Connecticut Seal

General Assembly

File No. 243

    February Session, 2018

Substitute House Bill No. 5320

House of Representatives, April 5, 2018

The Committee on General Law reported through REP. D'AGOSTINO of the 91st Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING OCCUPATIONAL LICENSING AND BUILDING TRADES AND CONTRACTOR DEBARMENT.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 20-330 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018):

As used in this chapter:

(1) "Contractor" means any person regularly offering to the general public services of such person or such person's employees in the field of electrical work, plumbing and piping work, solar work, heating, piping, cooling and sheet metal work, fire protection sprinkler systems work, elevator installation, repair and maintenance work, irrigation work, automotive glass work or flat glass work, as defined in this section;

(2) "Electrical work" means the installation, erection, maintenance, inspection, testing, alteration or repair of any wire, cable, conduit, busway, raceway, support, insulator, conductor, appliance, apparatus, fixture or equipment that generates, transforms, transmits or uses electrical energy for light, heat, power or other purposes, but does not include low voltage wiring, not exceeding twenty-four volts, used within a lawn sprinkler system;

(3) "Plumbing and piping work" means the installation, repair, replacement, alteration, [or] maintenance, inspection or testing of gas, water and associated fixtures, tubing and piping mains and branch lines up to and including the closest valve to a machine or equipment used in the manufacturing process, laboratory equipment, sanitary equipment, other than subsurface sewage disposal systems, fire prevention apparatus, all water systems for human usage, sewage treatment facilities and all associated fittings within a building and includes lateral storm and sanitary lines from buildings to the mains, process piping, swimming pools and pumping equipment, and includes making connections to back flow prevention devices, and includes low voltage wiring, not exceeding twenty-four volts, used within a lawn sprinkler system, but does not include (A) solar thermal work performed pursuant to a certificate held as provided in section 20-334g, except for the repair of those portions of a solar hot water heating system that include the basic domestic hot water tank and the tie-in to the potable water system, (B) the installation, repair, replacement, alteration, [or] maintenance, inspection or testing of fire prevention apparatus within a structure, except for standpipes that are not connected to sprinkler systems, (C) medical gas and vacuum systems work, and (D) millwright work. For the purposes of this subdivision, "process piping" means piping or tubing that conveys liquid or gas that is used directly in the production of a chemical or a product for human consumption;

(4) "Solar thermal work" means the installation, erection, repair, replacement, alteration, [or] maintenance, inspection or testing of active, passive and hybrid solar systems that directly convert ambient energy into heat or convey, store or distribute such ambient energy;

(5) "Heating, piping and cooling work" means (A) the installation, repair, replacement, maintenance, inspection, testing or alteration of any apparatus for piping, appliances, devices or accessories for heating systems, including sheet metal work, (B) the installation, repair, replacement, maintenance, inspection, testing or alteration of air conditioning and refrigeration systems, boilers, including apparatus and piping for the generation or conveyance of steam and associated pumping equipment and process piping and the installation of tubing and piping mains and branch lines up to and including the closest valve to a machine or equipment used in the manufacturing process and onsite testing and balancing of hydronic, steam and combustion air, but excluding millwright work, and (C) on-site operation, by manipulating, adjusting or controlling, with sufficient technical knowledge, as determined by the commissioner, (i) heating systems with a steam or water boiler maximum operating pressure of fifteen pounds per square inch gauge or greater, or (ii) air conditioning or refrigeration systems with an aggregate of more than fifty horsepower or kilowatt equivalency of fifty horsepower or of two hundred pounds of refrigerant. Heating, piping and cooling work does not include solar thermal work performed pursuant to a certificate held as provided in section 20-334g, or medical gas and vacuum systems work or the passive monitoring of heating, air conditioning or refrigeration systems. For the purposes of this subdivision, "process piping" means piping or tubing that conveys liquid or gas that is used directly in the production of a chemical or a product for human consumption;

(6) "Apprentice" means any person registered with the Labor Department for the purpose of learning a skilled trade;

(7) "Elevator installation, repair and maintenance work" means the installation, erection, maintenance, inspection, testing and repair of all types of elevators, dumb waiters, escalators, and moving walks and all mechanical equipment, fittings, associated piping and wiring from a source of supply brought to the equipment room by an unlimited electrical contractor for all types of machines used to hoist or convey persons or materials, but does not include temporary hoisting machines used for hoisting materials in connection with any construction job or project;

(8) "Elevator maintenance" means the lubrication, inspection, testing and replacement of controls, hoistway and car parts;

(9) "Fire protection sprinkler systems work" means the layout, on-site fabrication, installation, alteration, maintenance, inspection, testing or repair of any automatic or manual sprinkler system designed for the protection of the interior or exterior of a building or structure from fire, or any piping or tubing and appurtenances and equipment pertaining to such system including overhead and underground water mains, fire hydrants and hydrant mains, standpipes and hose connections to sprinkler systems, sprinkler tank heaters excluding electrical wiring, air lines and thermal systems used in connection with sprinkler and alarm systems connected thereto, foam extinguishing systems or special hazard systems including water spray, foam, carbon dioxide or dry chemical systems, halon and other liquid or gas fire suppression systems, but does not include (A) any engineering design work connected with the layout of fire protection sprinkler systems, or (B) any work performed by employees of or contractors hired by a public water system, as defined in subsection (a) of section 25-33d;

(10) "State Fire Marshal" means the State Fire Marshal appointed by the Commissioner of Administrative Services;

(11) "Journeyman sprinkler fitter" means a specialized pipe fitter craftsman, experienced and skilled in the installation, alteration, maintenance and repair of fire protection sprinkler systems;

(12) "Irrigation work" means making the connections to and the inspection and testing of back flow prevention devices, and low voltage wiring, not exceeding twenty-four volts, used within a lawn sprinkler system;

(13) "Sheet metal work" means the onsite layout, installation, erection, replacement, repair or alteration, including, but not limited to, onsite testing and balancing of related life safety components, environmental air, heating, ventilating and air conditioning systems by manipulating, adjusting or controlling such systems for optimum balance performance of any duct work system, ferrous, nonferrous or other material for ductwork systems, components, devices, air louvers or accessories, in accordance with the State Building Code;

(14) "Journeyman sheet metal worker" means an experienced craftsman skilled in the installation, erection, replacement, repair or alteration of duct work systems, both ferrous and nonferrous;

(15) "Automotive glass work" means installing, maintaining or repairing fixed glass in motor vehicles;

(16) "Flat glass work" means installing, maintaining or repairing glass in residential or commercial structures;

(17) "Medical gas and vacuum systems work" means the work and practice, materials, instrumentation and fixtures used in the construction, installation, alteration, extension, removal, repair, maintenance, inspection, testing or renovation of gas and vacuum systems and equipment used solely to transport gases for medical purposes and to remove liquids, air-gases or solids from such systems;

(18) "Solar electricity work" means the installation, erection, repair, replacement, alteration, [or] maintenance, inspection and testing of photovoltaic or wind generation equipment used to distribute or store ambient energy for heat, light, power or other purposes to a point immediately inside any structure or adjacent to an end use;

(19) "Active solar system" means a system that uses an external source of energy to power a motor-driven fan or pump to force the circulation of a fluid through solar heat collectors and which removes the sun's heat from the collectors and transports such heat to a location where it may be used or stored;

(20) "Passive solar system" means a system that is capable of collecting or storing the sun's energy as heat without the use of a motor-driven fan or pump;

(21) "Hybrid solar system" means a system that contains components of both an active solar system and a passive solar system;

(22) "Gas hearth product work" means the installation, service, inspection, testing or repair of a propane or natural gas fired fireplace, fireplace insert, stove or log set and associated venting and piping that simulates a flame of a solid fuel fire. "Gas hearth product work" does not include (A) fuel piping work, (B) the servicing of fuel piping, or (C) work associated with pressure regulating devices, except for appliances gas valves; [and]

(23) "Millwright work" means the installation, repair, replacement, maintenance or alteration of (A) power generation machinery, or (B) industrial machinery, including the related interconnection of piping and tubing used in the manufacturing process, but does not include the performance of any action for which licensure is required under this chapter;

(24) "Inspection" means the visual examination of a system or portion of a system, without disassembly of component parts of the system; and

(25) "Testing" means to determine the status of a system as intended for its use, with or without the disassembly of component parts of the system, by the use of testing and measurement instruments.

Sec. 2. Section 31-53a of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2019):

(a) The State Comptroller or the contracting authority acting pursuant to section 31-53 is hereby authorized and directed to pay to mechanics, laborers and workers from any accrued payments withheld under the terms of a contract terminated pursuant to subsection (b) of said section 31-53 any wages found to be due such mechanics, laborers and workers pursuant to said section 31-53. The Labor Commissioner is further authorized and directed to distribute a list to all departments of the state and political subdivisions of the state giving the names of (1) persons or firms whom the Labor Commissioner has found to have (A) disregarded their obligations under said section 31-53 and section 31-76c to employees and subcontractors on public works projects, or [to have] (B) been barred from federal government contracts in accordance with the provisions of the Davis-Bacon Act, 49 Stat. 1011 (1931), 40 USC 276a-2, or (2) any person or firm identified in subsection (d) of this section.

(b) (1) No contract shall be awarded by the state or any of its political subdivisions to the persons or firms appearing on the list distributed by the Labor Commissioner pursuant to subsection (a) of this section or to any firm, corporation, partnership, or association in which such persons or firms have an interest until a period of up to [three] five years, as determined by the Labor Commissioner, has elapsed from the date of publication of the list containing the names of such persons or firms.

(2) No general contractor that enters into a contract with the state or any of its agents, or with any political subdivision of the state or any of its agents, for the construction, remodeling, refinishing, refurbishing, rehabilitation, alteration or repair of any public works project subject to the provisions of section 31-53 or for any state highway project that falls under the provisions of section 31-54, shall award any work under such contract to the persons or firms appearing on the list distributed by the Labor Commissioner pursuant to subsection (a) of this section or to any firm, corporation, partnership or association in which such persons or firms have an interest until a period of up to three years, as determined by the Labor Commissioner, has elapsed from the date of publication of the list containing the names of such persons or firms.

(3) Prior to performing any work under a contract for the construction, remodeling, refinishing, refurbishing, rehabilitation, alteration or repair of any public works project subject to the provisions of section 31-53 or for any state highway project that falls under the provisions of section 31-54, each person, firm, corporation, partnership or association engaged by a general contractor to perform such work shall submit a sworn affidavit to the general contractor attesting that such person, firm, corporation, partnership or association does not hold an interest of ten per cent or greater in a firm appearing on the list distributed by the Labor Commissioner pursuant to subsection (a) of this section. The receipt and retention by a general contractor of such sworn affidavit shall fulfill the general contractor's obligation under subdivision (2) of this subsection.

(4) Any person or firm that appears on the list distributed by the Labor Commissioner pursuant to subsection (a) of this section, for a period of up to [three] five years from the date of publication of such list, shall be liable to the Labor Department for a civil penalty of one thousand dollars for each day or part of a day in which such person, [or] firm performs any work under any contract with the state or any of its agents, or with any political subdivision of the state or any of its agents, for the construction, remodeling, refinishing, refurbishing, rehabilitation, alteration or repair of any public works project subject to the provisions of section 31-53 or any state highway project that falls under the provisions of section 31-54. The Attorney General, upon complaint of the Labor Commissioner, shall institute a civil action to recover such civil penalty. Any amount recovered shall be deposited in the General Fund and credited to a separate nonlapsing appropriation to the Labor Department, for other current expenses, and may be used by the Labor Department to enforce the provisions of this part. As used in this subdivision, "person or firm" includes any firm, corporation, partnership or association in which a person or firm appearing on the list distributed by the Labor Commissioner pursuant to subsection (a) of this section holds an interest of ten per cent or greater.

(c) If the accrued payments withheld under the terms of a contract terminated pursuant to subsection (b) of section 31-53 are insufficient to reimburse all the mechanics, laborers and workers with respect to whom there has been a failure to pay the wages required pursuant to said section 31-53, such mechanics, laborers and workers shall have the right of action and of intervention against the contractor and the contractor's sureties conferred by law upon persons furnishing labor or materials, and in such proceedings it shall be no defense that such mechanics, laborers and workers accepted or agreed to accept less than the required wages or that such persons voluntarily made refunds.

(d) The Labor Commissioner shall add the following to the list distributed pursuant to subsection (a) of this section:

(1) Any person or firm that has been convicted of violating or has been found by a court or administrative agency of competent jurisdiction to have violated, pursuant to a final adjudication within the past three years, any state or federal law: (A) Regulating hours of labor, prevailing wages, minimum wages, overtime pay, equal pay, child labor, worker's compensation or unemployment compensation, (B) prohibiting discrimination in employment, or (C) governing worker classification, which results in back payments or stop work orders issued by the Labor Department, and

(2) Any person or firm that has been found by the Labor Commissioner, on the basis of substantial evidence, to have committed any of the offenses identified in subdivision (1) of this subsection within the past three years. For purposes of determining whether the Labor Commissioner has substantial evidence to find that a person or firm has committed any such offense, said commissioner shall consider any previous Labor Department debarment investigations into the person's or firm's labor practices that occurred within the previous seven years.

(e) The provisions of this section shall apply to any debarred person's or firm's successors or substantially owned or affiliated entities and shall be for a period of not less than two years or more than five years. No public contract, including a subcontract, shall be awarded to any person or firm appearing on the debarment list until the debarment period has expired.

(f) The Labor Commissioner shall notify a person or firm that has been found to have committed any of the offenses listed in subsection (a) or (d) of this section, in writing, by registered or certified mail, that the person or firm will be added to the debarment list not later than thirty days after the person's or firm's receipt of the letter. The notice shall provide the person or firm with an opportunity to object to the debarment not later than thirty days after the person or firm received such notice. Such objection shall be limited to the claim that the offense identified in the letter has not been substantiated by substantial evidence or that the finding at issue occurred more than three years prior to the date of the alleged offense. If a person or firm objects to debarment, the person or firm shall provide the Labor Commissioner with written documentation to support the objection and the Labor Commissioner shall schedule a hearing to determine whether the person or firm should be debarred.

(g) For purposes of determining whether a person or firm is the lowest responsible and qualified bidder, as defined in section 4b-92, a person or firm shall not be considered responsible if the person or firm has been found by the Labor Commissioner or a court or administrative agency of competent jurisdiction, within three years of the bid due date, to have committed any of the offenses specified in subsection (a) or (d) of this section. The provisions of this section shall not restrict an awarding authority's right to find a person or firm to be irresponsible for reasons unrelated to the offenses specified in subsection (a) or (d) of this section.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2018

20-330

Sec. 2

January 1, 2019

31-53a

GL

Joint Favorable Subst.

 

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 19 $

FY 20 $

Consumer Protection, Dept.

GF - Cost

478,161

278,161

State Comptroller - Fringe Benefits1

GF - Cost

107,123

113,189

Consumer Protection, Dept.

GF - Revenue Gain

Up to 9,300,000

Up to 9,300,000

Labor Dept.

GF - Cost

16,697

33,397

Note: GF=General Fund

Municipal Impact: None

Explanation

This bill expands the scope of certain fields that require a Department of Consumer Protection (DCP) license and expands the types of offenses that result in a person or firm being placed on the Department of Labor's debarment list and results in various costs to the state and a revenue gain to DCP.

Section 1 expands the licensing requirements for many DCP credentials, resulting in a cost to DCP and the State Comptroller and a revenue gain to the DCP. The result of the bill is that many of the 45,611 people who currently have either a licensee or are a registrant will need to obtain a license or an additional license. If everyone in the population obtained one additional license, it will generate approximately $9.3 million in revenue for DCP. Due to the magnitude of additional applications, DCP will need to hire four additional people: two license application specialists, one consumer protection inspector, and one staff attorney. This results in an annual cost of $278,161 to DCP for the four salaries and an annual cost of $101,056 to the State Comptroller for fringe benefits.

DCP will also have to create a new credential type for those whose scope of work is limited to diagnostic activity in the ten listed professions in the bill. This will require creating ten new exams and each exam is estimated to cost $20,000 which results in a total one-time cost of $200,000 to DCP in FY 19.

Section 2 of the bill establishes notice requirements for the debarment process with an opportunity for affected entities to object, with any objection requiring a full hearing and investigation by the Department of Labor (DOL). In order to fulfill the hearing and investigation requirements, DOL will require one part-time Wage Enforcement Agent ($33,397 for salary and $12,133 for fringe costs).

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

OLR Bill Analysis

sHB 5320

AN ACT CONCERNING OCCUPATIONAL LICENSING AND BUILDING TRADES AND CONTRACTOR DEBARMENT.

SUMMARY

This bill expands the types of offenses that result in a person or firm (“entities”) being placed on the Department of Labor's (DOL) debarment list, which means they cannot be awarded state or local government contracts while on the list (see BACKGROUND). The bill also (1) establishes notice and hearing requirements for entities that DOL plans to place on the list and (2) extends the debarment law's provisions to cover debarred entities' successors.

The bill makes an entity ineligible for consideration as the lowest responsible Department of Administrative Services-prequalified bidder if, within three years of a bid due date, it was found to have committed an offense for which one is placed on the debarment list. But the bill specifies that the authority awarding a contract may find entities “irresponsible” for reasons other than the debarrable offenses. Presumably, this means the bill does not otherwise alter existing standards for DAS's prequalified bidders.

The bill also expands the scope of certain fields in order to define types of work that require a Department of Consumer Protection (DCP) license.

The bill also makes conforming changes.

EFFECTIVE DATE: January 1, 2019, except the scope of work definitions are effective July 1, 2018.

DOL'S DEBARMENT LIST ( 2)

Debarrable Offenses

The bill expands the types of offenses that result in entities being placed on DOL's debarment list. Under current law, DOL places entities on the list if they violate state or federal prevailing wage laws. Under the bill, an entity must also be debarred if, in the past three years, a court or administrative agency of competent jurisdiction or the DOL commissioner on the basis of substantial evidence determined that the entity violated state or federal:

The bill requires the DOL commissioner, in determining whether there is substantial evidence of an offense, to consider DOL debarment investigations into the entity's labor practices occurring within the past seven years.

Debarment Period

The bill increases, from three to five years the maximum period during which the state and municipalities must not award a contract to a listed entity. As under existing law, the DOL commissioner sets the period. By law unchanged by the bill, DOL can set a period of up to three years during which general contractors cannot hire listed subcontractors.

Successors and Related Entities

The bill requires DOL to include on the list successors to debarred entities and entities that are substantially owned by or affiliated with debarred entities. Under the bill, successors and entities substantially owned by or affiliated with listed entities must appear on the list for at least two, but no more than five, years. (Presumably, the DOL commissioner will specify the debarment period.)

Under existing law, unchanged by the bill, if a debarred entity has at least a 10% ownership interest in another entity, that other entity is treated the same as the debarred entity. It is not clear if this provision regarding an ownership interest could be distinguished from the new provision that addresses entities substantially owned by or affiliated with debarred entities.

Notice Requirements

The bill also establishes notice requirements for the debarment process. Under the bill, the DOL commissioner must notify entities in writing, by registered or certified mail, that they will be added to the debarment list within 30 days of receiving the notice. The notice must provide entities with an opportunity to object to the debarment within 30 days. (It appears that the notice and listing timeframes are not compatible. An entity could object on day 30 and already have been placed on the list.) Under the bill, entities may object only if:

Objections must be documented in writing, following the receipt of which the DOL commissioner must schedule a debarment hearing to determine whether the entity should be debarred.

INSPECTION AND TESTING ACTIVITIES ( 1)

The bill specifies that for purposes of DCP's tradesperson licensing statutes, work in the following fields includes inspecting and testing the relevant systems:

Under the bill, “testing” means determining a system's status given its intended use, with or without dissembling its component parts, using testing and measurement instruments. “Inspection” means visually examining a system or portion of it, without disassembling its component parts. The bill's definition of (1) “testing” also applies to existing law's definition of sheet metal work and (2) “inspection” also applies to existing law's definition of elevator maintenance.

The bill also expands the scope of the:

BACKGROUND

DOL's Debarment List

By law, the labor commissioner must maintain a list of contractors and firms that have violated certain state or federal employment laws. State and municipal agencies are prohibited from awarding contracts to listed entities and the general contractors they hire are prohibited from hiring subcontractors that appear on the list.

COMMITTEE ACTION

General Law Committee

Joint Favorable Substitute

Yea

15

Nay

2

(03/20/2018)

TOP

1 The 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 36.33% of payroll in FY 19 and FY 20.