GOP attempt to ban local use of 'discriminatory' project labor agreements likely fails, again

For years, some Republican lawmakers have tried to prohibit Indiana's local governments from choosing to require project labor agreements (PLAs) on public construction projects.

They and the representatives of some non-union building trades groups say the practice often “discriminates” by effectively, albeit not specifically, limiting bids to contractors with union workers.

Previous years’ attempts failed and it appears this year's bill is likely to fail as well.

House Bill 1024 contains the sixth attempt since 2019 to take away the power counties, cities and other local units have to limit bids to employers who have a PLA. These agreements typically set workers' pay and other aspects of their working conditions during the project.

Opponents of the proposed ban, including labor advocates and some local leaders, argue taking away the power to require PLAs would infringe on local control and take away a key, optional tool localities use to ensure tax-funded projects are completed effectively.

HB 1024 passed the House earlier this session along party lines, but a 5-5 tie on a vote to advance the bill from the Senate Pensions and Labor Committee last week held it up there.

“Obviously, I'm very disappointed because it's just protection for taxpayers and provides opportunities for a lot of construction workers that get shut out on these PLA projects in certain cities in the state,” said Rep. Jerry Torr, the bill’s author. “Of course, there were several people that were out at the time of the vote.”

Only one member of the committee was missing: Sen. Micheal Young (R-Indianapolis).

Sen. Linda Rogers (R-Granger), the committee’s chair and a co-sponsor of HB 1024, planned to try to bring the bill up for a vote again Wednesday. Instead, the committee hearing was canceled that morning. It’s not clear why and Rogers has not responded to a request for an interview.

This was the bill’s last chance to make it to the Senate floor in its current state. Thursday is the last day for bills to be passed by their opposite chamber committees and continue the process. But there are other ways language from HB 1024 could still make it to the governor’s desk, like being amended into a different bill that is already further in the process. Torr said he’s “still looking into that.”

Two Republicans joined three Democrats in voting down the bill last week.

Sen. Dan Dernulc (R-Highland) said he was voting against it because he didn’t want to take away local control. Sen. Greg Walker (R-Columbus) was the other GOP “no” vote.

A few other Republican committee members gave tepid “yes” votes, and said they had concerns about the bill but wanted to advance it to see if those concerns could be addressed later in the process.

Torr said the split views of Republicans on the committee do not represent a larger split on the issue within the GOP caucus.

“There are some people here that unfortunately sometimes let their future political advancement dictate their votes or at least weigh a little too heavily on their votes,” he said. “I've found that good policy is always good politics.”

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Matt Bell is a lobbyist who testified in favor of HB 1024 on behalf of Associated Builders and Contractors, Inc., an association of non-union building contractors.

He argues while PLAs don’t strictly require a contractor to have union workers, they often indirectly prohibit non-union shops from participating through requirements on certain levels of wages, benefits and more.

“When you have contractors who do not have a labor affiliation, they have to make a determination: Am I willing to abide by these rules for one project, skewing my payroll, paying into my competitors pension fund that I would not otherwise pay into? Or not participate?” Bell said. “And nationally, merit-shop contractors 97 percent say no, that's not something we would participate in.”

Supporters of the ban, like Bell, argue this isn’t strictly a local control issue. He pointed to evidence from mostly non-academic research in other states that suggest PLAs can hurt taxpayers by driving up project costs. As units of the state, Bell argued, it’s within the legislature’s rights to limit their ability to cause such harm.

Supporters argue there is more peer-reviewed evidence that PLAs often have limited impact on costs. Sen. Andrea Hunley (D-Indianapolis) pointed in response to the fact that many private companies use these labor agreements in their projects.

“They're using project labor agreements because they believe that that's going to create the best [return on investment] for their … shareholders,” Hunley said. “And so I don't see how we can say on one hand it's good for business, but it's not good for the people, but it's not good for the taxpayers. And again, it's an option.”

Republican Tom Dermody is the mayor of LaPorte, which sometimes uses PLAs.

“We are looking at a PLA for a future housing project because we had two unscrupulous contractors [on a previous contract] that we then had to follow up and redo all the work,” he said, testifying in support of the agreements. “So when we talk about tax savings, which I'm not sure there are or what the savings are, there is large cost to the taxpayer when we have to replace and redo the same work. We need to set a standard in the PLA.”

He also argued PLAs bring economic value by allowing the city to encourage contractors to hire locally.

“Every day the citizens of the city of LaPorte tell me what I'm doing wrong,” Dermody, who was formerly a state lawmaker, said. “Respectfully, you have enough on your plate with opioid addiction, with mental health, just to name a few. We really – at a local government – do not need your help and support to solve a situation that does not need solving.”

Even if the bill had passed the Senate committee, it likely would have been weakened dramatically in related but separate provisions that were also controversial.

Just before voting not to advance the bill, the committee narrowly voted to strip out portions of the bill that sought to soften apprenticeship and training requirements for contractors on some public projects. These provisions also faced heavy pushback from labor groups and lawmakers on both sides over worries that lessened standards would lead to lower-quality work.

Adam is our labor and employment reporter. Contact him at arayes@wvpe.org or follow him on Twitter at @arayesIPB.

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