of

ASSEMBLY LABOR COMMITTEE

ASSEMBLY BILL No. 1556

(Includes custom fabrication work under the Prevailing Wage Act)

ASSEMBLY BILL No. 1926

(Concerns public works contracts and project agreements with labor organizations)

ASSEMBLY BILL No. 1929

(Concerns compensation for care and treatment of
public safety workers exposed to communicable diseases)

ALSO PRESENT:
 

  Meeting Recorded and Transcribed by
The Office of Legislative Services, Public Information Office,
Hearing Unit, State House Annex, PO 068, Trenton, New Jersey

Robert Yackel

First Vice President

Professional Firefighters Association of New Jersey 2

Richard M. Stokes, Esq.

Assistant Regional Manager, and

Legislative Counsel

Alliance of American Insurers 4

Charles Wowkanech

President

New Jersey State AFL-CIO 8

Connie F. Calisti

Director of Government Affairs

New Jersey Manufacturers Insurance Group 9

Arthur Kravitz, Esq.

New Jersey Advisory Council on

Safety and Health 9

Assemblyman Joseph R. Malone

District 30 15

Eric Richard

Legislative Coordinator

New Jersey State AFL-CIO 16

John E. Reilley

Owner

Patriot Roofing 30

Frank Wade

Chairman

New Jersey Building and Construction Trades

Labor Management Council 38

Tracey Syphax

Director

Construction Division

Metropolitan Trenton African-American

Chamber of Commerce 39

Thomas DiGangi

Director

Government Affairs

Building Contractors Association of New Jersey 44

John E. Harmon

President, and

CEO

Metropolitan Trenton African-American

Chamber of Commerce 52

Robert J. Tartaglia

State Director

National Federation of Independent Business 54

Earl Hall

Vice-Chairman

Leadership Council

National Federation of Independent Business 56

E. Martin Davidoff, C.P.A, Esq.

Member

National Federation of Independent Business 57

Helen Yeldell

Senior Legislative Analyst

New Jersey State League of Municipalities 65

Robert Sforza

Board Member

Governmental Purchasing Association

of New Jersey 74

Joseph Demark

Executive Director, and

Legislative Representative

New Jersey Building Trades Council 75

Jeffrey Stoller

Vice-President

Human Resource Issues

New Jersey Business and Industry Association 76

Philip Kirschner

Executive Vice-President

New Jersey Business and Industry Association 82

Michael Cantwell

Business Manager, and

Secretary-Treasurer

Plumbers and Pipefitters, Local 9, and

New Jersey State Pipe Trades 91

Robert Brown

Owner

American Asphalt Company 92

Richard Goldberg

President

Commerce and Industry Association of New Jersey 95

Kathleen Davis

Executive Vice-President

Chamber of Commerce

Southern New Jersey 97

Kent A.F. Weisert, Esq.

Legal Counsel

Associated Builders and Contractors

Northern New Jersey 99

Ronald L. Tobia, Esq.

General Counsel

Multiskilled Contractors Association 102

Richard Miller

Executive Director

New Jersey Associated Builders and Contractors 105

Robert Santaloci, Esq.

Pringle, Quinn, Anzano Law Firm, and

Representative

New Jersey Electrical Contractors Association 108

Steven Ripley

Executive Director

New Jersey Electrical Contractors Association 108

George Zorovich

Business Manager

Asbestos Workers, Local Union 32 112

Kevin Monaco

Director

Legislative Affairs

Utility and Transportation Contractors Association

of New Jersey 114

APPENDIX:

Testimony

submitted by

Richard Stokes, Esq. 1x

Statement

submitted by

Connie F. Calisti 3x

Testimony

submitted by

Frank Wade 4x

Testimony

submitted by

Helen Yeldell 6x

Testimony

submitted by

Joseph Demark 7x

Testimony

submitted by

Robert Santaloci, Esq. 14x

Statement

submitted by

The New Jersey School Boards Association 22x

mc: 1-120

ASSEMBLYWOMAN ARLINE M. FRISCIA (Chairwoman): Good morning, everyone.

Before we begin, I would like everyone to know that we are holding A-1556, the custom fabrication. I knew that wouldn't clear the room, but -- (laughter)

The first bill we'll hear today is A-1929.

Greg, would you please read the summary.

MR. WILLIAMS (Committee Aide): Assembly Bill 1929 provides that if a public safety worker is exposed to the blood or other bodily fluids of another individual in the course of employment or is otherwise subjected by the other individual to potential exposure to a communicable disease, all care and treatment of the worker, including testing, diagnosis, surveillance, and other services needed to ascertain whether the worker contracted any communicable disease, and all time during which the worker is unable to work while receiving the care and treatment shall be compensable under Worker's Compensation, even if, after the care or treatment, it is ascertained that the worker did not contract a communicable disease. If it is ascertained that the worker has contracted a communicable disease, there shall be a rebuttable presumption that any injury or death caused by the disease is compensable under Worker's Compensation.

ASSEMBLYWOMAN FRISCIA: Assemblyman Egan.

ASSEMBLYMAN EGAN: Thank you.

Madam Chairlady, fellow members, thank you for considering this bill today. This bill, as the Assembly reflects, deals with compensation for those who come in contact or assume to have come in contact with a communicable disease. It covers public safety workers, and the public safety worker explanation is broad. It deals with nurses, doctors and anyone who, on a regular basis, comes in contact with working men and women who might have this disease.

There were some concerns about what a communicable disease is, but I think the definition is pretty clear in the analysis. And I wish the Committee would consider this bill today.

Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you, Assemblyman.

We have some people who wish to testify today. I'd like to call on Bob Yackel from the Professional Firefighters. Is Bob here?

R O B E R T Y A C K E L: Thank you, Madam Chairman for hearing this bill this morning. This is a very important bill to firefighters and emergency response personnel. I'd like to thank Assemblyman Egan for sponsoring this legislation.

Joe, this is a very important bill to us, and we really appreciate your help.

As the first and primary responders to fires, technical rescues, and emergency medical incidents, firefighters have precious few moments to worry about anything other than rescuing and treating victims. One thing they should categorically not have to concern themselves with in the performance of their duties, should they become injured, stricken ill, or die, is whether or not they and their families will be treated fairly and in recognition of their selfless actions, on the part of the communities they serve.

Accordingly, Assembly Bill 1929 endeavors to afford public safety personnel with the refutable presumption that the injury and illness they experience resulting from occupational exposures to communicable diseases will be recognized and covered under the State's Worker's Compensation statutes.

Firefighters responding to situations, including motor vehicle accidents and crime scenes in particular, where blood soaked jagged glass and metal often surrounds them; where mucocutaneous events might take place in the performance of lifesaving procedures; treating gunshots, stabbing, and needle sticks; and where communicable diseases might be of such an infectious nature that merely being near or speaking with a patient in tight quarters might result in the responder's exposure to infection, deserve nothing less than the very best training, equipment, and coverage only this initiative can afford.

Primary and compelling reasons why firefighters and other emergency personnel require this legislation center upon the fact that symptoms of communicable disease either go undetected or are so mild in nature that they are misdiagnosed or misread or disappear completely, only to surface upon manifestation and serious, most often, irreparable injury and illness has occurred, and, in many cases, after they have unwittingly infected their loved ones.

No vaccination program, nor safety garments, can afford complete protection under any and all circumstances to which firefighters and other emergency personnel might operate under the dynamic environment that is in their profession. Therefore, such legislation, as offered for your review today, affords the very best and last safety net for firefighters and their families.

That being the peace of mind in knowing that you can operate at an emergency scene to the very best of your ability, armed with the certainty that in the event you are injured or become ill as a result of your activities, you will neither be forsaken nor forgotten.

We sincerely thank you for your deliberations and support of A-1929 affording communicable diseases presumption protection to firefighters and related emergency personnel under our State's Worker's Compensation system.

We are one of the few states -- or surrounding states already have this protection. New Jersey for some reason is way behind the times when it comes to emergency service workers and their protection. Whether it be a cancer, presumed heart and lung legislation, or just a bill such as this, we need to get our act together here in New Jersey and start protecting the people that protect us.

Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you, Mr. Yackel.

Richard Stokes, from the Alliance of American Insurers.

Good morning.

R I C H A R D M. S T O K E S, ESQ.: Thank you, Chairwoman Friscia.

Good morning members of the Committee. Again, my name is Richard Stokes, and I represent the Alliance of American Insurers. And we're a national trade association representing over 325 major property-casualty insurance companies throughout the country.

We're here in opposition to the legislation. And not so much in terms of the intent or the effort that the sponsor has -- and I think as the previous speaker indicated, this is certainly an issue that needs to be discussed. We have problems with the legislation because we think it is overly broad in many different areas.

One is the definition of communicable disease. In our reading of the legislation, this could include such things even as minor as flu and the common cold. And we would recommend the Committee take a look at the language and try and narrowly define exactly the areas that the sponsor is looking at.

We're also concerned because the legislation would apply to a very broad category of people. It could include even coworkers associated with people that may come in direct contact with people with communicable diseases. And that's another area we would recommend the Committee take a look at.

In the definition of public safety worker it is very broad as to who it might even apply to, in that sense, of a nurse and medical technician and so forth. And we think that needs to be tightened up quite a bit.

The final point that I would make is that, in terms of the exposure itself, we would recommend that the bill be modified to make it much more central to an exposure if there's an actual exposure of a communicable disease. With that we would be willing to work with the Committee, but again we think the legislation is very broad -- very broad in the sense of the definitions of both the public safety worker and also the communicable disease.

ASSEMBLYWOMAN FRISCIA: Any comments from the Committee?

ASSEMBLYMAN EGAN: Madam Chair.

Would you feel a lot better if we made it for all employees?

MR. STOKES: Well, certainly that's an option the Committee would -- you may -- if you want to take a look at it. The question is how far do you go to provide the types of benefits that you're looking for and what that cost may be on the worker's comp system itself. That I have not looked at as to what that might mean, but certainly, you know, if that is the way you want to look at it. But certainly, from our prospective, we think it needs to be much more narrowly defined.

ASSEMBLYMAN EGAN: Thank you.

ASSEMBLYWOMAN FRISCIA: Assemblyman Geist.

ASSEMBLYMAN GEIST: Thank you, Chairwoman.

Richard, have you provided to the sponsor any proposed specificity with language that the Committee could consider today?

MR. STOKES: Not today, but I would be more than happy to supply that as it goes through the system or as the bill is considered.

ASSEMBLYMAN GEIST: Well, you've raised some pretty --

MR. STOKES: This was our first chance to really take a look at it.

ASSEMBLYMAN GEIST: Respectfully, you've raised some pretty broadbrush criticisms. This Committee, last session, focused on this topic, and the bill came out of Committee under the circumstances today. If you want us to consider specificity perhaps we could consider such. Do you have any specific language at all?

MR. STOKES: No. Our home office just had -- this is the first opportunity. And as you know, I just joined the Alliance so this is our first opportunity to really look at this legislation from that perspective. And I don't have anything to offer the Committee today in terms of specific language, but I'll be more than happy to work with the Committee to supply that.

ASSEMBLYMAN GEIST: Thank you, Chairwoman.

ASSEMBLYMAN GREGG: Madam Chair.

ASSEMBLYWOMAN FRISCIA: Yes.

ASSEMBLYMAN GREGG: Just a question, to the Chair.

Do we have the Department of Insurance testifying today on this bill at all or --

ASSEMBLYWOMAN FRISCIA: No.

ASSEMBLYMAN GREGG: -- are they in the room to answer questions?

ASSEMBLYWOMAN FRISCIA: No, they're not scheduled to testify.

ASSEMBLYMAN GREGG: Is there anyone in the room from the Department of Insurance?

ASSEMBLYWOMAN FRISCIA: Not that I'm aware of.

ASSEMBLYMAN GREGG: Are there any testifiers that will be speaking for other insurance companies?

ASSEMBLYWOMAN FRISCIA: Yes.

ASSEMBLYMAN GREGG: Okay. Then at that point, I'll reserve to ask them questions.

Thank you.

C H A R L E S W O W K A N E C H (speaking from audience): Madam Chairwoman, I apologize for not filling out a slip, but I rise to support this legislation.

HEARING REPORTER: Madam Chair, he won't be on the tape. We can't hear him.

Thank you.

ASSEMBLYWOMAN FRISCIA: You have to speak into the tape, Charlie.

HEARING REPORTER: Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you.

You're on the Internet today, Charlie.

MR. WOWKANECK: Thank you.

Madam Chairwoman and members of the Committee, I rise in support of this legislation.

I think is -- Mr. Yackel, from the firefighters, has testified in a number of the states around the country. But, particularly, bordering us, New York and Pennsylvania, have passed this kind of legislation. And while I heard Assemblyman Guy Gregg ask for the insurance department, I think the most appropriate venue to ask the questions would be from the Director of Worker's Compensation, Director Calderone, who would be able to -- if that is the Committee members' concerns, would be able to give some statistics on how this impacts the fund, and it's really not a huge impact on -- I mean, the history in other states. So I -- just a word of caution. I think if there are further questions, that Director Calderone would really be helpful in this area. But we support the legislation as is.

Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you.

I also believe this is on second reading and going to Appropriations, and I would assume that Mr. Calderone would be testifying at that. At least I would hope so.

Connie Calisti, from New Jersey Manufacturers.

C O N N I E F. C A L I S T I (speaking from audience): The Alliance testified on our behalf.

ASSEMBLYWOMAN FRISCIA: Oh okay. Thank you, Connie.

And Richard Van Wagner, from the American Insurance Association. Is he here? (no response)

Is Richard here?

UNIDENTIFIED SPEAKER: He's not here.

ASSEMBLYWOMAN FRISCIA: Okay.

Art Kravitz.

A R T H U R K R A V I T Z, ESQ.: Good morning, Madam Chair.

ASSEMBLYWOMAN FRISCIA: Good morning.

MR. KRAVITZ: Arthur Kravitz. I'm here for the New Jersey Advisory Council on Safety and Health. And we are in support of this bill.

Mr. Yackel did an eloquent job in speaking for the bill. I'd like to talk about some of the technical issues that have been raised. We believe that the bill would have less of a cost impact than any -- than others might have you believe, because it simply requires an employer to provide the testing and treatment to workers exposed to bodily fluids until it can be established one way or another the course -- the cause of the disease.

This bill recognizes the risks run by medical workers from doctors to nurses, aides to EMTs, to police and fire, who become exposed to communicable diseases everyday. It is the exposure to the bodily fluids itself that limits the class of individuals who are to receive this protection. Obviously, in the normal course of a day, you or I are not going to be in the class of individuals because we're not exposed to bodily fluids or blood. So it is designed -- its broadness of scope is designed simply to accommodate everyone who is in that position.

I'd like to point out that over the last five years, we've seen a decrease in Worker's Compensation premiums of at least 20 percent. And we believe that the cost for one group of workers, to give them the protection they need to do their job and to give them the security of knowing that they're going to be taken care of in doing their job justifies this bill.

Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you very much.

Any other comments? (no response)

I'll entertain a motion to move the bill.

ASSEMBLYMAN EGAN: So moved.

ASSEMBLYMAN SARLO: Second.

ASSEMBLYWOMAN FRISCIA: Moved and seconded.

Roll call.

MR. WILLIAMS: Okay.

Assemblyman Gregg.

ASSEMBLYMAN GREGG: Yes.

MR. WILLIAMS: Assemblyman Geist.

ASSEMBLYMAN GEIST: Yes.

MR. WILLIAMS: Assemblyman Smith.

ASSEMBLYMAN SMITH: Yes.

MR. WILLIAMS: Assemblyman Egan.

ASSEMBLYMAN EGAN: Yes.

MR. WILLIAMS: Assemblyman Cohen.

ASSEMBLYMAN COHEN: Yes.

MR. WILLIAMS: Vice-Chairman Sarlo.

ASSEMBLYMAN SARLO: Yes.

MR. WILLIAMS: And Chairwoman Friscia.

ASSEMBLYWOMAN FRISCIA: Yes.

Next bill is A-1926.

Greg, would you read the summary please.

MR. WILLIAMS: Okay.

Assembly Bill 1926 permits but does not require any public entity that undertakes a public works project to enter into a project labor agreement with one or more appropriate labor organizations. The bill authorizes that public entity to include the project agreement in public works projects, on a project-by-project basis if the public entity determines that the agreement will promote labor stability and advance interests of the public entity in cost, efficiency, quality, skilled labor force, safety, and timeliness. The public entities to which this authorization is extended includes any agency, authority, or instrumentality of the State, or any of its political subdivisions.

The bill requires that to be eligible as a party to a project labor agreement, the labor organization shall represent, in collective bargaining, employees in the crafts or trades involved in the public works contract and subject to the Prevailing Wage Act, that it had entered into labor agreements with building and construction employers, and have represented employees in public works projects like those under the project agreement, and be able to refer, provide, or represent sufficient numbers of qualified employees in the crafts or trades required by the contract.

The bill makes a project labor agreement binding on all contractors and subcontractors working on the project but permits the agreement to allow the contractors and subcontractors to retain a percentage of their own current workforce and provides that contractors and subcontractors need not be parties to any project labor agreement other than for the project covered by the agreement.

Each project labor agreement entered into the bill must: one, advance the interest of the public entity with respect to cost, efficiency, quality, timeliness, skilled labor force, and safety; two, contain guarantees against strikes, lockouts, or similar actions; three, provide binding procedures that resolve the jurisdictional and labor disputes arising before the work is completed; four, be made binding on all contractors or subcontractors in the public works project through the inclusion of appropriate bid specifications and all relevant bid documents; five, requires all of the subcontractors and contractors to have registered apprenticeship programs; and six, conforms with all requirements of the law regarding set aside goals for women and minority-owned businesses.

The sponsor has proposed Committee amendments, which have been made available to the public. The amendments would modify the finding sections of the bill to emphasize the project labor agreements and are frequently, but not always, helpful in achieving the indicated benefits for public entities that underlies the need for the public entities to consider, in each case, whether the project labor agreement will help it meet its goals in that case. Two: the amendments define the labor organizations, which may participate in project labor agreements under the bill, as any labor organization which represents sufficient numbers of workers with needed skills, removing the requirements that the organization has entered previous agreements and has represented workers in similar, previous projects. Three: require that a public entity take into consideration the size, complexity, and cost of a public works project when determining whether the project labor agreement would benefit that entity. Four: directs the Commissioner of Labor to assist in facilitating the negotiation of the project labor agreement and review the finalized project labor agreement. Five: require that each project labor agreement includes a plan which is in full compliance with provisions of the law and is mutually agreed upon by the public entity and the participating labor organizations regarding the share of employment and apprenticeship positions in the public works project for minority group members and for women.

ASSEMBLYWOMAN FRISCIA: Thank you.

Assemblyman Egan.

ASSEMBLYMAN EGAN: Madam Chairlady, fellow members of the Committee, I am proud to be a cosponsor today with Assemblyman Malone of 1926, and I'm thankful to the Committee to consider this today.

I'm also proud, but not surprised, by the bipartisan support, because I firmly believe project labor agreements authorized by this bill will be a valuable and a positive tool for the State of New Jersey and for our taxpayers.

Briefly stated, project labor agreements that may be entered into, in connection with public works contracts, serve the public interest by providing an effective tool in resolving jurisdictional and other labor disputes. They help assure job efficiency, timeliness of completion, quality of work product, worker safety. And perhaps most importantly, they help ensure that public projects enjoy the most lowest reasonable cost with the highest degree of quality. I am convinced that this legislation, if enacted, will benefit all of us: contractors, working men and women, and the taxpaying public.

During testimony we will hear today, we'll likely hear from opponents of project labor agreements who might claim that these agreements will result in union only contracts virtually monopolizing public works projects, that these agreements would also drive up the cost of public works projects, and that these agreements are in violation of competitive bidding laws. I submit that all three of these are myths. They simply do not stand up to the glare of scrutiny.

In this State and other states, where project labor agreements are in place, there is no evidence whatever that nonunion contractors are excluded. Indeed, Federal and State statutes assure that all workers are eligible to work on project labor agreements, regardless of their union affiliation or lack of it. Secondly, I know of no evidence that these agreements drive up the cost of public works projects. Indeed, there is evidence that these agreements actually save taxpayer dollars by assuring positive and open communications between contractors and the workforce to head off and avoid strikes, slowdowns, and other stoppages of work.

The third myth, that project labor agreements are in violation of competitive bidding laws, simply do not stand up to the facts. The U.S. Supreme Court has upheld the use of project labor agreements, and as recently as this past November, the Bush Administration Executive Order that would ban them was permanently -- would receive a permanent injunction.

As I have stated, project labor agreements work. They are good for contractors, good for labor organizations, good for the taxpayers. The time has come in New Jersey, and I commend this bill to you for your support.

ASSEMBLYWOMAN FRISCIA: Thank you, Assemblyman.

We have several people who wish to testify today, and I'd like to start off with Eric Richard, from the AFL-CIO -- excuse me, Assemblyman Malone?

A S S E M B L Y M A N J O S E P H R. M A L O N E: (speaking from audience) Yes.

ASSEMBLYWOMAN FRISCIA: I see you at the table with us.

ASSEMBLYMAN MALONE: I just wanted to be -- I'll just be brief.

When I was given the opportunity to sign onto this piece of legislation, I had the privilege of being one of the co-prime sponsors on the School Constructions Bill last -- two years ago and had the opportunity to work with many individuals in this room both from labor, construction, and all aspects of that process.

I looked at this piece of legislation, and given the concerns that I've had on ensuring that these projects will be done in an orderly, efficient manner, I look at this piece of legislation as something that we all can live with. I think it is a piece of legislation that will promote harmony. I think it will promote effective and efficient work processes. And I think it also ensures that potential contractors, who may want to skirt some of the issues of prevailing rate, apprenticeship issues, I think their feet will be held to the fire because of this piece of legislation. And again, I wholeheartedly support this, and I'm very proud to be a co-prime sponsor with Assemblyman Egan on this.

ASSEMBLYWOMAN FRISCIA: Thank you, Assemblyman.

I know you share my concerns about all that construction money out there for the new school projects, and I would like to ensure that there are enough laws there to make sure the money is going where it belongs.

Thank you.

Eric.

E R I C R I C H A R D: Members of the Committee, good morning.

My name is Eric Richard. I'm representing the New Jersey State AFL-CIO.

Thank you, Chairwoman Friscia for posting this bill and for your cosponsorship of this important legislation.

Assemblyman Egan, thank you for your prime sponsorship and leadership on the issue of project labor agreements.

And thank you, Assemblyman Geist, for your cosponsorship of this legislation and your continued support on issues important to organized labor. We would also like to thank Assemblyman Joe Malone, the co-prime sponsor of this bill, and the leadership of the State Assembly, both Democrat and Republican alike, and, in particular, Majority Leader Roberts and Minority Leader DiGaetano, both of whom are cosponsors of project labor agreements.

The New Jersey AFL-CIO appreciates the broad support this legislation enjoys, which includes a current 32 sponsors in the Assembly.

A project labor agreement, or PLA, is a type of collective bargaining agreement that is often used on large construction projects. A PLA forms a centerpiece of labor relations by standardizing terms and conditions of employment among multiple contractors. It also provides a single dispute resolution mechanism which insulates the project from costly delays of potential strikes, slowdowns, walkouts, pickets, and other disruptions arising from workplace disputes and promotes labor harmony for the duration of the project, ensuring that the projects are completed on time and to construction specifications.

PLAs benefit all parties involved, including taxpayers, because they help to avoid cost overruns, missed deadlines, and faulty craftsmanship, while promoting efficiency, safety, and quality completion of projects.

PLAs enjoy a successful record in New Jersey. Governor Christie Whitman issued Executive Order No. 11 on March 21, 1994, indicating that the State's agencies may consider the use of PLAs for public works projects asserting the State's public policy on this issue.

The fact that PLAs are used on both private and public projects is an important point to stress because it further supports that PLAs provide a significant economic cost saving advantage. Throughout the nation, PLAs are being requested more often on private construction projects. Examples of recent PLAs used in New Jersey include: the Bogota Hotel and Casino in Atlantic City, the $650 million Goldman Sachs Office Tower in Jersey City, the $900 million Newark Airport Continental Airlines Terminal Project, the $750 million Seabrook Senior Living Complex in Tinton Falls, as well as the construction of the Hudson-Bergen Light Rail Transit System in April of 1996, and for the construction of the Essex County Correctional Facility in June of 98 by the Essex County Improvement Authority.

Over the past ten years, PLAs have become a contentious issue. Because the public debate concerning PLAs is rife with misconceptions, it's important to provide information to help separate rhetoric from reality. There are five major issues I must briefly address, the first of which is cost.

One of the most frequently raised issues involving PLAs is whether they increase cost on construction projects. Evidence illustrates that not only are PLAs cost effective, but they are increasingly requested by private contractors for economic reasons. Bill A-1926 mandates compliance with the advancement of State's interest of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability, and the State's policy to advance minority and women-owned businesses. Simply stated, if it is determined that a PLA is cost prohibited, the PLA will not apply to that project.

Further, the cost of labor, which accounts for a substantial portion of a traditional bid on a public works project, is not increased when a PLA is used. Despite this fact, on the topic of cost of labor and, in particular, the payment of the prevailing wage rate, some organizations argue that the payment of the prevailing wage would drive up the cost of projects covered by PLAs. This statement is false because the payment of the prevailing wage is already mandated by law on all government works projects and therefore, by law, should be built into the cost of the bid.

A-1926 simply seeks to ensure that contractors comply with current statutes regarding the payment of the prevailing wage. A-1926 does not increase salaries or benefits for workers in anway.

Finally, on the topic of cost, it is important to note that interest groups that state that PLAs increase cost to taxpayers have never provided evidence to prove their claims, besides naming a very small number of individual projects that went over budget, which could have occurred for many different reasons. This type of generalization should not be considered a valid argument. In fact, recent findings from a study conducted by the California Research Bureau, which is a nonpartisan research bureau similar to that of New Jersey's Office of Legislative Services, illustrates that PLAs save money not only on public sector projects, but also on private sector projects.

Because New Jersey has not yet commissioned a study on PLAs, we must rely, unfortunately, on data from other states. Specifically, this report found that private industry project managers requested that contractors use PLAs for economic reasons.

The second issue is the scope and application of PLAs under this legislation. Project labor agreements negotiated through the parameters of this bill are permissive, not mandatory, and specifically state that the application of a PLA would be determined on a project-by-project basis. This legislation is specifically written not to require PLAs on all projects, but instead to authorize public authorities to make case-by-case determination about the need for a PLA on a project and the appropriate terms of the PLA tailored specifically to that project.

Therefore, this legislation does not grant a monopoly on State contracts to union contractors. In fact, over 30 percent of projects, in which PLAs apply, are given to nonunion contractors. Rather, the PLA language grants a public entity the specific legal right to insert a PLA requirement in its bid specifications for a project when the public entity determines that a PLA will advance the interest of cost, efficiency, quality, safety, timeliness, skilled labor force, labor stability, and the State's policy to advance minority and women-owned businesses.

Some organizations have expressed that PLAs require contractors on State construction projects to use union labor. This statement also is false. Under Bill A-1926, neither nonunion contractors nor nonunion workers are excluded from bidding on working on any project. Any contractor may bid on work as long as they adhere to the conditions established on that particular project. If a contractor is in compliance with these conditions, then the State's bidding laws shall determine who receives the contract, regardless of whether the contractor is union or nonunion.

Third issue: market share, union versus nonunion. New Jersey is one of the top five most heavily unionized states in the nation, and hundreds of thousands of public trade workers support their families through this honorable profession. For this reason, it is disingenuous to assert that nonunion labor accounts for the vast majority of construction professionals in the State. In regard to market share, industry dialogue has consistently expressed in a 80/20 figure in regard to nonunion versus union workers.

As of January 2002, a national market study of all industrial segments has never been conducted to legitimize the 80/20 statement. This statement is based strictly upon a flawed premise that market share and percentage of nonunion and union construction workers are the same, without taking into consideration the status of industry workers. The 80/20 figure cited by the Bureau of Labor Statistics does not reflect an apples to apples comparison. The BLS surveys do not offer a breakdown of union and nonunion craftspeople because their data covers all industry employees, including professionals and clerical workers, not just tradesmen.

Professionals and clerical employees are highly unlikely to be union members even in contracting firms where all craft workers are members. The only way to obtain accurate union and nonunion craft percentages is to remove managers, engineers, and secretaries which account for over 25 percent of industry employment covered in the BLS data.

Therefore, in two different respects, the statement that PLAs lock out 80 percent of qualified contractors from bidding is false. It is false because this PLA legislation does not disqualify any contractor from bidding regardless of their union status. Secondly, the 80/20 figure, often stated, is inaccurate in regard to union versus nonunion market share.

Issue number four, minority-owned businesses and minority hiring: Construction projects in which PLAs apply offer several benefits to both minority-owned businesses and minority workers that do not exist on projects built without PLAs or contracts obtained through current laws. Because language in A-1926 mandates full conformity to all executive orders, a PLA entered into, under this legislation, must embrace the State's policy to advance minority and women-owned businesses. This mandate does not exist on all other construction projects. This basic yet far reaching provision is reenforced by two other specific proposals in the bill.

First, on the topic of minority-owned contracting companies, Section 5(f) of the bill specifies the application and implementation of set aside goals for women and minority-owned businesses. The obligation to comply with shall be expressly provided in the PLA. Therefore, any PLA issued must incorporate, with the provisions of Executive Order 84, issued by Governor Florio, which specifies percentages of contracts that must be granted to African-Americans, Latino, Asian-Americans, and women. These set aside goals do not exist on all other construction projects.

On the topic of the share of minority workers hired by contractors receiving bids under PLAs, amendments to the legislation supported by the State AFL-CIO specify that PLAs must include provisions that are agreed upon by the governing body and the union, regarding a proportion of minority members and women employed on that project. Therefore, under a project in which a PLA applies, the local government may agree upon the proportion of minority workers hired by the union for the construction project. This mandate also does not exist on all other construction projects.

Clearly, PLAs strongly advance the interest of minorities, whereas all other construction contracts granted without them are mute on this issue.

Finally, the topic of court hearings: It is important to clarify the impact of past court decisions on project labor agreements legislation. This bill has been written in terms that are very different from past PLA legislation and executive orders in order to assure compliance with all State bidding laws. If enacted, we believe the law will survive possible future lawsuits for several reasons: first, it is permissive; two, it's application is determined on a case-by case basis; and three, it does not require the use of a particular union, trade council, or labor organization to construct a project.

A testament to the legality and benefits of PLAs is being illustrated time after time in the courts. After years of court challenges, the evidence clearly illustrates the legal authority and validity of project labor agreements. In fact, a study reviewing all Federal and State PLA court battles on the issues, up until December of 1999, shows that prounion rulings have been received in 30 out of 36 cases. This study does not include the ruling by U.S. District Court Judge Emmet Sullivan of the D.C. Court, in November of 2001, which upheld the National Building and Construction Trades fight to overturn Executive Order 13202, the Bush Administration's illegal ban on PLAs on Federally funded projects.

Although two of the six cases that were overturned were heard in New Jersey, both of those decisions were based upon language which is not contained in this bill. Furthermore, amendments have been proposed in order to observe strict compliance with these court rulings.

The first decision, George Harms Construction Company v. The Turnpike Authority in 1994, invalidated a PLA, entered under Executive Order 99, due to the designation of a particular labor organization. In this case, the Supreme Court stated that the legality of PLAs on New Jersey public construction projects should be resolved by the Legislature. This is why the sponsors of this bill are now fighting on behalf of project labor agreements. If signed into law, it will provide valuable legislative intent.

The second ruling, which is Tormee Construction, Inc. v. Mercer County Improvement Authority in 1996, invalidated the PLA because the successful bidder was required to contract within the guidelines of an extremely limited definition of appropriate labor organization. The New Jersey State AFL-CIO support the amended version of this definition in A-1926, which is broader and more inclusive.

Finally, the National AFL-CIO has provided the New Jersey State AFL-CIO with technical language on the bill, which is aimed at avoiding suggestions that this legislation is regulatory or impermissible due to preemption principles. This language is also included in the amendments to the bill.

And again, to conclude, Madam Chairwoman, the bill you are debating today is very different from past PLA legislation. Sections of these bills have been carefully written in order to balance the concerns of many interested parties. With this in mind, it is important to reiterate a few points.

If it is determined that a PLA is cost prohibitive, the PLA will not apply to that project. The bill is permissive, not mandatory, and specifically states the application of PLAs will be determined only on a project-by-project basis. Three, the bill does not grant a monopoly on State contracts to union contractors. Four, construction projects in which PLAs apply offer benefits to both minority-owned businesses and minority workers that do not exist on projects built without PLAs. And finally, although two of the six cases that were overturned were heard in New Jersey, both of those decisions were based upon language that is not contained in the amended version of this bill.

Thank you very much. Madam Chairwoman, we hope you favorably consider this bill at this time.

ASSEMBLYWOMAN FRISCIA: Excellent analysis, Eric. Thank you, well done.

ASSEMBLYMAN SARLO: Good job, Eric.

ASSEMBLYWOMAN FRISCIA: Any comments from the Committee?

Assemblyman Geist.

ASSEMBLYMAN GEIST: Thank you, Chairwoman.

I have a question about the amendments.

MR. RICHARD: Certainly.

ASSEMBLYMAN GEIST: Have you read the amendments?

MR. RICHARD: Yes, I have.

ASSEMBLYMAN GEIST: Are you familiar with them?

MR. RICHARD: Yes, I am.

ASSEMBLYMAN GEIST: Do you support them in their entirety?

MR. RICHARD: Yes, we do.

ASSEMBLYMAN GEIST: I have a question about, "replacement Section 3 to read."

Chairwoman, I'm seeing these amendments today for the first time, and I have a question about the one particular provision.

ASSEMBLYWOMAN FRISCIA: Go right ahead.

ASSEMBLYMAN GEIST: Under that, on Page 3 of the amendments, "replace Section 3 to read;" midway down, "the Commissioner of Labor shall assist in facilitating the negotiation of the project labor agreement, and shall review the finalized project labor agreement."

Respectfully, why do you believe this provision is necessary to (a) assist in facilitating the negotiation, and (b) review the finalized project labor agreement? Why do you think both are necessary?

MR. RICHARD: Well, Assemblyman, to be perfectly frank that was requested by the Department of Labor.

ASSEMBLYMAN GEIST: Do you personally believe that they are necessary?

MR. RICHARD: Well, the way this is written, Assemblyman, is --

ASSEMBLYMAN GEIST: I am asking you on behalf of the AFL.

MR. RICHARD: We support the Department in their concerns.

ASSEMBLYMAN GEIST: Do you believe it's necessary?

MR. RICHARD: Yes, we do. We appreciate this language. We think it's been written to address both the needs of our concerns and the needs of the Department.

ASSEMBLYMAN GEIST: I have a concern. Let me see your response. I have a concern that this will delay the implementation of project labor agreements. I have a concern that this will delay and defeat some of the purposes of implementing them sooner than later. I have a concern that we're asking for one individual to participate in, hopefully, what will be many project labor agreements at every level of government. Aren't we asking a lot from our Commissioner? Isn't there possibly inherently a delay process? Isn't there also a possible cost impact, where we're going to have them, the lawyers, becoming even more involved, the AG's Office becoming more involved? Isn't this possibly an impediment to the expeditious processing?

MR. WILLIAMS: We don't think so. I think there could be some language included that could specify a time period of review. I think that might be beneficial, but I think we should leave that up to the Department of Labor to decide.

ASSEMBLYMAN GEIST: Respectfully, does the Commissioner have any voice? It says, "shall review the finalized project labor agreement." So he reads it. Is that all?

MR. RICHARD: I don't think the definition of exactly what a review is, in terms of if he needs approval or if he just needs to read it. I think it's basically once a project labor agreement is declared upon by the public body and the appropriate labor organization, then it's sent to the Department of Labor strictly for review purposes, not that they need to sign off on the agreement, but it's simply there for them to observe.

ASSEMBLYMAN GEIST: Are these provisions incorporated right now in the executive order?

MR. RICHARD: I'm not sure. I don't think so.

ASSEMBLYWOMAN FRISCIA: No.

ASSEMBLYMAN GEIST: So, we're possibly adding a step that's not required in the executive order.

MR. RICHARD: Well, it is again -- the executive order was issued by the Governor, and this is the language requested by the Department of Labor.

ASSEMBLYMAN GEIST: I'm respectful of that. Under the Governor's executive order, does the Commissioner of Labor have the same requirements and responsibilities?

MR. RICHARD: I don't want to say for certain, but I don't think so.

ASSEMBLYMAN GEIST: All right.

Respectfully, I appreciate your answers and look forward to hearing from the Department of Labor on these provisions.

Thank you, Chairwoman.

ASSEMBLYWOMAN FRISCIA: Thank you, Assemblyman.

Assemblyman Sarlo.

ASSEMBLYMAN SARLO: Thank you, Madam Chair.

I just -- to follow up on that, I believe it's just being sent down to the Commissioner of Labor more for an advisory -- you know, as a courtesy to them. They don't have to sign off on these actual agreements. If I'm the contracting agency, and the contractor has come to an agreement, it's just being sent down there to make sure a lot of these agreements are uniform and consistent with the intent of the law, but I don't believe they actually have to sign and seal. I don't think that's the intent of this legislation.

MR. RICHARD: No, it's not. It's --

ASSEMBLYMAN SARLO: It's more -- they're serving as an advisory type of capacity if needed. But the --

MR. RICHARD: Well, because the legislation does contain certain mandates, it was expressed by the Department that they would like to basically ensure that project labor agreements, agreed upon by the union or by the collective bargaining unit and the public entity, basically take in consideration all these different measures that are incorporated into the bill.

ASSEMBLYMAN GEIST: If I could just add devil's advocate. This legislation is incorporating a major league assumption that all Commissioners of Labor will be PLA friendly. By requiring their involvement in the negotiation process, respectfully, you are making an assumption that they are PLA friendly. And that is an assumption, personally, I'm not ready, willing, and able to automatically embrace.

I'm now here in my 11th year, and I have not seen too many Commissioners of Labor come before the Labor Committee and wave the PLA banner. So, under the circumstances, respectfully to my colleagues, I think we better look at these amendments with a microscope. I think there are some serious assumptions about longevity of policy that, candidly, is not well established here in Trenton.

ASSEMBLYWOMAN FRISCIA: Any other comments?

ASSEMBLYMAN EGAN: Madam Chair.

ASSEMBLYWOMAN FRISCIA: Yes, Assemblyman.

ASSEMBLYMAN EGAN: Through the Chair, to Assemblyman Geist.

I think, Mr. Richard's analogy of how that wording got in there is correct. It was requested by the Commissioner of Labor. I believe his concerns were from the legal aspect of it. I understand your point exactly, and I believe that if this moves out of this Committee, I think we have time before it hits the floor to look at that again, but that's exactly how this wording came in.

ASSEMBLYWOMAN FRISCIA: Thank you.

Thank you, Eric

MR. RICHARD: Thank you, Assemblywoman.

ASSEMBLYMAN SARLO: Thank you, Eric.

ASSEMBLYWOMAN FRISCIA: Mr. Reilley, from the Patriot Roofing.

J O H N E. R E I L L E Y: How you doing?

ASSEMBLYWOMAN FRISCIA: Good morning.

MR. REILLEY: My name is John Reilley with Patriot Roofing.

It's my first time here. I've made some notes.

ASSEMBLYMAN MALONE: Madam Chairwoman, could I just interrupt for one second.

I had the privilege of -- Mr. Reilley lives relatively close, and I had the privilege on Friday of talking to Mr. Reilley. I want to assure him that the attitude and atmosphere in these kinds of hearings are not what you might read or hear about over the newspapers. And I'm pretty sure the Committee is more than interested in hearing what you have to say, and we'll consider it with due diligence.

MR. REILLEY: Thank you.

ASSEMBLYMAN GREGG: Mr. Reilley, would you press your button. (referring to PA microphone)

ASSEMBLYWOMAN FRISCIA: Red means on.

MR. REILLEY: Red means on. Okay, I'm sorry.

We're a small company. We employ 50 to 60 men and women. We have an apprentice program. We are open shop. Ninety percent of our work is public work. This bill will pretty much put us out of business. Everything in this proposal is union. I'm not antiunion.

I'm in the roofing business. I do work side by side with other unions, and I'm -- like I said, I'm not antiunion, but everything in this language -- it says we can use a percentage of our employees. It doesn't say what percentage. It mentions minorities. Do the minorities have to sign a union contract also?

I don't believe that the unions have enough people in the State to do all of this work. I feel that a lot of the paychecks will go back to the surrounding states. I like the -- I see your point. You're trying to eliminate some bad contractors, which is good, but I just think that, you know, without public bidding and, you know, keeping it to the lowest qualified bidder is the point here. And this language, please, look at it. Everything in here is public (sic) labor agreements. It's all union.

That's all I have.

ASSEMBLYWOMAN FRISCIA: Any comments?

ASSEMBLYMAN GREGG: Madam Chair.

ASSEMBLYMAN SARLO: Mr. Reilley.

ASSEMBLYWOMAN FRISCIA: I'm sorry.

Assemblyman.

ASSEMBLYMAN SARLO: Go ahead. I was just going to try--

ASSEMBLYWOMAN FRISCIA: Assemblyman Gregg.

ASSEMBLYMAN SARLO: -- help him answer some of these questions, but go ahead, Assemblyman.

ASSEMBLYMAN GREGG: Go ahead first. That's fine.

ASSEMBLYMAN SARLO: This doesn't -- and just so you have a better understanding. It doesn't preclude anybody from bidding on public works projects. I mean --

MR. REILLEY: Yes, it does.

ASSEMBLYMAN SARLO: Your company still can go ahead and--

MR. REILLEY: No, it clearly says the contract, plus all subcontractors, must sign a PLA. That's what it says.

ASSEMBLYMAN SARLO: That PLA has to be included in the bid specifications and depending on the type of project and the size of the project and the magnitude of that project --

MR. REILLEY: Well, I understand now that it's, what, over $38 million?

ASSEMBLYMAN SARLO: Excuse me?

MR. REILLEY: The agreement now is, what, over $38 million?

ASSEMBLYMAN SARLO: The original bid threshold in this particular piece of legislation --

MR. REILLEY: Well, that's my point. There is no threshold.

ASSEMBLYMAN SARLO: -- there's no bid threshold.

MR. REILLEY: Right.

ASSEMBLYMAN SARLO: What kind of size -- I mean, if I may --

MR. REILLEY: Well, last year we did a little over $7 million in business.

ASSEMBLYMAN SARLO: In business.

MR. REILLEY: And we were --

ASSEMBLYMAN SARLO: Specific projects. How much per specific --

MR. REILLEY: School -- Ninety percent public work. You know, school work --

ASSEMBLYMAN SARLO: No, I mean the magnitude on one contract.

MR. REILLEY: Oh, my biggest job?

ASSEMBLYMAN SARLO: Yes.

MR. REILLEY: One point five million.

ASSEMBLYMAN SARLO: Again, each -- each set of contract documents that come out may include a PLA. If there's -- if it's -- if the contracting agency, whether it's a municipality, county, or State, feels it's necessary and they're able to come up with some good strong language that supports it -- they need supporting documentation -- that doesn't -- still doesn't prevent you because you still have an opportunity to retain a portion of your employees, plus I had --

MR. REILLEY: What percentage?

ASSEMBLYMAN SARLO: That's all a part of the negotiation process. It's part of the agreement that's specific -- project-by-project specific, which leaves it negotiable with you as the contractor and the contracting agency. So I don't want you to think that you're going to have to go out of business. By no means will you go out of business --

MR. REILLEY: The way I see it --

ASSEMBLYMAN SARLO: -- as this legislation is put into law.

MR. REILLEY: Okay. Thank you.

Is that it?

ASSEMBLYMAN GREGG: Madam Chair.

ASSEMBLYWOMAN FRISCIA: Assemblyman Gregg, did you want to speak?

ASSEMBLYMAN GREGG: Yes, Madam Chair.

Mr. Richard (sic), I think your testimony is going to be the crux of the testimony that represents the opposition to this bill. So I want to give you a little more time, perhaps, to -- and I can sense your frustration up there. I have --

MR. REILLEY: Well, I'm a little nervous, but --

ASSEMBLYMAN GREGG: I have been there, done that 20 years ago, prior to coming here. Perhaps, in a few years you might want to join me. (laughter from audience)

MR. REILLEY: I'm thinking about it.

ASSEMBLYMAN GREGG: But let's -- let's walk through a little more specifically --

MR. REILLEY: Okay.

ASSEMBLYMAN GREGG: -- with some of your concerns because I think they're valid concerns. What you're telling me is you have a company that employs about 60 people.

MR. REILLEY: Yes, sir.

ASSEMBLYMAN GREGG: And they are predominately roofers.

MR. REILLEY: Yes.

ASSEMBLYMAN GREGG: Not management people. Mostly your employees are workers.

MR. REILLEY: Yes.

ASSEMBLYMAN GREGG: And they get paid on the premise of how much work you do?

MR. REILLEY: Well, the prevailing wage.

ASSEMBLYMAN GREGG: And they get paid, by law, the prevailing wage, when they're on public projects, which is the majority of your business?

MR. REILLEY: Yes.

ASSEMBLYMAN GREGG: So, if you were to do $20 million a year, $18 million of it probably would be the public sector.

MR. REILLEY: That's correct.

ASSEMBLYMAN GREGG: Now, let's walk through a potential PLA, because I think that your concerns are valid that there's nothing in the bill that says how many employees might you be able to use that are yours. Let's say a PLA said that you could use 50 percent because -- when we're in the world of nonreality, 50 percent sounds fair until you attach it to real faces and real workers that have kids and families and mortgages. So if you go into that project labor agreement and they say only 50 percent of your employees can work, what's your response going to be, Mr. Richard, through the Chair?

MR. REILLEY: I'm not sure if I want to get 50 percent of the qualified, willing employees. You know, the unions can't stand nonunion contractors and their men. You know, we're classified as scabs. I don't think it would work.

ASSEMBLYMAN GREGG: And how would you do your bid, through the Chair, if you don't -- if you're not sure who's going to be working for you? Would that be difficult too as well?

MR. REILLEY: It would escalate the price as will this proposal. Basically, it limits the companies to union companies. I don't know how well your -- if you were to work for me, I don't know how you're going to work for me, you know, as an employee.

ASSEMBLYMAN GREGG: How long have you been in business, Mr. Richard?

MR. REILLEY: Twenty-five years. I was an union contractor for probably 15 years.

ASSEMBLYMAN GREGG: And I know this is speculation, but this is your business, through the Chair, so I assume you know your competitors as well.

MR. REILLEY: Yes, sir.

ASSEMBLYMAN GREGG: Many of the folks that are doing this kind of business. In your field, how many are there? What --

MR. REILLEY: I could safely say that the roofing projects in New Jersey are probably 75 percent done by open shop roofing companies.

ASSEMBLYMAN GREGG: And your testimony to this Committee today is that if this bill were to pass -- and we can't go into the future -- but if these project labor agreements that are, at this point, fictitious but could be real, that if those project labor agreements that these public entities came up with were not very, very, very pro small business, that you probably would not be able to compete?

MR. REILLEY: I know I won't be able to. I know for a fact.

ASSEMBLYMAN GREGG: Thank you, Mr. Richard. And thank you, Madam Chair.

ASSEMBLYWOMAN FRISCIA: Any other comments?

Assemblyman Egan.

ASSEMBLYMAN EGAN: Yes, Mr. Richard. (sic)

UNIDENTIFIED SPEAKER: Mr. Reilley.

ASSEMBLYMAN EGAN: I'm sorry, Reilley.

ASSEMBLYMAN GREGG: I'm sorry. I did it to you. It's my fault.

ASSEMBLYMAN EGAN: Did you say Richard before? I thought I --

ASSEMBLYMAN GREGG: Yes, I started the rumor.

ASSEMBLYMAN EGAN: Mr. Reilley, I'm sorry.

MR. REILLEY: Yes.

ASSEMBLYMAN EGAN: When you undertake projects that require more than your existing workforce, where do you get the people from?

MR. REILLEY: I don't take work more than what I can handle.

ASSEMBLYMAN EGAN: Okay.

And the prevailing wage is the union wage in New Jersey?

MR. REILLEY: Well, if I asked the Department of Labor that they probably wouldn't say that, but it's pretty equal.

ASSEMBLYMAN EGAN: It's pretty equal. So your employees get the equivalent wage of the union roofers' wage?

MR. REILLEY: It depends on what county that the -- pretty much. It's pretty close.

ASSEMBLYMAN EGAN: Okay.

And you submit certified payrolls to -- for them?

MR. REILLEY: Yes.

ASSEMBLYMAN EGAN: Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you, Mr. Reilley.

MR. REILLEY: Thank you.

ASSEMBLYWOMAN FRISCIA: Frank Wade, from the Building Trades.

F R A N K W A D E: Madam Chairman.

ASSEMBLYWOMAN FRISCIA: Good morning, Frank.

MR. WADE: Good morning to you and the members of the Labor Committee. Thank you very much for --

ASSEMBLYMAN SARLO: Hit the red button.

MR. WADE: It's on.

ASSEMBLYMAN SARLO: It's on.

ASSEMBLYMAN GREGG: He's just not close enough to it.

MR. WADE: -- allowing me the opportunity to come here before you today.

I really -- there is not much you can say after the testimony that was complete and comprehensive from Eric Richard, representing the AFL-CIO, but myself, as the Chairman of the New Jersey Building Trades Labor Management Council, are here to support A-1926 in its entirety. And I think if I could speak more on it -- due to the fact of the time and those people that are going to testify, I think it was justifiably said in his testimony. And again, not to be repetitive, but we do support that. And I'd also want to thank Assemblymen Egan and Malone for their support and sponsorship.

Thank you very much.

ASSEMBLYWOMAN FRISCIA: Thank you.

Tracey --

T R A C E Y S Y P H A X: Syphax. (indicates pronunciation)

ASSEMBLYWOMAN FRISCIA: Syphax.

MR. SYPHAX: I usually get stuck on last names, so I'll help you out.

ASSEMBLYWOMAN FRISCIA: Thank you, Tracey.

And what is MTAACC?

MR. SYPHAX: MTAACC is the Metropolitan Trenton African- American Chamber of Commence in which I am Director of the Construction Division.

ASSEMBLYWOMAN FRISCIA: Thank you.

MR. SYPHAX: Thank you.

Good afternoon, Madam Chairwoman, Assemblymen.

I'm in front of you today to speak on my opposition to Governor McGreevey's Executive Order No. 1, PLA agreement. First, as a minority contractor that has spent plenty of time and money getting my firm in position to compete on school construction, and second, as a person of color who was at one time a union roofer.

Looking at this order from both perspectives, I can clearly see that this order will do nothing for minority contractors in the State or benefit minorities in the Abbott districts in which the majority of this money is going to be spent.

It is my understanding that the unions now are about 4 percent minority in a State where the minority make up almost 24 percent of the State population. These numbers clearly show who will benefit from this agreement. I remember clearly, many days spent sitting in the union hall as a journeyman roofer and watched many people go out on jobs ahead of me who were less qualified but was the nephew or the uncle of someone in charge. Many days spent in that hall is probably the main reason why I'm in business today.

Today -- me -- myself -- what brings me to -- recently -- what brings me here today, recently, was a situation where I had the opportunity to work along with a union contractor on a job that is local, as a matter of fact, right here in Trenton. I'm not going to go into details, but I can suggest, as a nonunion contractor, my experience with sitting down with this union was not a friendly experience, and it was not harmony.

As a union contractor sitting down with a nonunion contractor, just as Mr. Reilley stated, we are considered as scabs. And considering working alongside a union contractor would open up nothing but a can of worms for me. As a nonunion worker, to say that you will have a company that will allow you to use 50 percent of your workforce, we have to ask the question, what do I do with the other 50 percent of my employees that can't work on that project?

As I stated, without going into details, I am totally against this PLA agreement. And I know for sure, in speaking the same as Mr. Reilley said, that any agreement like this that is put forward will actually put me and the 15 employees that I employ, as a minority contractor, which is nonunion, will keep us from competing on any school construction that are in the Abbott districts in which I live and pay taxes.

Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you.

Any comments? Assemblyman Gregg.

ASSEMBLYMAN GREGG: Mr. Syphax, thanks for being here today.

You have 15 employees, and you started as a union worker.

MR. SYPHAX: I started out as a union, yes, a union roofer back in the 80s. I was a union roofer for nine years.

ASSEMBLYMAN GREGG: For nine years. Then you started your own business?

MR. SYPHAX: Yes, I did.

ASSEMBLYMAN GREGG: And you have 15 employees now.

MR. SYPHAX: We have 15 employees now, yes.

ASSEMBLYMAN GREGG: And perhaps you can share with the Committee how you perceive this bill will affect you as it deals with school construction from the standpoint of the actual walking through the process that ultimately will be a PLA. You and your 15 employees will look at that project labor agreement, and in the event, again, as you just stipulated, that perhaps there's a requirement for 50 percent union workers, what will you do with the other seven?

MR. SYPHAX: That same question -- and put it into real life terms as I stated -- there was an agreement whereas that I was supposed to work with a union contractor on a project that is local, and that question was brought up. And this bill says that it is negotiated, but I can tell you from sitting down with the union recently, it wasn't negotiable. It was, "You can't have none of your employees, which are nonunion, working on this project." You have to hire all union contractors -- all union workers to work on this project. And this is real life. I'm talking about something that, you know, just happened recently. So, you know, in my perspective it just doesn't work.

ASSEMBLYMAN GREGG: And through the Chair, what did you do when they required you to have all union?

MR. SYPHAX: I just refused to work on the project. It was basically telling me that I would have to shut my shop down, which I spent, you know, seven years building to where it is now, and hire union workers to work on that project, which was a good project for me. It's a high profile project. It would have been good for my company, but what am I going to do with my 15 employees that can't work on that project?

ASSEMBLYMAN GREGG: One last question, through the Chair. You were a union worker for nine years, and you've had your own business for the last seven years. How do you judge the qualifications of your employees versus the union workers you work with?

MR. SYPHAX: Well, my employees are some of the best employees that are in the State. And I can testify -- and it's ironic that I'm testifying right after Mr. Reilley, who I've worked for for six years, who is open shop, and I know he hires great employees, good employees. I'm a product of him, which is a nonunion shop. So I know what kind of employees that come out of nonunion shops. They are some of the best employees.

ASSEMBLYMAN GREGG: And would it be true to say that many of those people in nonunion shops are former union workers in many cases?

MR. SYPHAX: In some cases, yes. In some cases, yes.

ASSEMBLYMAN GREGG: And so your testimony, in front of the Committee, would be -- it really is the people that they're working for that creates the standard, as opposed to whether they're union or not?

MR. SYPHAX: Oh, yes. Most definitely. Just recently we just, as I stated before, I'm Director of the Construction Division for MTAACC, which involves about 26 minority-owned companies. One of our recent members who just joined has been a member of the union for 11 years, and he basically told me the same reason why he's in business now. He's not getting any work from the union.

ASSEMBLYMAN GREGG: Last question, through the Chair. Would it be your opinion or testimony, in front of this Committee, that project labor agreements, in general, will not be a positive situation for minority-owned businesses?

MR. SYPHAX: Most definitely.

ASSEMBLYMAN GREGG: Thank you.

ASSEMBLYWOMAN FRISCIA: Assemblyman Egan.

ASSEMBLYMAN EGAN: Through the Chair. Sir, you made a statement that 4 percent of the workers in the union are minorities. What did you base that on?

MR. SYPHAX: I based it on some information that I read. I don't know what the exact numbers are, but I based it on some information that I read on the unions: what the makeup of the unions are today compared with what the makeup of the State is.

ASSEMBLYMAN EGAN: Thank you.

ASSEMBLYWOMAN FRISCIA: Anyone else? (no response)

Thank you, Mr. Syphax.

MR. SYPHAX: Thank you.

ASSEMBLYWOMAN FRISCIA: Tom DiGangi, from the Building Contractors Association.

T H O M A S D I G A N G I: Thank you, Chairwoman Friscia and members of the Committee, for the opportunity to address you this morning. Again, my name is Tom DiGangi. I'm the Director of Government Affairs of the Building Contractors Association of New Jersey.

As you know, the BCANJ is the single largest organization of union general contractors and construction managers in New Jersey. Members are responsible for billions of dollars in commercial, industrial, and institutional construction projects annually and employ tens of thousands of skilled craft workers statewide. The Association is committed to raising the standards of construction in New Jersey through quality, integrity, skill, and responsibility. And there is no better way to ensure that these important characteristics -- quality, integrity, skill, and responsibility -- become part of a lexicon of public construction than through the institution of project labor agreements.

PLAs help to finish important construction projects on time, within budget, and a superior level of quality. New Jersey citizens demand nothing less. PLAs guarantee labor availability and stability, traditionally one of the most volatile elements of any construction project. They provide that proper wages are paid to our State's workers, and in turn, those workers pay taxes.

The argument I most often hear is this bill is a sweetheart deal for unions. This bill is a sweetheart bill for taxpayers. Project labor agreements are designed to create the most advantageous environment for the public entities building projects and the taxpayers who finance them. This is not a sweetheart deal for contractors or labor or anybody else. Contractors and labor both will be asked to sacrifice a little on each project in the interest of accommodating the public need for timeliness and cost savings.

Contractors and labor are willing to make sacrifices to have benefits: the guaranteed employment, safe work sites, good partners. This makes it worthwhile for employers and employees. It's the old adage: the bird in the hand is better than two in the bush.

I also hear that this bill is only about hiring union labor. I believe that to be false. Page 3, Section 4, I'm just going to quote this very quickly: "Any negotiated project agreement may include provisions that permit contractors and subcontractors working on the public works project to retain a percentage of their current workforce and provisions, that the successful bidder need not be a party to a labor agreement with the labor organizations other than for the public works project covered by the project agreement." It's clear that nonunion workers and nonunion contractors are in no way barred from participating in PLAs.

Another argument suggests that this bill ends the competitive bidding process. Again, that's false. As referred to in the previous quote, work performed under a project labor agreement is bid like any other public project. Only the conditions of the workforce are set prior to the bid. In fact, when labor commissions are fixed, there are less variables for bidding contractors to address, yielding a more precise bid.

Opponents say that PLAs raise the cost of construction. This too is false. As you know, New Jersey has a prevailing wage. Every public project calls for workers to be paid this prevailing rate. If contractors are not breaking the law by cheating on prevailing wage in non-PLA instances, how can the institution of PLAs cause labor costs to skyrocket?

And finally, opponents argue that the courts have ruled that PLAs are illegal. One last time, false. The courts nationwide have ruled in favor of project labor agreements by a staggering five to one margin. When those PLAs that have been struck have only fallen on technical grounds, this legislation steers clear of technical pitfalls and meets the legal standards set by the courts. A-1926 is good public policy. I urge the Committee to release it with a favorable recommendation.

Thanks for your consideration.

ASSEMBLYMAN SARLO: Thank you, Tom.

ASSEMBLYWOMAN FRISCIA: Thank you, Tom.

Any comments? Assemblyman Geist.

ASSEMBLYMAN GEIST: Thank you, Chairwoman.

Question --

MR. DIGANGI: Yes.

ASSEMBLYMAN GEIST: Have you read the amendments?

MR. DIGANGI: I have.

ASSEMBLYMAN GEIST: Satisfied with the amendments?

MR. DIGANGI: I am.

ASSEMBLYMAN GEIST: Do you, in your capacity, representing the contractors, believe that there is a need for the provision for "the Commissioner of Labor shall assist in facilitating negotiation of project labor agreement and shall review the finalized project labor agreement?" Give us your opinion on that issue.

MR. DIGANGI: Yes, I have indeed read that. In fact, we support that amendment. We think that there's some positives by going to the Commissioner for review. In fact, one of the big issues that we hear, and we're going to continue to hear today, is all of these legal concerns, court challenges, and whatnot. A great way to make sure that we're doing it the right way is that the DOL and the Commissioner has an opportunity to take a look at these and make sure that anything that happens in an agreement -- if there's something that's outside of the law there's an opportunity to take a look at it quickly, address it so that it doesn't get bogged down in court challenges, and we move faster through the process because that's what it's about in timeliness and cost savings is the thing.

ASSEMBLYMAN GEIST: Thank you.

MR. DIGANGI: Sure thing.

ASSEMBLYWOMAN FRISCIA: Assemblyman Gregg.

ASSEMBLYMAN GREGG: Mr. DiGangi, you testified that PLAs will provide that proper wages are paid in the State of New Jersey. Is there a law in the State of New Jersey for prevailing wage now?

MR. DIGANGI: Actually, my comment was mostly that PLAs will not affect costs because the prevailing wage is going to apply to every single one of those projects as is.

ASSEMBLYMAN GREGG: I think it -- your comment was that they provide that proper wages are paid to our State workers. And you were saying that this law would ensure prevailing wages being paid. Is that what you meant?

MR. DIGANGI: Okay, yes. I'm sorry, I can't remember exactly --

ASSEMBLYMAN GREGG: So this law, then in that case, would be redundant?

MR. DIGANGI: I certainly don't view it as that.

ASSEMBLYMAN GREGG: We already have a law. Is that correct? Do we have a law?

MR. DIGANGI: I agree, yes. Prevailing wage is a law that addresses that issue.

ASSEMBLYMAN GREGG: Thanks. That's all I wanted. Okay.

You also say that it's a sweetheart deal for taxpayers. I just have a question on, and I think this will be the underlined question of the day. How do we know if we got a deal if everyone didn't bid?

MR. DIGANGI: I don't see how this excludes anyone from bidding.

ASSEMBLYMAN GREGG: It doesn't exclude, but we're going to hear testimony, and I've already heard testimony, that companies will choose not to bid if the PLA is not suitable for their company. And that may go to the other statement you made that you don't think this bill is about hiring union labor. And you said that was false because there is a statement that says the agreement may include provisions that permit contractors and subcontractors working on public projects to retain a percentage of their current workforce. May.

Now I know you testified in front of committees a lot here. I think you know the difference between the word "may" and "shall."

MR. DIGANGI: Indeed.

ASSEMBLYMAN GREGG: Does our prevailing wage law say that businesses may pay the prevailing wage?

MR. DIGANGI: No, no. Businesses shall pay the prevailing wage.

ASSEMBLYMAN GREGG: But if it said "may," would it then mean that they will?

MR. DIGANGI: I'm sorry, I'm not following where you're going with this, Assemblyman. I hope --

ASSEMBLYMAN GREGG: I think your argument, or your statement to the Committee, was that the bill, by being permissive with "may," would ensure that nonunion workers would be allowed to work. "May" does not do that. The word "shall" does. Would you then be testifying that perhaps the bill should say, "PLAs shall include provisions that permit contractors to be nonunion?"

MR. DIGANGI: I think that the bill is fine as is. And I believe that there is no exclusion for anyone to bid on this -- to bid on a PLA.

ASSEMBLYMAN GREGG: Do you believe that this bill will ensure that businesses that wish to bid will be allowed to and use all of their employees always? Do you believe that's what this bill will do?

MR. DIGANGI: This bill talks about a percentage. I do not know what that percentage would be.

ASSEMBLYMAN GREGG: So you understand that this bill will not protect all the employees and all the businesses. So, many businesses may choose not to bid. If they do not choose to bid, the public may never have the knowledge of what the lowest price would be.

MR. DIGANGI: Sir, I believe that's a self-imposed exclusion. If you decide not to bid at the beginning for any number of reasons, you decide not to bid. Many of our contractors decide not to bid on projects regularly for whatever those reasons might be. We encourage all of our contractors to bid on every project that they can. You just never know what's going to happen. I believe it's a self-imposed exclusion.

ASSEMBLYMAN GREGG: Through the Chair, shouldn't the State want to have as many people bid?

MR. DIGANGI: Sure.

ASSEMBLYMAN GREGG: So this bill could, by its -- by becoming law, could actually -- would you submit that it could actually limit the number of bids?

ASSEMBLYWOMAN FRISCIA: Assemblyman --

MR. DIGANGI: I certainly don't support --

ASSEMBLYWOMAN FRISCIA: -- I believe that he answered that it was self-imposed exclusion.

ASSEMBLYMAN GREGG: Thank you, Madam Chair.

Last comment. You mentioned the courts and that we'll be discussing the courts today. I think we will be discussing the courts and right- fully so. Are you familiar with Executive Order 99?

MR. DIGANGI: I do not know that executive order by number.

ASSEMBLYMAN GREGG: Executive Order 99 was Governor Florio's executive order. That executive order was ultimately overturned by the courts. Do you think that Governor Florio willfully wished to break the law when he executed Executive Order 99?

MR. DIGANGI: Sir, you're asking me about something that is not essentially a portion of this bill. I just don't know it. I have to go back -- I have to go back and read it.

ASSEMBLYMAN GREGG: My point in bringing it up is your comment is about whether or not it will have court challenges in the future. I don't think at anytime we'll know what court challenges we'll have. And I'm just walking through individual testimony today trying to respond to it as best as I can. I don't think Governor Florio put that order in knowing it was illegal. I think he had his best intentions there, and I think that this bill also may be walking some of those lines, and that's why I asked you that question.

I thank you for indulging me, Madam Chair.

And, thank you.

MR. DIGANGI: Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you, Tom. Good job.

MR. DIGANGI: Thank you.

ASSEMBLYWOMAN FRISCIA: John Harmon, Metropolitan Trenton African-American Chamber of Commerce.

J O H N E. H A R M O N: Good morning.

ASSEMBLYWOMAN FRISCIA: Good morning.

MR. HARMON: Good morning, Madam Chair, members of the Assembly. My name is John Harmon. I'm President and CEO of the Metropolitan Trenton African American Chamber of Commerce.

I am an American. And this is why I am strongly opposed to project labor agreements. Project labor agreements clearly provide an unfair advantage in the marketplace. In this country we believe in the free enterprise system that allows entities to compete based on defined specifications. Our judicial system has been clear in regards to this decision with respect to capitalism, what capitalism is, and what capitalism is not. And PLAs have been struck down in New Jersey courts before.

Furthermore, it is unconscionable that our government officials would even consider the implementation of PLAs given the history of PLAs' issues with PLAs in other states. We can ill afford to disregard prudent economic principles such as supply and demand, economies of scale, while utilizing taxpayers' hard earned dollars.

Over the last year, MTAACC has been working with the State of New Jersey's Economic Development Authority and the Trenton School Board to assist in the identification and recruitment of qualified women and minority-owned firms to participate in the $8.6 billion School Construction Program occurring in 30 Abbott districts throughout the State.

The EDA sought our help because, historically, women and minorities were not participating significantly on public projects. And it would be a travesty if these projects were to occur without local minority and women participation. The response from minority firms was that, even with their best efforts, they were not getting the jobs; therefore, why participate?

Subsequently, through intense pleading on our part with these firms, some have come forward, completing the necessary documentation, obtaining the required certification, and have yet to be called to participate in the School Construction Program.

To mandate the use of PLAs on public projects will provide an official license to further exclude full participation of qualified men and women. In closing, the rationale for use of PLAs just do not cut it. They do not ensure efficiency nor are they cost effective. The role of government is to serve the people. One way that government achieves this is by taking actions and implementing laws that afford every responsible citizen an equal opportunity at a level playing field. Project labor agreements do not achieve either. And given the tightness in the economy, recent layoffs, and ongoing efforts in this country to unify we as a people, this bill, in my opinion, and based on my experience with business owners not only in the metro Trenton area, but throughout the State, this bill only divides.

Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you for your comments, sir.

Any comments, questions?

ASSEMBLYMAN GREGG: Just one, real fast.

ASSEMBLYWOMAN FRISCIA: Yes.

ASSEMBLYMAN GREGG: Mr. Harmon, just one question. You were here and listened to the testimony of Mr. Syphax. Would you be in agreement with his comments that this bill is not a good bill for minority and women business owners?

MR. HARMON: One hundred percent.

ASSEMBLYMAN GREGG: Thank you.

ASSEMBLYWOMAN FRISCIA: Thank you.

Martin Davidoff.

R O B E R T J. T A R T A G L I A (speaking from audience): Excuse me, Madam Chairwoman. Marty Davidoff, Earl Hall, and myself are all members of NFIB, and we would like to testify together if that is okay to save time.

ASSEMBLYWOMAN FRISCIA: Fine. Sure.

ASSEMBLYMAN SARLO: Madam Chair.

ASSEMBLYWOMAN FRISCIA: Yes.