wage district.
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
2015 2016 version of the "Montana Prevailing Wage Rates for Building Construction Services" publication.
(f) The current nonconstruction services rates are contained in the
2015 2016 version of the "Montana Prevailing Wage Rates for Nonconstruction Services" publication.
(g) The current heavy construction services rates are contained in the
2015 2016 version of the "Montana Prevailing Wage Rates for Heavy Construction Services" publication.
(h) The current highway construction services rates are contained in the
2015 2016 version of the "Montana Prevailing Wage Rates for Highway Construction Services" publication.
(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) and (2) remain the same.
(a) Examples of building construction include, but are not limited to, alterations and additions to buildings, apartment buildings (five stories and above), arenas (closed), auditoriums, automobile parking garages, banks and financial buildings, barracks, churches, city halls, civic centers, commercial buildings, court houses, detention facilities, dormitories, farm buildings, fire stations, hospitals, hotels, industrial
buildings structures (buildings only), institutional buildings, libraries, mausoleums, motels, museums, nursing and convalescent facilities, office buildings, out-patient clinics, passenger and freight terminal buildings, police stations, post offices, power plants (buildings only), prefabricated buildings, remodeling buildings, renovating buildings, repairing buildings, restaurants, schools, service stations, shopping centers, stores, subway stations, theaters, warehouses, water and sewage treatment plants (buildings only), etc.
(b) through (4) remain the same.
(a) Heavy construction projects include, but are not limited to, antenna towers, bridges (major bridges designed for commercial navigation), breakwaters, caissons (other than building or highway), canals, channels, channel cut-offs, chemical complexes or facilities (other than buildings), cofferdams, coke ovens, dams, demolition (not incidental to construction), dikes, docks, drainage projects, dredging projects, electrification projects (outdoor), fish hatcheries, flood control projects, industrial structures (other than buildings), industrial incinerators (other than buildings), irrigation projects, jetties, kilns, land drainage (not incidental to other construction), land leveling (not incidental to other construction), land reclamation, levees, locks and waterways, oil refineries (other than buildings), pipe lines, ponds, power plants (other than buildings), pumping stations (prefabricated drop-in units–not buildings), railroad construction, reservoirs, revetments, sewage collection and disposal lines, sewers (sanitary, storm, etc.), shoreline maintenance, ski tows, storage tanks, swimming pools (outdoor), subways (other than buildings), tipples, tunnels, unsheltered piers and wharves, viaducts (other than highway), water mains, waterway construction, water supply lines (not incidental to building), water and sewage treatment plants (other than buildings) and wells.
AUTH: 18-2-431, MCA
IMP: 18-2-401, 18-2-402, 18-2-403, MCA
REASON: Reasonable necessity exists to amend this rule to provide clarification to utilizing parties as to the proper classification for particular projects, particularly when project work is closely related to multiple classifications.
4. The department proposes to repeal the following rule:
24.17.526 PROJECTS OF A MIXED NATURE
AUTH: 18-2-431, MCA
IMP: 18-2-401, 18-2-402, 18-2-403, MCA
REASONS: There is reasonable necessity to repeal this rule because it conflicts with the current 18-2-418, MCA, adopted by the Montana Legislature in 2013. That statute requires that jobs be classified based upon the preponderance of work being done. It therefore does not permit mixed nature jobs or jobs with multiple wage rate classifications.
5. Copies of the proposed 2016 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.
6. A printed version of the proposed 2016 publications is also available by contacting Mike Smith at the address, e-mail, or telephone numbers listed in paragraph 2 of this notice.
7. 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 201503, Helena, MT 59620-1503; fax (406) 444-7071; TDD (406) 444-0532; or e-mailed to firstname.lastname@example.org, and must be received no later than 5:00 p.m., November 30, 2015.
8. 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.
9. 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@example.com, or may be made by completing a request form at any rules hearing held by the agency.
10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
11. 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.
12. The department's Office of Administrative Hearings has been designated to preside over and conduct this hearing.
13. The department proposes to make the above amendments and repeal effective on January 2, 2016, in order to coincide with the start of the calendar year. The department believes there is reasonable necessity to propose the changes now so that interested parties have further opportunity to review them prior to them becoming effective. The department reserves the right to make the proposed amendments effective on a different date, or to not make the proposed changes.
/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 19, 2015.