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Let me take a minute to describe the provisions of the bill.
[Page: S6310] GPO's PDF
This bill would lengthen by thirty (30) days the time that small entity representatives have to review the usually technical and voluminous materials to be considered during panel deliberations. For those small businessmen and women who would like to participate but do not have a great deal of time to review technical data, the bill requires OSHA, EPA and IRS to prepare detailed summaries of background data and information.
The bill would also allow a small entity representative, if he or she so chooses to, make an oral presentation to the panel.
Many small entities have expressed their interest in reviewing the panel report before the rule is proposed, and this bill would require the panel report to be printed in the Federal Register either as soon as practicable or with the proposed rule, but in no case, later than six (6) months after the rule is proposed.
Moreover, the bill would add certain rules issued by Internal Revenue Service to the panel requirements of SBREFA. Many small businesses complain that they are overwhelmed with the large burdens that the IRS places on them. It is the goal of this bill to hold the IRS accountable for the interpretative rules they issue that have a major impact on small business concerns, and to open up the rulemaking process so small entities can participate.
This new authority would significantly increase the workload of SBA's Office of Advocacy, the Federal office charged with monitoring agency compliance with the Regulatory Flexibility Act, including SBREFA. Chairman BOND and I agree that it is important that the Office of Advocacy have adequate resources to fulfill the new responsibilities mandated by this bill. Therefore, we plan to send a letter jointly to Appropriations Subcommittee on Commerce, Justice and State Chairman and Ranking Member Senators GREGG and HOLLINGS requesting them to approve additional funding for the Office of Advocacy to handle these additional responsibilities under the law.
I am proud to support this legislation. I believe it will result in significant savings for small businesses and will improve the mechanism for their voices to be heard.
Finally, I would like to thank Chairman BOND and his staff for their efforts working with me and my staff to produce this important bill.
By Mr. SMITH of New Hampshire (for himself, Mr. INHOFE, Mr. THURMOND, Mr. NICKLES, Mr. HELMS, and Mr. COCHRAN):
S. 1157. A bill to repeal the Davis-Bacon Act and the Copeland Act; to the Committee on Health, Education, Labor, and Pensions.
DAVIS-BACON REPEAL ACT OF 1999
Mr. SMITH of New Hampshire. Mr. President, I rise today to introduce the Davis-Bacon Repeal Act of 1999. This legislation would repeal the Davis-Bacon Act of 1931, which guarantees high wages for workers on Federal construction projects, and the Copeland Act, which imposes weekly payroll reporting requirements.
Davis-Bacon requires contractors on Federal construction projects costing over $2,000 to pay their workers no less than the ``prevailing wage' ' for c omparable work in their local area. The U.S. Department of Labor has the final say on what the term ``prevailing wage' ' means , but the prevailing wage usual ly is based on union-negotiated wages.
My bill would allow free market forces, rather than bureaucrats at the Labor Department in Washington, DC., to determine the amount of construction wages. There is simply no need to have the Labor Department dictating wage rates for workers on Federal construction projects in every locality in the United States.
The Department of Labor's Office of the Inspector General recently issues a devastating report showing that inaccurate information had been used in Davis-Bacon wage deter minations in several states. The errors caused wages or fringe benefits to be overstated by as much as $1.00 per hour, in some cases. If Davis-Bacon were repealed, American taxpayers would save more than $3 billion over a 5-year period, according to the Congressional Budget Office.
Davis-Bacon also stifles competition in Federal bidding for construction projects, especially with respect to small businesses. Small construction companies are not knowledgeable about Federal contracting procedures; and they simply cannot afford to hire the staff needed to comply with Davis-Bacon's complex work rules and reporting requirements.
Congress passed Davis-Bacon during the Great Depression, a period in which work was scarce. In those days, construction workers were willing to take what jobs they could find, regardless of the wage rate; most construction was publicly financed; and there were no other Federal worker protections on the books.
Conditions in the construction industry have changed a lot since then, however. Today, unemployment rates are low, and public works construction makes up only about 20 percent of the construction industry's activity. Also, we now have many Federal laws on the books to protect workers. Such laws include the Fair Labor Standards Act of 1938, which imposes a general minimum wage, the Occupational Safety and Health Act of 1970, the Miller Act of 1935, the Contract Work House and Safety Standards Act of 1962, and the Social Security Act.
Yet the construction industry still has to operate under Davis-Bacon's inflexible 1930s work requirements and play by its payroll reporting rules. Under the law's craft-by-craft requirements, for example, contractors must pay Davis-Bacon wages for individuals who
perform a given craft's work. In many cases, that means a contractor either must pay a high wage to an unskilled worker for performing menial tasks, or he must pay a high wage to an experienced worker for these menial tasks. These requirements reduce productivity.
A related problem with Davis-Bacon is that it reduces entry-level jobs and training opportunities for the disadvantaged. Because the law makes it costly for contractors to hire lower-skilled workers on construction projects, the statute creates a disincentive to hire entry-level workers and provide on-the-job training.
The Congressional Budget Office raised this issue in its analysis, ``Modifying the Davis-Bacon Act: Implications for the Labor Market and the Federal Budget.'' As stated in that 1983 study:
Although the effect of Davis-Bacon on wages receives the most attention, the Act's largest potential cost impact may derive from its effect on the use of labor. For one thing, DOL wage deter minations require that, if an employee does the work of a particular craft, the wage paid should be for the craft.
For example, carpentry work must be paid for at carpenters' wages, even if performed by a general laborer, helper or member of another craft.
Moreover, the General Accounting Office has maintained that the Davis-Bacon Act is no longer needed. GAO began to openly question Davis-Bacon in the 1960s; and in 1979, it issued a report calling for the Act's repeal. Titled ``The Davis-Bacon Act Should Be Repealed,'' the report states: ``[o]ther wage legis lation and changes in economic conditions and in the construction industry since the law was passed make the law obsolete; and the law is inflationary.''
To those who remain unconvinced that Davis-Bacon is bad public policy, I urge a review of the Act's legislative history. Some early supporters of Davis-Bacon advocated its passage as a means to discriminate against minorities. For instance, Clayton Allgood, a member of the 71st Congress, argued on the House floor that Davis-Bacon would keep contractors from employing ``cheap colored labor'' on construction projects. As stated by Congressman Allgood on February 28, 1931, ``it is labor of that sort that is in competition with white labor throughout the country.'' Unfortunately, Davis-Bacon still has the effect of keeping minority-owned construction firms from competing for Federal construction contract, because many such firms are small businesses.
Early supporters of Davis-Bacon also believed that the law would prevent outside contractors from undermining local firms in the Federal bidding process. In practice, however, Davis-Bacon wages hurt local businesses and make it more likely that outside contractors will win bids for Federal projects.
[Page: S6311] GPO's PDF
Mr. President, for all of the above reasons, I believe that the Davis-Bacon Act should be repealed. I urge my colleagues to support the Davis-Bacon Repeal Act of 1999.
Mr. President, I ask unanimous consent that the text of my bill be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. DAVIS-BACON ACT.
(a) REPEAL.--The Act of March 3, 1931 (40 U.S.C. 276a et seq.) (commonly referred to as the Davis-Bacon Act) is repealed.
(b) REFERENCES.--Any reference in any law to a wage requi rement of the Act of March 3, 1931, shall after the date of the enactment of this Act be null and void.
SEC. 2. COPELAND ACT.
Section 2 of the Act of June 13, 1934 (40 U.S.C. 276c) (commonly referred to as the ``Copeland Act'') is repealed.
SEC. 3. EFFECTIVE DATE.
The amendments made by sections 1 and 2 shall take effect 30 days after the date of the enactment of this Act but shall not affect any contract in existence on such date of enactment or made pursuant to invitation for bids outstanding on such date of enactment.
Mr. NICKLES. Mr. President, I am happy to join Senator BOB SMITH as a cosponsor of the Davis-Bacon Repeal Act of 1999.
I believe Davis-Bacon repeal is long overdue. This 68-year-old legislation requires contractors to pay workers on federally-subsidized projects what the Labor Department determines is the local prevailing wage. What Davis-Bacon actually does is cost the Federal Government billions of dollars, divert funds out of vitally important projects, and limit opportunities for employment.
In my own State of Oklahoma, it has been proven that many ``prevailing wages '' have been calculated using fictitious projects, ghost workers, and companies established to pay artificially high wages. Oklahoma officials have reported that many of the wage surve y forms submitted to the U.S. Department of Labor to calculate Federal wage rates in Oklahoma were wrong or fraudulent.
Records showed that an underground storage tank was built using 20 plumbers and pipefitters paid $21.05 an hour but no such tank was ever built. In another case, several asphalt machine operators were reported to have been employed at $15 an hour to build a parking lot but the lot was made of concrete, there were no asphalt operators, and the actual Davis-Bacon wage shoul d have been $8 an hour. Ultimately, the Oklahoma Secretary of Labor established that at least two of the inflated Oklahoma reports were filled out by union officials.
The Davis-Bacon Act also diverts urgently needed Federal funds. After the 1995 bombing of the Murrah Federal building in Oklahoma City, Mayor Ron Norick of Oklahoma City estimated that the city could have saved $15 million in construction costs had the President waived the Davis-Bacon Act.
This money could have been used to provided additional assistance to those impacted by the bombing and to further rebuild the area around the Murrah site. The Federal role in disaster situations should be to empower communities and foster flexibility so that rebuilding efforts can proceed in the best manner possible.
The Congress should repeal a law that discourages, rather than encourages, the employment of lower skilled or non-skilled workers.
Davis-Bacon began as a way to keep small and minority businesses out of the government pie, and today it still does, reaching even further. Repeal of the act will take wage setti ng out of the hands of bureaucrats and return the determination of labor costs on construction projects to the efficiencies of the competitive marketplace. This would result in a more sound fiscal policy through payment of actual market-based local wage rates ; more entry-level jobs in construction industry for youth, minorities, and women; and more small businesses bidding on Federal contracts.
The Davis-Bacon Repeal Act will provide increased job opportunities for those who might not ordinarily have the chance to enter the workforce, the opportunity to learn a trade, and the opportunity to climb the economic ladder.
I applaud Senator SMITH for his efforts and appreciate the chance to cosponsor this bill.
By Mr. HUTCHINSON:
S. 1158. A bill to allow the recovery of attorney's fees and costs by certain employers and labor organizations who are prevailing parti es in proceedings brought against them by the National Labor Relations Board or by the Occupational Safety and Health Administration; to the Committee on Health, Education, Labor, and Pensions.
FAIR ACCESS TO INDEMNITY AND REIMBURSEMENT ACT
Mr. HUTCHINSON. Mr. President, it is my honor today to introduce the ``Fair Access to Indemnity and Reimbursement Act'' (the ``FAIR Act''), which will amend the National Labor Relations Act and the Occupational Safety and Health Act to provide that a small employer prevailing again st either agency will be automatically entitled to recover the attorney's fees and expenses it incurred to defend itself.
The FAIR Act is necessary because the National Labor Relations Board (``NLRB'') and Occupational Safety and Health Agency (``OSHA'') are two aggressive, well-funded agencies which share a ``find and fine'' philosophy. The destructive consequences that small businesses suffer as a result of these agencies' ``find and fine'' approach are magnified by the abuse of ``salting'' or the placement of paid union organizers and their agents in non-union workplaces for the sole purpose of disrupting the workforce. ``Salting abuse'' occurs when ``salts'' create labor law violations or workplace hazards and then file frivolous claims with the NLRB or OSHA. Businesses are then often forced to spend thousands and sometimes hundreds of thousands of dollars to defend themselves against NLRB or OSHA as these agencies vigorously prosecute these frivolous claims. Accordingly, many businesses, when faced with the cost of a successful defense, make a bottom-line decision to settle these frivolous claims rather than going out of business or laying off employees in order to finance costly litigation.
The ``FAIR Act'' will allow these employers to defend themselves rather than settling, and, more importantly, it will force the NLRB or OSHA to ensure that the claims they pursue are worthy of their efforts. The FAIR Act will accomplish this by allowing employers with up to 100 employees and a net worth of up to $7,000,000 to recover their attorneys fees and litigation expense directly from the NLRB or OSHA, regardless of whether those agencies' decision to pursue the case was ``substantially justified'' or ``special circumstances'' make an award of attorneys fees unjust. Thus, the Congressional intent behind the broadly supported, bi-partisan ``Equal Access to Justice Act'' (``EAJA'') to ``level the playing field'' for small businesses will finally be realized.
The ``FAIR Act'' is solid legislation; it is a common sense attempt to give small businesses the means to defend themselves against unfair actions. Accordingly, I ask my colleagues for their cooperation and assistance as I work to ensure that the ``FAIR Act'' is enacted into law.
By Mr. STEVENS (for himself, Mr. COCHRAN, Mr. INOUYE, Mr. HAGEL, Mr. BINGAMAN, Mr. SHELBY, Mr. LEVIN, Mr. DODD, and Mr. THURMOND):
S. 1159. A bill to provide grants and contracts to local educational agencies to initiate, expand, and improve physical education programs for all kindergarten through 12th grade students; to the Committee on Health, Education, Labor, and Pensions.
PHYSICAL EDUCATION FOR PROGRESS ACT
Mr. STEVENS. Mr. President, today I send to the desk and introduce the Physical Education for Progress--or ``PEP''--Act. My bill would provide incentive grants for local school districts to develop minimum weekly requirements for physical education, and daily physical education if possible.
Every student in our Nation's schools, from kindergarten through grade 12, should have the opportunity to participate in quality physical education. Children need to know that physical activity can help them feel good, be successful in school and work, and stay healthy.
[Page: S6312] GPO's PDF
Engaging in sports activities provides lessons about teamwork and dealing with defeat. In my judgment, physical activity and sports are an important educational tool, and the lessons of sports may help resolve some of the problems that lead to violence in schools.
Regular physical activity produces short-term health benefits and reduces long-term risks for chronic disease, disability and premature death. Despite the proven benefits of being physically active, more than 60 percent of American adults do not engage in levels of physical activity necessary to provide health benefits.
More than a third of young people in our country aged 12 to 21 years do not regularly engage in vigorous physical activity, and the percentage of overweight young Americans has more than doubled in the past 30 years. Daily participation in high school physical education classes dropped from 42 percent in 1991 to 27 percent in 1997. Right now, only one state in our union--Illinois--currently requires daily physical education for grades K through 12. I think that is a staggering statistic. Only one State requires daily physical education for our children.
The impact of our poor health habits is staggering: obesity-related diseases now cost the Nation more than $100 billion per year, and inactivity and poor diet cause more than 300,000 deaths per year in the United States.
We know from the Centers for Disease Control and others that lifelong health-related habits, including physical activity and eating patterns, are often established in childhood. Because ingrained behaviors are difficult to change as people grow older, we need to reach out to young people early, before health-damaging behaviors are adopted.
To me, schools provide an ideal opportunity to make an enormous, positive impact on the health of our Nation. The PEP Act, to me, is an important step toward improving the health of our Nation. The PEP Act would help schools get regular physical activity back into their programs. We can, and should, help our youth establish solid health habits at an early age.
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