SB 0245 - Fiscal Note

Fiscal Note - SB 0245 - The Transportation Department may enter into project labor agreements

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 0058-02

BILL NO.: SB 245

SUBJECT: Department of Transportation: Contracts

TYPE: Original

DATE: January 25, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None	$0	$0	$0
Total Estimated Net Effect on All State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Transportation (MoDOT) assume the proposal would require the department to have a project labor agreement in place for most of their projects. They also assume that a separate contract would be necessary for each project, thus slowing the pace of plan development and award of contracts on projects. Officials indicate that he Federal Highway Administration would not approve participation in project labor agreements and could withhold project authorization on an interstate project because of the violation of the preference prohibition. On a state or federal project, the letting could be challenged as unlawful with the attendant cost of litigation and delay of letting. In addition, officials indicate that on state-only funded projects (where the federal preference prohibition isn't applicable), the effect of imposing union wage rates and work rules could produce a higher project labor cost than the cost of mandatory prevailing state wage rates would produce. Therefore, MoDOT officials indicate the fiscal impact on the department is impossible to predict.

Oversight assumes that the legislation does not require MoDOT to use project labor agreements and specifically includes fiscal considerations among the factors to be considered in determining whether such agreements are to be used. Therefore, Oversight assumes the proposal would have no direct fiscal impact on the department.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

The proposal would authorize the director of the Department of Transportation to establish and implement project labor agreements for individual public construction projects.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Transportation

Jeanne Jarrett, CPA

Director