Bill That Limits Local Governments Can Partner With Contractors On The Verge Of Passing

House Bill 1024 (Public works projects) is garnering mixed reactions in the Indiana Senate as its proponents attempt to move through the Senate Pensions and Labor Committee. If passed, the bill would prohibit local units of government from utilizing project labor agreement (PLA) on taxpayer funded projects. Units of government, as well as private companies, utilize PLAs to establish labor rules for construction projects. These agreements typically set pay rates for employees on the site and determine other labor aspects of the construction project. These labor agreements are established to ensure that local labor is being considered and utilized, ultimately reverting taxpayer dollars back into local economies and communities as a result.

La Porte Mayor Tom Dermody, a former Republican state lawmaker, testified in opposition to the bill, highlighting the benefits PLAs can bring to local governments.

“Project labor agreements are one of the many creative tools that local governments can use to effectively build important capital projects,” said Mayor Dermody. “As the entity entrusted to responsibly use taxpayer dollars, we must use every tool at our disposal to ensure these expensive projects are completed on-time and by the most responsible contractor. Project labor agreements help to ensure we are spending these public funds in the most responsible manner possible.”

Under current law, local governments have the option to utilize PLAs for public works projects; however, they are not required to do so. Often times, they are used only in highly specific instances where the agreement would benefit the community by helping to ensure uniquely critical jobs, which if completed wrong could have significant public safety impacts, are completed by the highest-skilled laborers. This, according to local governments who utilize PLAs, promotes the efficient use of taxpayer dollars and ensures public works projects are structurally sound and safe.

Jacob German, an attorney from Barnes & Thornburg who represents the City of Evansville, also testified in opposition of the bill. “PLAs have been a great tool for projects in Evansville,” said German. “Should HB 1024 pass, it would remove a vital part of the city’s economic development plan.”

HB 1024 would eliminate local units’ ability to use project labor agreements, ultimately removing a tool that many local executives consider vital in their public works efforts. Several mayors questioned why state legislators feel it necessary to eliminate something that is only an option, not a requirement.

“We, as a local government, do not need your help to solve a situation that does not need solving,” said Mayor Dermody during his testimony.

Last week, HB 1024 was stymied in a 5-5 vote in the Senate Pensions and Labor Committee. It is scheduled for another vote this Wednesday, April 12th. If passed, it will move on to the Senate Floor for further consideration. Several local governments across the state continue to advocate against the bill.