LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 11, 2001 TO: Honorable Florence Shapiro, Chair, Senate Committee on State Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB464 by Shapleigh (Relating to determining the prevailing per diem wage rate to be paid in connection with constructing a public work for the state.), Committee Report 1st House, Substituted ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** Local Government Impact The bill would require that in a locality where a contract for a public work is awarded by a political subdivision or the state, the public body would determine the prevailing wage rates for each craft or type of worker needed to execute the contract. Provisions of the bill would require that to determine the prevailing wage rate, a survey would be conducted of wages received by classes of workers employed on similar projects both within the same political subdivision and statewide, as well as reviewing the prevailing wage rate as determined by the United States Department of Labor in accordance with the Davis-Bacon Act and its subsequent amendments. The prevailing wage rate used would be the higher of the rates of the political subdivision survey, the statewide survey, or from the Department of Labor. The provisions of the bill would also amend the definition of "locality in which the work is performed" to restrict that in a municipality with a population of 500,000 or more may only include the geographic limits of the municipality. Based on responses from a sampling of counties and cities, it is anticipated that the requirements of the proposed statute would require an additional one-half to one full-time-equivalent position per political subdivision. In large cities and counties, the additional salary, benefits, and capital expenditures required for the position would be no significant fiscal impact; however, in small cities and counties, the additional position could have a significant impact. Examples of projected costs to counties ranged from $17,800 for a half-time staff position in a small county to $20,000 for a full-time position in a large county. Cities indicated that increased staff time for conducting the surveys would add 15 to 20 percent to the cost of public works projects. Source Agencies: 480 Department of Economic Development, 303 General Services Commission, 601 Texas Department of Transportation, 320 Texas Workforce Commission, 304 Comptroller of Public Accounts LBB Staff: JK, DB, RB, GS